REPORTER: Ginny Stein
Javanese mystics have cast spells. More conventional machinery and muscle has been brought in. For almost a year Indonesia has battled to manage one of its greatest environmental and social disasters - a massive mud volcano on the world's most populated island of Java that has submerged whole villages and more.
HILMI PANIGORO, MEDCO ENERGI CHIEF EXECUTIVE OFFICER: I've never seen anything like that before. We've seen blowouts, but I've never seen a blowout as big as this one. This is huge. We are talking about more than a million barrels a day of fluid coming out from the well bore and the area around it and that's like production of oil from the whole of Indonesia, one million barrels a day, so it's a huge scale.
The best estimates predict that it will continue to gush boiling mud for decades to come. Nothing has stopped it and now it's time for a new experiment.
PROFESSOR SATRIA BIJAKSANA, BANDUNG INSTITUTE OF TECHNOLOGY IMUD: So one string is two big balls and two smaller balls. So it is roughly close to 200kg.
In this latest desperate attempt to plug the flow, concrete balls are being dropped into the mouth of the crater.
PROFESSOR SATRIA BIJAKSANA: Normally we could put somewhere between 40 to 60 balls a day.
Professor Satria Bijaksana is one of the team behind this experiment. He admits it's never been tried before nor is it without its critics.
PROFESSOR SATRIA BIJAKSANA: When we start this project basically there was a lot of sort of concern from society in general and in fact from some scientific community that this could lead to the balls becoming projectile, OK, and so far, thank God, it has not happened.
From 5,000 cubic metres per day when it first erupted in May last year to 150,000 cubic metres today this mud volcano shows no signs of slowing down. And its full impact is not yet known with new problems emerging as the ground around here begins to subside. This man's house lies just over there, but you can't see it.
MAN (Translation): 100 metres away, it's fallen two metres.
Houses here are sinking as the mud settles, leaving only the salty water that erupted with it visible. It erupted close to where an exploration company was drilling for gas two days after a massive earthquake flattened much of Yogyakarta, 600km away. So far, the mud has swamped more than 9,000 houses and dozens of factories. It's forced the permanent relocation of the cross-Java toll road, and the rail link will have to be moved. In this village, what's not submerged is being carried away. Juwarno is salvaging what he can from his family's home. Almost one year on he's waiting for compensation to be paid for what he's lost.
JUWARNO, SIRING VILLAGE (Translation): I would like the compensation for my house and land to be settled quickly. That's all I'm asking. "Cash and carry". I don't want to be relocated. I want hard cash as compensation for my house and land.
As the flow continues to advance, thousands more live in fear their houses could soon be swamped. It now covers more than six square kilometres an area roughly the size of Sydney's CBD.
SATIMO (Translation): That was the route to Basuki village. It led to the tollway. Those trucks carrying... they come from Pasuruan. They transport sand and rocks.
Along the site's western edge, all that protects these villagers from going under is this 3km-long and 15m-high levee. It's holding back some 21 million cubic metres of mud.
SATIMO (Translation): Over there, next to the levee. My fields were there. Over there. These were fields.
Satimo was a rice farmer. His fields are now submerged in salty water.
SATIMO (Translation): There's lots of seepage from over there. This area was all paddy fields. There were paddy fields all the way down there.
And, like many, he fears the levee won't hold back the rising mud tide.
SATIMO (Translation): I was worried on the night all the villagers were shouting, "Mud flood! The levee's broken." It turned out the spillway wasn't working. So the water here overflowed into the village. It flowed in through there.
In November last year the levee broke. 13 people were killed when the mudflow swamped a gas pipeline, sparking an explosion. As workers test the ground for subsidence, the battle over what caused this disaster and who is going to pay for it is being slugged out. There are two schools of thought. One blames the earthquake which struck two days before the mud erupted. The other points the finger of blame at the company drilling for gas. It's pitted two of Indonesia's most powerful families - the Bakries and the Panigoros - both partners in the project and long-time political rivals - against each other.
The third partner in this project is Australian oil and gas company Santos.
Act of God or not, the fallout from this disaster is being keenly felt in Indonesia's capital, Jakarta. In a nation where politics and business have long been closely intertwined just who is going to be held accountable is being closely watched, for the company behind the drilling is part of a conglomerate owned by one of Indonesia's richest men, Aburizal Bakrie. He's also the nation's Welfare Minister and a major contributor to the campaign of President Susilo Bambang Yudhoyono.
Now, as the cost of the disaster continues to mount, one of the companies in this project has gone on the record blaming its Indonesian partner for this multimillion-dollar disaster. Speaking to Dateline, Hilmi Panigoro, CEO of Medco Energi, has openly accused its operating partner, Lapindo Brantas, of gross negligence. He claims Lapindo's subcontractor did not use the proper protective casing while drilling. Lapindo Brantas is majority owned by the Bakrie family.
REPORTER: Why do you say that it was gross negligence? What's the cause? Is it about the drilling? Is it about the casing?
HILMI PANIGORO: Well, casing is just one of them. But then we have a series of different events within the drilling sequence that we think constitute the gross negligence of the process.
This very public disaster has allowed a rare glimpse into business practices and politics in Indonesia today. Bambang Harymurti is editor of Indonesia's leading investigative magazine 'Tempo'.
BAMBANG HARYMURTI, 'TEMPO' MAGAZINE EDITOR: Because, you know, Indonesia now is kind of like the wild west, where you have law, but it doesn't really work, especially when it involve big businesses. So the whole thing is in the public eyes now because you can't hide this big flow of mud. And who is going to pay for it? And now you can't hide the company's ownerships. Everything is in the open now.
While powerful political connections have proved the path to business success in the past, it appears Minister Bakrie - a one-time presidential contender - is now paying a high price for his political ambitions. His family's companies are accused of not only causing the disaster, but trying to avoid responsibility.
BAMBANG HARYMURTI: But now, because it is owned by a politician, and the funny thing is he was responsible for the welfare of the people, and now it become different, it become you cannot just stop at paying just the maximum a limited company should pay but you are personally held responsible for this.
Aburizal Bakrie refused repeated requests to speak to Dateline. But earlier this year when he spoke to foreign correspondents in Jakarta he moved to distance himself from the disaster and his family's financial involvement in Lapindo.
ABURIZAL BAKRIE, SENIOR MINISTER FOR WELFARE: You had better ask Lapindo, OK? I am the Minister, the Coordinating Minister of Social Affairs.
He maintains the crisis was not caused by drilling but by a natural disaster.
ABURIZAL BAKRIE: And the hole is not, the hole that is drilled by Lapindo, it's nothing to do - it's no drill. The hole is outside Lapindo - the drill hose. The hole is there just coming out like this. It happens in a lot of places in the world.
The real cause, he claims - last year's earthquake, which flattened much of Yogyakarta.
ABURIZAL BAKRI: And you have to see the experts, not me. The experts which cover this thing in Jakarta, all over the world, has already said that it is not because of the Lapindo drill, but because of the earthquakes.
That view has become the mantra of those involved on the Bakrie side of the argument. Suyitno Patmosukismo is the chairman of Lapindo's parent company, Energi Mega Persada, a listed company controlled by the Bakries.
SUYITNO PATMOSUKISMO, CEO ENERGI MEGA PESADA: Many institutions did some studies, many geologists, engineers. They tend to say that this is a natural disaster rather than mechanical or technical problems of the drilling.
Amien Widodo is an environmental geologist at the November 10 Institute of Technology in Surabaya.
AMIEN WIDODO, GEOLOGIST This is the real mud from Lapindo.
He's been collecting data to see if the earthquake, whose epicentre was 600km away, could have had an impact. As head of the institute's Disaster Studies Centre, he's investigating not just what's happened here but Indonesia's response to it. With the tremor from the quake registering only 0.2 on the Richter scale by the time it reached the drilling site at Sidoarjo, he's ruled it out.
AMIEN WIDODO (Translation): What we've learnt from other instances of mud volcanoes is that they occur when the quake registers over five on the scale and is within a 50km radius. This is too far from Yogya.
Police have also been conducting their own investigations. And, despite a barrage of publicity surrounding the company's claims that this was a natural disaster, they now believe they have sufficient evidence to mount a case of criminal negligence.
NYOMAN SUKENA, POLICE INVESTIGATOR (Translation): However, after thorough investigation, we've found that the Lapindo case had criminal aspects. There were errors in the techniques used during the drilling by the drill operators.
Nyoman Sukena is heading up the police investigation. He firmly believes his team has a built a strong case against the well operator. But under Indonesian law, it is the Department of Prosecutions who'll decide whether there's enough evidence to mount a case.
NYOMAN SUKENA (Translation): This is purely a criminal case. It's a criminal case. So the only obstacles are those of coordination. If pressure has been put on others, like the public prosecutor, we don't know. But the investigating police have not been pressured by anyone.
SUYITNO PATMOSUKISMO: They are not at the present moment, they are not saying, they haven't said that this is criminal.
REPORTER: They're saying it is a criminal case.
SUYITNO PATMOSUKISMO: From very, very, very limited point of view, very limited angle, a special angle, from the police.
BAMBANG HARYMURTI: Well, it shows that police are impotent when it faces people in high positions, that our police are still far from being independent and being fair to all parts of society.
REPORTER: Even though they are, they have a huge dossier there, they're ready to go, it's up to the prosecutors to decide whether there is a case?
BAMBANG HARYMURTI: Well, you know, maybe they will say that is so, but there is always suspicion lingering. The police and the prosecutors sometimes they blame each other, you know, when they are facing what they call "a hot potato case".
It has now emerged that, following an open tender, the drilling contract for the well was awarded to a company owned partly by one of the Minister's nephews. And it's been accused of causing the mud flow by trying to cut corners and save costs.
BAMBANG HARYMURTI: Well, for instance my own magazine has found out that this company is such an inexperienced company that they never drill any oil and gas before - they only have experience in water drilling - and they are so much in trouble that a project that's supposed to take only two weeks or something has been going on for more than 90 days, so they are clearly cutting costs.
The Indonesian Government has been remarkably quiet about what caused this disaster. And it seems none of the key players want to take the rap. But the Bakrie family company accused of causing the mud volcano to erupt has already paid out more than US$142 million for a disaster it continues to deny any responsibility for. And this amount could increase significantly if anyone linked to the operation is deemed negligent.
REPORTER: If it is found in the end that it is a result of error by the company that did the drilling should they be held accountable?
SUYITNO PATMOSUKISMO: I don't want to speculate on this. We will see. We will see.
REPORTER: Does EMP accept any responsibility for this?
SUYITNO PATMOSUKISMO: What do you mean by "any responsibility"?
REPORTER: Quite simply, 'any'?
SUYITNO PATMOSUKISMO: Well, I think there should be a limit. There should be a limit.
Joint Indonesian partner Medco Energi has refused to pay, saying it's not liable. Instead, it pursued legal proceedings against operator Lapindo Brantas, accusing it of negligence.
HILMI PANIGORO: As a director of a public company I have to protect my shareholders.
But Australian exploration company Santos has paid up to the tune of US$20 million, promising tens of millions more. Its 18% stake in the joint venture has cost it dearly. Its profit line has taken a huge hit since the mud began flowing.
CHRIS BENNETT, SANTOS SPOKESMAN: We've made a provision for $A89 million in our accounts. That's the board of directors' best and most prudent estimate based upon the information we have available to us at this time.
Santos won't be drawn on what caused the disaster, and it, too, maintains its decision to contribute barrels of money is not about liability.
CHRIS BENNETT: 'Cause we think it's the right thing to do and we've determined that the most appropriate thing for Santos to do at this time is to provide full and effective support to our operator and to the national team established by the President of Indonesia and that reflects a very clear principal position by the company.
This is how Indonesia's chief welfare minister explains his family companies' actions.
REPORTER: If this is not the fault of Lapindo, why is Lapindo paying all this money?
ABURIZAL BAKRIE: I said to you there is an Indonesian way of living which you, is very difficult to be understood by you. In Indonesia, it is very, we have to do this.
BAMBANG HARYMURTI: I mean, what does he mean by Indonesian value? Does Indonesian value mean that if you are in that political position in any normal country, at least you would tender his resignation as a show of respect to the people, but this is not. I don't think that's an Indonesian value. This shows a lot of the negative side of Indonesian values.
Jumail is another struggling with the Welfare Minister's notion of Indonesian values.
JUMAIL (Translation): Yes, it was a large community. This is a small part of that community.
Jumail had only recently moved to this village. Now he's lost not just his home but his livelihood.
JUMAIL (Translation): And Aburizal Bakrie and those who work for him deny responsibility. They wash their hands, they do as they like.
But it's not so much the Minister's response to the disaster but his family company's attempts to rid itself of Lapindo and its liability that has caused the most outrage. Twice they've tried to sell it and been blocked by Indonesian regulators. The last attempt was to a company registered in the Virgin Islands.
REPORTER: There have been attempts to sell it off twice now. Is that still what you intend to do?
SUYITNO PATMOSUKISMO: Well, that is actually the best solution for us being a public company. This is to protect not only the major shareholders but including especially the minor shareholders.
REPORTER: But what about the people who have been affected by this?
SUYITNO PATMOSUKISMO: Well, they have been taken care as what we have already agreed or what was already directed by the TIMNAS - Team National.
In another corporate twist, MEDCO Energi, the company accusing Lapindo of negligence, has now been bought out for US$100. The new owner a company backed by the Bakrie family. Hilmi Panigoro maintains the victims of the disaster will be better off.
HILMI PANIGORO: I think it is a good impact for them because, as I said, we have been refusing to pay cash call. Now a new company taking over our working interest is willing and able to pay the cash call, so I think it is good for the people.
Authorities here admit they are barely coping. They've tried pumping the mud into a nearby river, but it won't flow - it's too heavy. These excavators are attempting to stir it along as dam walls grow taller. Now work is under way building a new channel direct to the sea 17km away. But nature is against them. This mud volcano is just 3m above sea level.
BUDI MUSTAFA, LOCAL TRUCK DRIVER (Translation): It might work on a small scale. But on such a large scale, I think you can't do anything.
While the companies battle it out, and the government is yet to decide whether this disaster was an act of nature or negligence, thousands of people wait for their fate to be determined. Atik Susiato has taken up temporary residence in the town's marketplace. She is yet to hear whether she qualifies for rental assistance, but without it, she's stuck here. The outcome of this disaster is very clear to her.
ATIK SUSIATI (Translation): When Lapindo has a success Lapindo gets the money. But when there's a problem like this it's mostly ordinary people who suffer.
Reporter/Camera
GINNY STEIN
Editors
ROWAN TUCKER-EVANS
KERRIE-ANN WALLACH
Subtitling
ROBYN FALLICK
Surabaya Fixer
DONNY MAULANA
Jakarta Fixer
TASYA TAMPUBOLON
Producer
ASHLEY SMITH