Indonesian energy company Lapindo said Thursday it had reached a compensation settlement with thousands of victims of a mud volcano which erupted from one of its gas wells.
The company, part of the business empire of billionaire Welfare Minister Aburizal Bakrie, said it would pay 30 million rupiah (2,250 dollars) a month to each displaced family until all outstanding compensation is settled.
The volcano has swamped 12 villages in east Java with stinking grey sludge since it burst from a Lapindo well two years ago, killing 13 people and displacing about 36,000 people.
Lapindo said 8,000 families were eligible for the payments, which would begin this month and will reportedly range from 100-150 million rupiah per family.
The deal was clinched late Wednesday after President Susilo Bambang Yudhoyono, facing an election battle for a second term next year, reportedly lost patience with the company’s failure to compensate the displaced families.
“All the victims who choose the cash and carry scheme, including those who were not represented by the negotiating group, are eligible to receive monthly settlements,” company spokeswoman Yuniwati Teryana said.
“But the victims still need to show us the legal certificates of the property they lost in order to receive the cash.”
The company was supposed to pay the compensation in a lump-sum by December but the global financial crisis and debt troubles within the Bakrie family business empire slowed down the process, officials said.
“Because the global financial crisis has affected Lapindo, the company will settle the … compensation through monthly payments,” Public Works Minister Djoko Kirmanto told reporters late Wednesday.
Lapindo projected in November that it would disburse less than eight trillion rupiah (680 million dollars) for compensation and mud mitigation efforts. Independent estimates of the cleanup alone top four billion dollars.
It blames an earthquake for the disaster but international researchers have found that the company’s exploratory drilling triggered the massive mud geyser.
Some displaced families expressed fears the settlement would only apply to a group of less than 2,000 victims represented by the negotiating team.
“I’m not sure whether my group, which represents about 1,200 victims over four villages, will be a part of the new settlement plan,” displaced villager Suwito said. AFP