Pertamina’s Indonesian oil disaster

From ToxicLeaks

History of state-owned Pertamina company[edit | edit source]

Pertamina is Indonesia’s state-owned oil company, in operation since 1957. It owns six oil refineries with a combined production capacity of a million barrels per day, and manages 141,000 square kilometers of oil and gas fields across the country. It was a key revenue center during the New Order government of the late President Muhammad Suharto, yet almost failed because of corruption and mismanagement in 1975. A 1999 audit showed an estimated USD$6.1 billion was stolen by Suharto’s family and associates through cronyism, kickbacks and lucrative service contracts, problems that continue in the new century.

Indonesia Corruption Watch said in October 2017 that results of current President Joko Widodo’s campaign against the corruption and the “energy mafia” remain unclear for Pertamina. On April 4, 2018, Indonesian officials named former company director Karen Agustiawan a suspect in a corruption case dating to 2009 that resulted in $39.7 million in losses. Bareskrim, the Criminal Investigation Agency of the Indonesian National Police, also is investigating Pertamina leaders including asset manager Gathot Harsono for mismanagement of resources – even as environmentalists condemn the mismanagement of a Borneo state oil spill that adds to questions about the company’s impacts on the Indonesian people.

Fatal Borneo oil disaster[edit | edit source]

On March 31, 2018, an undersea pipeline off the coast of Balikpapan – a port city on Borneo Island known for its white-sand beaches and tourism – burst beneath the Makassar Strait. The Pertamina line connected an offshore rig with the Lawe Lawe terminal opposite Balikpapan Bay from the city; it ran 25 meters below the sea. The accident was caused by a ship anchor hitting the pipe, according to newly appointed Ministry of Energy and Mineral Resources Director Djoko Siswanto, whose own deputy is the vice president commissioner of Pertamina. The company has denied any negligence on its part for the pipe failure, which caused an explosion that killed five people and spewed oil across the sea and coast.

Initially, Pertamina said the massive fire that killed the fishermen with thick toxic fumes was quickly contained and that no evidence of an oil leak was found. It quickly became obvious that was not true.

Environmental and health impacts[edit | edit source]

Pertamina initially thought it was the vessel that leaked oil, and it was not until April 4 that the company said oil was leaking from the pipeline into the sea. By April 8, the leak affected 12,900 hectares of fishing waters, threatening the livelihood of Borneo residents and the fragile ecosystem that supports them. At least 7,000 hectares of protective mangrove swamp are affected, and 8,000 mangrove plants destroyed.

The mangrove forests are a critical fish spawning ground and absorb carbon dioxide, making them key in the fight against climate change. Mangroves in Balikpapan Bay are decades-old and grow to 30 meters. Local residents and environmental groups said an estimated 80 kilometers of Borneo’s coast is harmed.

Indonesia’s Ministry of Environment and Forestry said an endangered Irrawaddy dolphin washed up dead on a Balikpapan beach and was believed poisoned by the toxic leak. Victims include the protected manatee-like dugong, many fish have been killed, and birds and other wildlife are threatened by an oil slick that grew to become four kilometers long two days before Pertamina admitted it was there. The spokesman for a local coalition affiliated to JATAM, the Indonesian environmental advocacy NGO, said police refused to take his report about the oil slick when he demanded accountability from Petramina.

Apart from the fatalities – men whose families say Pertamina still had not contacted a week later – at least 1,000 people complained of respiratory illness, nausea and skin irritation from the toxic exposure.

"Fishermen cannot go to sea and many children and women especially those who cannot stand the smell of oil experience shortness of breath, nausea, and vomiting," said Tri Bangun Laksana, a tourism representative for the region. Some found symptoms were made worse by trying to help with cleanup.

Responsibility for the cleanup[edit | edit source]

Pertamina’s admission that its pipeline was the source of the leak came with equally late interventions. About 1,000 people were deployed along with 21 ships, a skimmer and vacuum trucks to suck up oil, booms to contain some slick spread, absorbents and other tools. The company distributed 5,000 masks to Balikpapan residents and set up mobile health clinics from the local Pertamina Hospital that it funds. Ironically, it originally served only Pertamina employees and families before broadening its investments.

By April 8, the company said 90 percent of the spill had been cleaned up and life was getting back to normal. The response was not enough to satisfy Greenpeace, local advocates and Balikpapan citizens, who demanded that Pertamina take full responsibility for the damage to ecosystems, health and the livelihood of fishing-dependent communities. The local coalition, KMPTM, said it planned a class action lawsuit on behalf of people living and working in the affected areas. Balikpapan elected officials said that Pertamina was negligent for failing to have a leak monitoring system, which the company has denied.

Meanwhile, Indonesia’s Coordinating Minister for Maritime Affairs, Luhut Binsar Pandjaitan, asked people not to jump to conclusions about Pertamina’s responsibility and to await technical reports. He denied the oil spill event was mismanaged, but promised legal action “if necessary” once Indonesia determines if its own national oil company, one riddled with corruption accusations, is to be blamed.