PEKANBARU, INDONESIA - The trees in front of Ahmad's house, along the Mempura River, are dead, leafless and brittle symbols of development gone awry in Indonesia's Riau Province, on the island of Sumatra. "I relied on the trees for wood for my roof and for food," Ahmad says, "but now there are only a few trees left."
Ahmad (not his real name) blames Caltex, the Asian joint venture of oil giants Texaco and Chevron, for the death of the trees. Six miles upstream, at one of its network of 78 "gathering stations," Caltex separates water from oil recovered from its Zamrud field. After initial separation of oil in tanks from water, the water is discharged into a series of lagoons, where gravity is supposed to separate any remaining oil from the water and the water temperature is reduced by surface cooling; the water then released into canals and eventually into the jungle watershed.
Dead trees are not the only ills for which Ahmad thinks Caltex is responsible. In recent years, the Mempura's fish population has also declined, posing severe hardship for people like Ahmad, who formerly worked as a fisher. Now he only works sporadically, collecting rubber from area trees. Ahmad says he wishes he could move his house, but, for him, leaving his village is practically inconceivable.
Others in Ahmad's village echo his complaints - and also pin responsibility for their problems on Caltex. Nazwar (not his real name), who says the river often smells of oil, reports that the river water is no longer safe to drink, and that those who have drunk the water have become very sick or even died. Nazwar worries about the future of the village, and wonders how it will survive with the river, its lifeblood, polluted and unsafe. "We try to make do," he says.
Caltex flatly denies any responsibility for the village's problems. "Oil content of fresh water discharged from [the Zamrud] gathering station has been consistently within guidelines," says Erwin Kasim, government and public relations general manager of Pertamina, the Indonesian state oil company for which Caltex is a contractor. "The surface water in the Zamrud area, including the Mempura River, is heavily laden - in fact black - with peat and tannin and is not a typically good habitat for fish," Kasim adds. "These heavily organic jungle streams are not a good source of drinking water."
The dispute in the Mempura village is only one of a number of emerging environmental conflicts between Riau communities and Caltex. Although the company boasts about its social and environmental policies and practices, there is increasing evidence that Caltex's operations are polluting areas throughout Riau. In June 1993, researchers from the British branch of Greenpeace tested water samples near six Caltex gathering stations and concluded in a report that Caltex's operations have been responsible for "large-scale releases of hydrocarbon contaminants into the freshwater system [that] have led to irreparable environmental damage resulting in severe long term hazards to human health and the quality of both surface and subsurface freshwater environments."
Greenpeace did not test the Mempura River for oil pollution, but Simone Troendle, the Greenpeace scientist who took the Riau water samples, says it is entirely possible that Caltex's upriver operations are responsible for the problems about which Ahmad, Nazwar and the other villagers are complaining. How oil contaminants are spread throughout the Riau rainforest ecosystem is a complicated process, she says, varying at each gathering station according to the direction of groundwater flows, how much waste Caltex is discharging and a number of other factors. At the very least, she says, the Mempura villagers' complaints "must be looked into."
The government's cut
Caltex's operations are spread widely throughout Riau. The company operates more than 100 oil and gas fields within a concession area of 32,000 square kilometers, and its pipelines and access roads criss-cross the province, cutting swaths through the Sumatran rainforest.
Caltex, which first invested in Riau in the early part of this century, is by far the largest oil producing company in oil-rich Indonesia. Each year the company pumps more than 200 million barrels of oil out of the ground.
Caltex's operations are governed by a production sharing contract with the Indonesian government. The current agreement allocates 10 percent of the profits derived from Caltex's Indonesian operations to the company, and the remaining 90 percent to the government. Accordingly, Caltex is a highly valued foreign investor, and not likely to be criticized by the government; despite Indonesia's ongoing and somewhat successful attempts to diversify its economy, oil still accounts for 31 percent of the debt-ridden country's foreign exchange earnings.
Local villages polluted
The environmental impact of Caltex's vast operations is only just beginning to be scrutinized, and even now local villagers are hesitant to challenge the company's effect on the Riau ecology.
That the environmental problems caused by Caltex have not been recognized until now is not surprising, says Greenpeace's Troendle, because of the capacity of the natural environment to absorb pollution. That capacity is limited, however, and the effects of pollution do eventually manifest. That is what is now happening, Troendle believes.
It is not surprising either that the political response to the pollution is developing slowly. In Indonesia, where nearly three decades of brutal authoritarian rule under President Suharto have taught people that protesting against government-supported projects can have extremely high costs, fear is pervasive, especially in the countryside, and remote villages do not have much recent tradition of standing up for their rights.
In the Mempura village, for example, Nazwar says residents have never complained directly to Caltex about their problems. "We don't know how to do it," he explains.
But now, aided by local environmentalists, Riau villagers may be slowly beginning to challenge the company.
The village of Sungai Limau has been the leader so far. It reportedly first complained - to both the company and the government - of the effects of alleged Caltex pollution in 1991. But its complaints were not addressed, and they did not generate any media or outside attention.
Then, in a January 1993 letter, Sungai Limau, now supported by the Riau chapter of the Indonesian environmental group WALHI, again charged Caltex with polluting the Sungai Limau and Siak rivers. The Sungai Limau villagers reported problems almost identical to those cited by the Mempura villagers. Their letter noted that oil is often visible in and around the rivers, and they complained that the rivers' fish population has declined so much that they can no longer fish in them. They also said that a number of villagers have contracted rashes, diarrhea and other sicknesses as a result of the oil pollution.
During the same period, WALHI Riau brought together a coalition of individuals, known as Solidarity Forum, to investigate the Sungai Limau people's claims. From January to April, the Solidarity Forum investigated Caltex's operations.
At the end of April 1993, WALHI Riau wrote a letter to the Indonesian environmental ministry, Bapedal, in which the organization claimed that the preliminary Solidarity Forum investigation had found Caltex's Pusaka gathering station, located near Sungai Limau village, responsible for the pollution of the Sungai Limau and Siak rivers. WALHI Riau alleged the water to be contaminated with cyanide and hydrogen sulfide, and polluted for a decade. The letter called on Bapedal to conduct a special investigation of Pusaka and other Caltex gathering stations.
The government did respond to this round of complaints. In January 1993, the Riau governor sent a fact-finding mission to investigate and in April 1993, Bapedal conducted an investigation. The government investigations did not substantiate the charges. Caltex touts the investigations as proof that it is not responsible for the problems besetting Sungai Limau and other villages. As he does in the case of the Mempura village, Caltex's Kasim says the river is peat-laden and unfit for household use. The January 1993 investigation team, says Kasim, found "the oil content and discharged temperatures [at the Pusaka gathering station] below guidelines. No oil was detected along the [Caltex]-built discharge canal" which leads to the Siak River. The team also concluded that there was no disturbance of local fish populations and that the skin irritations of which villagers complained were due to poor hygiene, not pollution.
There are reasons to doubt the government's findings, however. First, the close Caltex- government relationship raises serious questions about the government's willingness to regulate or sanction the company. Second, Ribut Susanto, president of WALHI Riau, claims that WALHI Riau members witnessed Caltex engaging in a special clean-up of waste canals just prior to the Bapedal investigation in April. Caltex categorically denies Susanto's claim, but if it is true, Susanto's contention would undermine any basis for trusting the government's findings. Finally, Greenpeace tests of water samples near six Caltex gathering stations concluded that the villagers' claims are valid, and that water supplies are seriously polluted, posing severe health and environmental dangers.
Black gold, toxic effluent
The Minas gathering station, another of the 78 Caltex gathering stations dotting the Riau countryside, lies only a few miles to the north of Pekanbaru, Riau's capital. It appears as a bizarre anachronism, its huge oil tanks standing on open tracts of land cleared from in the middle of the Sumatran rainforest. The water treatment system here is very much like those upstream from the Mempura and Sungai Limau villages. Pipes carry oil-contaminated production water, pumped from Caltex's fields along with oil, from the tanks to mucky pits, where the water is dumped. The water in the pits, or lagoons, is steaming hot, and sometimes bubbling hot, because the underground fields from which it came are close to the western Pacific volcanic zone. The banks of the lagoons are covered with oil deposits and patches of oil float on top of the lagoons. Water which has settled to the bottom of the lagoons, supposedly free of oil contaminants, is discharged into a series of canals, or streams, which eventually lead to the Siak River, the main river running through Riau.
The June Greenpeace test, however, found the water discharged from the Minas gathering station to be highly contaminated, with oil registering 190 parts per million. This level of contamination, explains the Greenpeace report, poses serious threats to human health and the environment.
Caltex challenges the validity of the Greenpeace findings for the Minas gathering station, with Kasim contending that the Greenpeace sample at Minas was "taken not from a final discharge stream but from an intermediate treatment pit discharge." But Troendle says she walked along the artificial channels running out of the Minas gathering station for several miles and saw no other water treatment mechanism.
Although the Greenpeace study found the highest level of contaminants at the Minas gathering station, it found oil pollution at each of the other five sites it tested. Contamination levels at the other sites averaged an unsafe 9.4 parts per million.
Caltex denies that these discharge levels endanger human health or the environment, with Kasim pointing out that Indonesian guidelines limit oil concentrations in water discharges to 25 ppm. Kasim says the company's "effluent processing technology achieves effluent discharge concentrations of dissolved and suspended materials that are within worldwide limits for prudent operation. We simply do not agree that [Caltex's] effluent treatment is inadequate."
Unsafe discharges were not the only environmental problem with Caltex's operations which the Greenpeace researchers identified. Because the settling lagoons are not sealed and receive effluent loads which are then poorly confined, hydrocarbons contaminate the soil below the settling lagoons and threaten groundwater quality, the Greenpeace researchers wrote. Again, Caltex denies any problem; Kasim says, "the settling lagoons or treatment pits are specifically designed to allow separation time for water and oil. The sites will be reclaimed and remediated to full legal and prudent standards when production operations are complete."
A final problem cited by Greenpeace stems from the discharge of hot water. Because the discharged water is as hot as 175 degrees Fahrenheit, according to Greenpeace, hydrocarbon contaminants in the water are likely to evaporate, creating local air pollution, much of which can return to the earth in Riau's frequent rains. Caltex denies that its discharges are hotter than 113 degrees.
Cutting a deal
That the Sungai Limau villagers and WALHI Riau were able to pressure the government into conducting an investigation of Caltex's environmental performance is itself somewhat remarkable, given the repressive nature of Indonesian government and its tight alliance with Caltex.
Both the government and Caltex appear very interested in defusing any protest activities in their infancy, and a key element of their strategy is dividing the local community and splitting it off from non- governmental organizations such as WALHI Riau. Government representatives told Singau Limau villagers that they should negotiate directly with Caltex, without the interference of third parties such as WALHI Riau.
And, according to Susanto, Caltex has succeeded in negotiating directly with leaders of the community, without the involvement of either WALHI Riau or broad segments of the village. At a June 1993 meeting with the head of Sungai Limau village, according to Susanto, Caltex agreed to help build a few wells, make an addition to a school, repair a road and provide some other assistance to Sungai Limau, as well as to investigate the side effects of the company's discharge system. These forms of compensation, says Susanto, "are very far from what the community wants."
Whether Caltex can reach a final agreement with Sungai Limau and snuff out the complaints there is likely to affect what other villages who may be affected by Caltex's expansive operations do. If the Sungai Limau dispute can be resolved quietly, without much local or international publicity, it will not have much ripple effect. But if the Sungai Limau villagers can force an admission of Caltex wrongdoing or extract substantial compensation for the damages they have suffered, or if international attention is focused on Caltex's operations, local communities and the provincial and national governments will direct a much more searching eye at the Caltex operations which dominate the Riau countryside.
The company presents itself as a paragon of social responsibility. In the September-October 1993 issue of the Harvard Business Review, Julius Tahija, former Caltex managing director and current chair of the CPI board of commissioners, proclaims, "For transnational corporations, meeting social responsibilities is an indispensable part of doing business in the developing world. ... It is perfectly true that an oil company's principal purpose is to extract oil from the ground and sell it at a profit. ... [But multinational corporations] need development. And their need is urgent, whether they acknowledge it or not." Caltex, he asserts, recognizes the need for development and has provided a model for other companies.
Whatever the company's contribution to the region may be, there is no denying that the sharp contrast of the wealth Caltex is tapping below the ground and the extreme poverty in villages above ground is stunning. Ahmad and his Mempura village, for example, have no electricity or running water, and their situation is replicated throughout Riau.
It would not be fair, however, to hold Caltex primarily responsible for the poverty in Riau. Caltex pours huge sums into the Indonesian government's coffers, but all of the money goes to the central government in Jakarta. "Every year we pass a resolution asking that some of the money go to Riau," says Dr. Chaidir, a member of the Riau Parliament, but every year the Jakarta government ignores or denies the request.
Still, Caltex's claims of social responsibility ring false in the impoverished villages whose subsistence-level economies have been tipped out of balance by what they believe to be the company's environmental degradation.
- R.W.