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YUNIWATI TERYANAYUNIWATI TERYANAUpdate : 1Update : 1--2 June 20072 June 2007

CORPORATE RESPONSE & HUMAN NEEDS EAST JAVA MUDFLOW DISASTER

•• Lapindo is an Oil and Gas company which majority owned by Lapindo is an Oil and Gas company which majority owned by Indonesian Nationals. Lapindo was established in 1996 with theIndonesian Nationals. Lapindo was established in 1996 with thepurchase of purchase of HUFFCOHUFFCO’’ss working interest and became the Operator working interest and became the Operator of the Brantas Block.of the Brantas Block.

•• Operated in Brantas Block, East Java. The main production is Operated in Brantas Block, East Java. The main production is gas. Natural gas production and exploration efforts will providegas. Natural gas production and exploration efforts will provideclean energy and cheap for the communities and the industries.clean energy and cheap for the communities and the industries.

LAPINDO BRANTAS, INC (LBI)

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•• The implementation of oil and gas exploration activities as natuThe implementation of oil and gas exploration activities as natural ral resources is supervised by the Government of Indonesia under resources is supervised by the Government of Indonesia under Production Sharing Contract (PSC)Production Sharing Contract (PSC)

•• Lapindo undertake exploration and exploitation activities join wLapindo undertake exploration and exploitation activities join with ith other working interest holders of the Brantas PSC, PT other working interest holders of the Brantas PSC, PT Medco Medco E&P Brantas E&P Brantas and and Santos (Brantas) Pty.Ltd Santos (Brantas) Pty.Ltd as regulated under as regulated under Joint Operation Agreement (JOA)Joint Operation Agreement (JOA)

LAPINDO BRANTAS, INC (LBI)

• In implementing its activities, Lapindo concern and place the Safety, Health and Environmental programs in a top priority

• Achieved “Blue” rank of managing environment at operations areas by the Ministry of Environment since 2005

• Producing gas starting 1999 of 4 MMSCFD from WunutField

• From the existing 21 production wells which located in East Java, produce gas in average of 25 MMSCFD. The gas supplies industries and communities in East Java.

Production History & Environmental Management

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Bjp-1

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Survey point Banjar Panji 1 Well

Toll Road

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.• FIRST ERUPTION, 29 May 2006, 150 M SW from the BJP well• SECOND ERUPTION, 1 JUNE 2006, 150 M NW from BJP-1 Well (Following with eruptions in

several locations)• THIRD ERUPTION, 2 JUNE 2006, 500 M NE FROM THE BJP-1 Well

Mud Extrusion

-THE ACTIVE ONE AND THE BIGGEST ERUPTION GUSHING OUT FROM THE FIRST ERUPTION

Yogya Earthquake : 27 May 2006

Where was the Sidoarjo mud eruption coming from and what causes the mud eruption ?Up to the present the causes are being studied and researched by the experts/scientists

Where was the Sidoarjo mud eruption coming from and what causes the mud eruption ?Up to the present the causes are being studied and researched by the experts/scientists

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Studies and EvaluationsSidoarjo Mudflow Disaster

Local • IAGI Team (Indonesian Geologists Association)

(Pertamina, UNPAD, ITS, LEMIGAS, TRISAKTI)• ITB Team (Bandung Institute of Technology)

International• Osaka City University by Kumai Group• Kyoto University• Moscow State University• Oslo University• Others

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ACTIVE MUD VOLCANO (PURWODADI)

SAMPLES OF MUD VULCANO AT SEVERAL AREAS IN EAST JAVASAMPLES OF MUD VULCANO AT SEVERAL AREAS IN EAST JAVA

MUD VOLCANO AT KARANGANYAR, EAST JAVA

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•• Handle evacuations spontaneously and Handle evacuations spontaneously and responsively to safe and protect people responsively to safe and protect people (employees and villagers)(employees and villagers)

•• Safe and protect infrastructures and living Safe and protect infrastructures and living areas starting the day one of the incidentareas starting the day one of the incident

•• Provide basic necessities such as food, Provide basic necessities such as food, medical, amenities for refugees and medical, amenities for refugees and displaced peopledisplaced people

Emergency Actions

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•• Lapindo and SATLAK coordinate the evacuation of Lapindo and SATLAK coordinate the evacuation of the displaced villagers to the safer placesthe displaced villagers to the safer places

•• Injured people are taken care by Health & Medical Injured people are taken care by Health & Medical units and units and LapindoLapindo’’ss Medical AdvisorsMedical Advisors

•• SATLAK and Lapindo coordinates facilities at shelter SATLAK and Lapindo coordinates facilities at shelter places at places at PasarPasar BaruBaru PorongPorong and several tentsand several tents

•• Foods for refugees supplied by Public Kitchen Foods for refugees supplied by Public Kitchen facilitated by catering and KODAM V/Armyfacilitated by catering and KODAM V/Army

•• Communications to the displaced villagers are Communications to the displaced villagers are handled by SATLAK and Lapindohandled by SATLAK and Lapindo

COSTS FINANCED BY LAPINDOCOSTS FINANCED BY LAPINDO

Managing Evacuees

•• Phase I (before gas pipeline ruptured): 3.080 Phase I (before gas pipeline ruptured): 3.080 families or 11.456 personsfamilies or 11.456 persons

•• Phase II (after the rupture of gas pipeline): Phase II (after the rupture of gas pipeline): 6.815 families or 25.692 persons 6.815 families or 25.692 persons

•• Total refugees at current Total refugees at current PasarPasar BaruBaru PorongPorong: : 906 906 FamFam or 3.184 personsor 3.184 persons

EvacuationEvacuation

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•• 29 May 2006, no specific established team, Lapindo together wit29 May 2006, no specific established team, Lapindo together with h Government hand to hand handle evacuation, refugees and the Government hand to hand handle evacuation, refugees and the constructions of mud ponds & levees constructions of mud ponds & levees

•• 15 June 2006 established SATLAK (Integrated Team of 15 June 2006 established SATLAK (Integrated Team of SidoarjoSidoarjo Local Local Government) led by Regent of Government) led by Regent of SidoarjoSidoarjo. Lapindo part of its member . Lapindo part of its member

•• 27 June 2006 established SATKORLAK /Integrated Team of East Java27 June 2006 established SATKORLAK /Integrated Team of East JavaProvince led by Governor of East Java. Lapindo part of its membProvince led by Governor of East Java. Lapindo part of its memberer

•• 8 Sept 2006, Presidential Decree 13 concerning the establishment8 Sept 2006, Presidential Decree 13 concerning the establishment of of National Mudflow Mitigation Task Force in National Mudflow Mitigation Task Force in SidoardjoSidoardjo. The Task Force . The Task Force scope of works cover:scope of works cover:a. Well Control a. Well Control –– Subsurface works Subsurface works b. Mud Management b. Mud Management -- Surface works Surface works c. Social & social supportc. Social & social support

All costs financed by Lapindo Brantas IncAll costs financed by Lapindo Brantas Inc

Integrated Mitigation Team 1

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•• 8 April 2007, Presidential Decree14/2007 concerning the 8 April 2007, Presidential Decree14/2007 concerning the establishment of establishment of SidoarjoSidoarjo Mudflow Mitigation Agency Mudflow Mitigation Agency (BPLS) (BPLS)

The scope of works cover: The scope of works cover: a. Well Control a. Well Control –– Subsurface works Subsurface works b. Mud Management b. Mud Management -- Surface works Surface works c. Social & social supportc. Social & social support

Costs financed by Lapindo and the Indonesian Costs financed by Lapindo and the Indonesian Government/State BudgetGovernment/State Budget

Con’t 2

Lapindo’s Expenditures to finance Mudflowin Sidoarjo

Lapindo’s Expenditures to finance Mudflowin Sidoarjo

154,072,457.154,072,457.--140,000,000.140,000,000.--TOTAL:TOTAL:

59,073,672.59,073,672.--47,325,000.47,325,000.--Mud Management Mud Management 33

68,942,101.68,942,101.--80,524,000.80,524,000.--Well Control Well Control 22

26,056,684.26,056,684.--12,152,000.12,152,000.--Social Issues Social Issues 11

EXPENDITURES EXPENDITURES Up to March Up to March

20072007BUDGETBUDGET( USD )( USD )DESCRIPTIONDESCRIPTIONNoNo

The above costs exclude liability to purchase lands/buildings/rice fields based on latest affected area of 22 March 2007

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Reasons & Considerations…….Reasons & Considerations…….

•• Corporate concern in humanity aspects Corporate concern in humanity aspects and social solidarity, although Lapindo and social solidarity, although Lapindo is not guiltyis not guilty

•• Commitments to comply with Commitments to comply with Presidential Decrees 13/2006 and Presidential Decrees 13/2006 and 14/200714/2007

Social Activities

•Worker compensation

• Social Support

• School Transportation

• Medical

• Mass Circumcision

• Public Kitchen

•House Lease

• Factories Claims

• Other Social Support

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Compensation Payment Plan Process 1

ACCEPTABLE

Rep. from VillagersChief Village

Local AuthoritiesLapindo

* Questions & Answers* Rejected/Accepted

* Nego Process

UNACCEPTABLE

Rejected Completed

* Base Map Study*Questions & Answers * By Chief Village * ITS Data

*Rejected/Accepted * By Dept of Social * Internal Mapping

* Agreements* Crosschecking

* Nego Process * By Villagers * Surveying* Legal Opinion

PLANNEDPROGRAMS

-Compensation -Land Acquisition

Villagers' RepChief Village

Local GovernmentLapindo

Communicate and

Socialization Process

Data Compilation

VERIVIED BY LAPINDO

ACCEPTABLE

UNACCEPTABLE

PAYMENT

On Going ProgramsOn Going Programs

1.1. Two Years House Contract (95% completed)Two Years House Contract (95% completed)2.2. Two years Land/Rice fields lease (80% Two years Land/Rice fields lease (80%

completed)completed)3.3. Purchasing assets (verifications & payment Purchasing assets (verifications & payment

processes)processes)4.4. Permanent Relocation (planning stages)Permanent Relocation (planning stages)5.5. 33RDRD Party claims settlement (Factories, Party claims settlement (Factories,

Business Owners, Small scale Enterprises Business Owners, Small scale Enterprises (verifications & payments)(verifications & payments)

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Socializations & CommunicationsSocializations & Communications•• Conduct socialization for Conduct socialization for

programs/events/plans by Local programs/events/plans by Local Government and LapindoGovernment and Lapindo

•• Conduct regular meetings/discussions Conduct regular meetings/discussions with Chief Villages, Local Authorities, Key with Chief Villages, Local Authorities, Key Persons and Community LeadersPersons and Community Leaders

•• Distributed Daily Updated NewsDistributed Daily Updated News•• Issued Press Releases/FactIssued Press Releases/Fact--sheet for sheet for

reporters/journalist and media centersreporters/journalist and media centers

Socializations & CommunicationsSocializations & Communications

•• Distributed flyers/pamphlets/postersDistributed flyers/pamphlets/posters•• Information Boards at several locationsInformation Boards at several locations•• POSKO (Communication Center) available POSKO (Communication Center) available

at several locationsat several locations

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Socialization Programs to the Affected VillagersSocialization Programs to the Affected Villagers

CON’T CON’T

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CON’T CON’T

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Reasons to ClaimReasons to Claim

•• Lost opportunity/Lost IncomeLost opportunity/Lost Income•• Damaged Assets/MaterialsDamaged Assets/Materials•• Immaterial LossesImmaterial Losses•• Stop Operations / ProductionStop Operations / Production•• Temporary/Permanent RelocationTemporary/Permanent Relocation•• Cash and CarryCash and Carry

•• Transportation assistances for school kid Transportation assistances for school kid

•• Provide monthly wage compensation to unemployed labors amountingProvide monthly wage compensation to unemployed labors amountingto to RpRp. 700,000 per month per person. 700,000 per month per personThe factories ceased its operations The factories ceased its operations

•• Provide compensation to the farmers which their rice fields usedProvide compensation to the farmers which their rice fields used for for mud ponds and water treatmentmud ponds and water treatment

•• Provide compensation of the damage plantations and rice fields Provide compensation of the damage plantations and rice fields submerged by mudsubmerged by mud

•• Provide 2Provide 2--year house lease assistance of year house lease assistance of RpRp. 5,000,000 per family; . 5,000,000 per family; monthly living assistance of monthly living assistance of RpRp 300,000 per month per person for 9 300,000 per month per person for 9 months and moving cost of months and moving cost of RpRp 500,000 per family.500,000 per family.

Compensations & Assistances provided to the Affected Villagers

Compensations & Assistances provided to the Affected Villagers 1

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•• Purchase and/or relocate the damaged houses/lands/rice fields Purchase and/or relocate the damaged houses/lands/rice fields inundated by mud based on affected area mapinundated by mud based on affected area map

•• Paid compensation to villagers due to uncomfortable/bad smell, Paid compensation to villagers due to uncomfortable/bad smell, dust, noise, etc of dust, noise, etc of RpRp. 300,000.. 300,000.--/person /person

•• Provide amenities and facilities at shelter locationsProvide amenities and facilities at shelter locations

•• Provide foods (3 times/day) at cost Provide foods (3 times/day) at cost RpRp. 15,000 . 15,000 –– RpRp 20,00020,000

•• Provide Temporary/Permanent Relocations for Provide Temporary/Permanent Relocations for factories/companies/small businesses to be able to continue factories/companies/small businesses to be able to continue their activities their activities

•• Provide medical services & facilities and setProvide medical services & facilities and set--up medical centers up medical centers for displaced villagersfor displaced villagers

2CON’TCON’T

•• JumlahJumlah kiosk/kiosk/ruanganruangan sebanyaksebanyak 348 unit348 unit•• PusatPusat medismedis sebanyaksebanyak 7 unit7 unit•• KeamananKeamanan sebanyaksebanyak 2 unit2 unit•• DapurDapur Umum Umum dengandengan makanmakan 3X 3X seharisehari sebanyaksebanyak 2 unit2 unit•• Ambulance Ambulance sebanyaksebanyak 6 unit6 unit•• TankiTanki Air Air sebanyaksebanyak 24 Unit24 Unit•• TankiTanki Air Air didi DesaDesa DesaDesa sebanyaksebanyak 120 Unit120 Unit•• Truck Air Truck Air sebanyaksebanyak 4 unit4 unit•• Toilet Toilet sebanyaksebanyak 136 unit136 unit•• Mobile Toilet Mobile Toilet sebanyaksebanyak 2 unit2 unit•• JumlahJumlah PoskoPosko sebanyaksebanyak 15 unit15 unit•• SekretariatSekretariat sebanyaksebanyak 1 unit1 unit•• TV TV sebanyaksebanyak 23 unit23 unit•• Dan lain lain Dan lain lain saranasarana sepertiseperti bukubuku pelajatanpelajatan, , kasurkasur, , selimutselimut, , sikatsikat

gigigigi, , deterjendeterjen, , obatobat--obtanobtan dlldll..

Expenditures to provide amenities & Public Kitchen = Expenditures to provide amenities & Public Kitchen = RpRp. 40 billion. 40 billion

Amenities at Pasar Baru Porong Shelter Location Amenities at Pasar Baru Porong Shelter Location

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Public Kitchen By Lapindo & ArmiesPublic Kitchen By Lapindo & Armies

Medical FacilitiesMedical Facilities

NO Hospitals Total Out-patient Total In-patient In-patient Status

1 RSUD Sidoarjo 525 284 - 2 Puskesmas porong 45,833 546 2 3 Ambulan 118 5,440 4 RS Bhayangkara 1,787 357 -

5 Pos Kesehatan PKS (Ditarik) 1,783 - -

6 Pos Kesehatan PAN (Ditarik) 344 -

7 Pos Kesehatan Marinir (Ditarik)

488 - -

8 RS Siti Hajar 14 - 9 RS Delta Surya 9 - 10 RSUD Dr. Sutomo 13 1

11 Kesdam (Kesehatan Daerah Militer) 116 - -

TOTAL 56,316 1,223 3

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General Facilities:General Facilities:•• Schools: 33 unitsSchools: 33 units•• Islamic Centres: 15 Islamic Centres: 15

unitsunits•• Mosques: 65 unitsMosques: 65 units

•• Factories: 30 unitsFactories: 30 units•• Villages Offices: 4 unitsVillages Offices: 4 units

Affected BuildingsAffected Buildings 1

•• Sugar Cane : 64,015 HaSugar Cane : 64,015 Ha•• Rice fields: 309,7 HaRice fields: 309,7 Ha•• Various Plantations:4 HaVarious Plantations:4 Ha•• Total: 377,715 HaTotal: 377,715 Ha

Plantations/Rice fields DamagesPlantations/Rice fields Damages 2

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•• 22--year House Lease:year House Lease:((RpRp 5.000.000/Fam):5.000.000/Fam):

•• Monthly Living Assistance for 9 Monthly Living Assistance for 9 months:months:((RpRp 300.000/person/month)300.000/person/month)

•• Moving Cost:Moving Cost:((RpRp. 500.000/Fam.). 500.000/Fam.)

TOTAL: Rp.39.988.472.667TOTAL: Rp.39.988.472.667for 3.080 Fam/11.456 personsfor 3.080 Fam/11.456 persons

House Lease Compensation – Phase I(Before gas pipeline ruptured)House Lease Compensation – Phase I(Before gas pipeline ruptured)

Living Assistance of Rp 300,000 Is given monthly

which is transferred through the selected Banks

Provided Saving Books and ATM

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•• 22--year house lease:year house lease:((RpRp 5.000.000/Families):5.000.000/Families):

•• Monthly Living Assistance:Monthly Living Assistance:RpRp. 300.000/persons. 300.000/persons

•• Moving Cost Assistance:Moving Cost Assistance:((RpRp. 500.000/Families). 500.000/Families)

Total Total RpRp. 55.508.591.000. 55.508.591.000For 6.816 Fam/25.695 persons For 6.816 Fam/25.695 persons

House Lease Compensation – Phase II(After Gas Pipeline Ruptured)House Lease Compensation – Phase II(After Gas Pipeline Ruptured)

Temporary Relocation & Compensation to the Impacted Factories/Business OwnersTemporary Relocation & Compensation to the Impacted Factories/Business Owners

•• Temporarily Relocations for 10 factories:Temporarily Relocations for 10 factories:RpRp. 5,269,240,302. 5,269,240,302

•• Permanent Relocations for 9 factories:Permanent Relocations for 9 factories:RpRp. 1,180,000,000. 1,180,000,000

•• Evacuations Evacuations Support:RpSupport:Rp. 320,000,000. 320,000,000•• Compensation to 306 Small Businesses: Compensation to 306 Small Businesses: RpRp 4,3 billion 4,3 billion •• 9 Companies signed the MOU (claims settlement):9 Companies signed the MOU (claims settlement):

RpRp. 47 billion. 47 billion

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Compensation to unemployed workersCompensation to unemployed workers

•• Refer to standard Regional Minimum Wage of Refer to standard Regional Minimum Wage of RpRp. 700,000/month/person:. 700,000/month/person:

•• Paid to almost 2288 workersPaid to almost 2288 workers•• Total payment: Total payment: RpRp 6,188,800,0006,188,800,000

Land Lease and Crop FailuresLand Lease and Crop Failures

•• Crop Failures and Land Leases (293 HA)Crop Failures and Land Leases (293 HA)

•• Crop Failures: Crop Failures: RpRp. 1,502,806,315. 1,502,806,315

•• Land Lease used for Mud Ponds : Rp. 9,554,615,760 Land Lease used for Mud Ponds : Rp. 9,554,615,760

•• Verifications for purchasing affected rice fields (377.71 HA) arVerifications for purchasing affected rice fields (377.71 HA) areebeing processedbeing processed

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Affected area based on 4 Dec. 2007 Affected Area Map(before gas pipeline rupture)

Latest affected areas based on 22 March 2007 Map. Additional affected areas happened after the rupture of Pertamina Gas Pipeline. Government

declares the incident as a purely disaster

Note: Total affected areas is about 613,4 Ha

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Estimated Impacted Areas Inundated by mud if no actions to mitigateEstimated Impacted Areas Inundated by mud if no actions to mitigate

Luas Area Terdampak = 938 Ha

Radius = 1728 m

Affected Areas which assets of the displaced villagers need to be purchased/relocated, based on 22 March 2007 MapAffected Areas which assets of the displaced villagers need to be purchased/relocated, based on 22 March 2007 Map

•• Stipulated by the PERPRES NO.14 Year Stipulated by the PERPRES NO.14 Year 20072007::

•• Options:Options:PURCHASEPURCHASE

•• Rice field :Rice field :RpRp. 120.000,00/m2. 120.000,00/m2•• Land : Land : RpRp 1.000.000,00/m21.000.000,00/m2•• Building: Building: RpRp. 1.500.000,00/m2. 1.500.000,00/m2

RELOCATIONRELOCATIONPrepared at Prepared at KawasanKawasan SidoardjoSidoardjo BaruBaru(KSB)(KSB)

•• Present Status:Present Status:•• Process verifications and 20% advance Process verifications and 20% advance

payment payment •• About 12 villages affected or around About 12 villages affected or around

9500 houses9500 houses

•• Estimated Cost : Estimated Cost : RpRp 3,8 to 3,8 to RpRp 4 trillion4 trillion

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Decision was made after having a series of meeting with displaced villagers which facilitated by the Sidoardjo Regent and National Team.

National Team requested Lapindo to compensate displaced villagers by purchasing their assets at value of :

Land : Rp. 1 million/m2

Building/House:Rp. 1.5 million/m2

Rice field: Rp. 120 thousandm2

The indicated value is far above the MARKET PRICE

Finally, Lapindo agreed to accept the request of National Team through Lapindo’s letter of 4 Dec.

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Realization of Purchased Lands/Houses/Rice fieldsBy PT Minarak Lapindo Jaya

No: Desa Jenis Tanah Jumlah Pemilik

Jumlah Bidang

LUAS TANAH (M2)

LUAS BANGUNAN (M2)

NILAI TOTAL JUAL BELI 100% (Rp) UM 20 %

1 Mindi Sawah 31 106 184206 - 22104720000 44209440002 Jatirejo Sawah 46 66 93865 - 11263800000 22527600003 Siring Sawah 3 7 5777 - 693240000 1386480004 Kedungbendo Sawah & Bangunan 18 18 940 3,557 5923500000 1184700000

Total 98 197 284,788 3,557 39,985,260,000 7,997,052,000

Medical Services & FacilitiesMedical Services & Facilities

•• Serve medical treatments for the displaced people Serve medical treatments for the displaced people •• Total cost : Total cost : RpRp. 2,151,385,227,. 2,151,385,227,--•• Total patients: Total patients:

•• OutOut--patients : patients : 56.316 persons jiwa 56.316 persons jiwa (cummulative)(cummulative)

•• InIn--patients: 1.223 personspatients: 1.223 persons

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Medical Services & FacilitiesMedical Services & Facilities

School Transportation ServicesSchool Transportation Services

•• Relocate some schools inundated by mud to the Relocate some schools inundated by mud to the saver locationssaver locations

•• Renovate damage school buildingsRenovate damage school buildings•• Provide transportation for school childrenProvide transportation for school children•• Educational Assistance = Educational Assistance = RpRp. 220,079,900.. 220,079,900.----

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Burial AssistanceBurial Assistance

•• Temporary Cemetery at Temporary Cemetery at MindiMindi VillageVillage•• Compensation: Compensation: RpRp. 1.000.000,00/person. 1.000.000,00/person

•• Unclear financial burden as if Lapindo is Unclear financial burden as if Lapindo is solely must be responsible to the incident solely must be responsible to the incident while Lapindo is not guilty while Lapindo is not guilty

•• Victims of respective group ask for various Victims of respective group ask for various compensations in different schemes which compensations in different schemes which difficult to meet a consensusdifficult to meet a consensus

•• Uneasy to deal with victims in the upset and Uneasy to deal with victims in the upset and unhappy conditions which trigger to anarchyunhappy conditions which trigger to anarchy

•• Media ReportsMedia Reports

Problems in Lapindo’s PerspectiveProblems in Lapindo’s Perspective

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•• The Authorities and the Government must The Authorities and the Government must stand in the front without thinking first whostand in the front without thinking first who’’s s right, whoright, who’’s wrong and whos wrong and who’’s responsibles responsible

•• All parties must be concern and help All parties must be concern and help cooperatively, think that the incident is a cooperatively, think that the incident is a disaster so that the interest of the disaster so that the interest of the victims/affected communities should be victims/affected communities should be number one, to ignore number one, to ignore individuals/parties/politics interestsindividuals/parties/politics interests

Suggestions Suggestions

Benefits of MudBenefits of Mud

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Benefits of MudBenefits of Mud

Thank YouThank YouThank You