Legal case

On 5 June 2006, MedcoEnergi (one partner company in the Brantas PSC area) sent a letter to PT Lapindo Brantas which accused them of breaching safety procedures during the drilling process. The letter further attributes "gross negligence" to the operator company for not equipping the well bore with safety steel casing. Soon afterwards vice president Jusuf Kalla announced that PT Lapindo Brantas and the owner, the Bakrie Group, must compensate thousands of victims affected by the mud flows. A criminal investigation was then started against several senior executives of the company because the drilling operation has put the lives of local people at risk.

Aburizal Bakrie frequently said that he is not involved in the company's operation and further detached himself from the incident.^{[citation needed]} Even in his capacity as Minister of Welfare, Aburizal Bakrie was reluctant to visit the disaster site.^{[citation needed]} Aburizal Bakrie's family business group, Bakrie Group, one of the owners of PT Lapindo Brantas, had been trying to distance themselves from the Lusi incident. Afraid of being liable for the disaster, Bakrie Group announced that they would sell PT Lapindo Brantas to an offshore company for only $2, but Indonesia's Capital Markets Supervisory Agency blocked the sale.^[13] A further attempt was made to try to sell to a company registered in the Virgin Islands, the Freehold Group, for US$1 million, which was also halted by the government supervisory agency for being an invalid sale. Lapindo Brantas was asked to pay about 2.5 trillion rupiah (about US$ 276.8 million) to the victims and about 1.3 trillion rupiah as additional costs to stop the flow. Some analysts predict that the Bakrie Group will try any attempts, including the announcement of bankruptcy, to avoid the cost of clean up which could amount to US$ 1 billion.

On 15 August 2006, the East Java police seized the Banjar-Panji 1 well to secure it for the court case. The Indonesian environmental watchdog, WALHI, have meanwhile filed suit against PT Lapindo Brantas, President Susilo Bambang Yudhoyono, the Indonesian Minister of Energy, the Indonesian Minister of Environmental Affairs and local officials.

After investigations by independent experts, police have concluded the mud flow as an "underground blow out", triggered by the drilling activity. It is further noted that the steel casing lining had not been used which could prevent the disaster. Thirteen Lapindo Brantas' executives and engineers face twelve charges of violating Indonesian laws.


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