Fortis bank shirks responsibility for toxic mud-flow

21st June 2007
A major investor in a gas exploration project which has set off a toxic mud-flow has washed its hands of responsibility for the damage caused to homes of thousands of Indonesian people.

Drilling by mining company Lapindo Brantas Inc in Sidoarjo, Indonesia,  triggered the unquenchable mud-flow in May 2006. Since then, 600 hecatares of land - including 11 villages - have been submerged under a 150,000 m3 daily flow of hot mud. All efforts to stop the flow have failed, and the Indonesian government has ordered Lapindo to pay $435 million in compensation. As yet, the bill remains unpaid.

Now, Friends of the Earth has turned attention towards the financial backers of the gas project, which include Credit Suisse, Barclays, Fortis Group, Merrill Lynch & Co and Natixis.

The campaign group wrote to the banks asking that they use their influence to force Lapindo to pay the compensation fee demanded by the Indonesian government. Only one responded - Fortis - which claimed that it had ''very limited influence' over Lapindo, despite funding the operation to the tune of millions of dollars.

Paul de Clerck, corporate campaigner of Friends of the Earth International, said: "Funding from international banks like Credit Suisse and Fortis enabled Lapindo to start their gas exploration. Now the banks must accept their role in the disastrous mudflow created by the drilling. Any new loan from the banks should be conditional on Lapindo paying compensation for all the damage it has caused in Sidoarjo."

This article first appeared in the Ecologist June 2007

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