Class action win for Indonesian farmers after 2009 Montara oil spill

More than 15,000 Indonesian seaweed farmers stand to be compensated over one of Australia’s largest oil spills after they won a protracted class action battle against the company that ran the rig off the coast of Western Australia.

The Federal Court found the 2009 Montara oil spill travelled 240 kilometres into Indonesian waters and destroyed the seaweed crops and livelihood of West Timor farmers.

The scenes from the 2009 Montara oil spill. Credit: Bloomberg

The court found on Friday that the company that operated the rig, PTTEP Australasia, had breached its duty of care to the farmers by failing to properly seal the well, which created a “very high risk of blowout”.

Justice David Yates said there was no other plausible explanation for the widespread loss to the farmers of the Kupang and Rote Ndao regions other than the oil spill.

“The crops located where the oil was observed died shortly after the oil arrived,” Justice Yates said in his lengthy judgment.

“The obvious cannot be ignored.”

Daniel Sanda, pictured here in Sydney in 2016 when the class action was launched.Credit: Steven Siewert

The lead plaintiff in the case was Daniel Sanda, who started seaweed farming more than two decades ago.

Mr Sanda, who travelled to Australia to give evidence, said before the spill he had been earning enough money to comfortably provide for his family, which included paying for one of his children to be educated, and donating to his church.

Mr Sanda told the court he saw oil appear in the sea in September 2009 and his seaweed turned white before it was destroyed. He also saw many dead fish. He bought more seed in 2010, but the plants died a week later.

His business never fully recovered, he told the court.

Justice Yates ordered PTTEP to pay Mr Sanda damages for his losses from 2009 to 2014, which amounted to 252 million rupiah, or $22,600 Australian dollars.

“This loss was not trivial,” Justice Yates said.

“Indeed, for him it was a very significant loss.”

Justice Yates has sought further submissions to determine how many other seaweed farmers were entitled to compensation, but if the 15,000 seaweed farmers who joined the class action are deemed eligible, the damages could run into the millions of dollars.

A NASA image from September 2009 shows the extent of the oil slick created by the 2009 Montara oil spill in the Timor Sea. Credit: NASA/Skytruth

Maurice Blackburn launched the class action on behalf of the farmers in 2016.

Principal lawyer Richard Ryan said the case was one of the first environmental class actions to go to trial and win.

The case, backed by litigation funder Harbour, was also the first funded class action to be brought against an Australian company for cross-border pollution-related damage suffered by foreign claimants, Mr Ryan said.

“We are very proud to have represented Mr Sanda and our over 15,000 seaweed farmer clients in this historic win against a large multinational oil and gas corporation,” Mr Ryan said.

Rote Island seaweed farmer Nikodemus Manefa with his crop. Seaweed farmers say the Montara spill devastated their livelihoods.Credit: Jewel Topsfield

“This case represents a significant victory for our clients who suffered devastating losses to their seaweed crops as a result of the Montara oil spill.”

In a statement on its website, PTTEP said it was disappointed in the outcome and emphasised the court had only made a judgment about Mr Sanda’s claim. The claims of other farmers must be determined separately, the company said.

“PTEPP is carefully considering the judgment and the available avenues of appeal,” the company statement said.

In the case, PTEPP accepted it was negligent in suspending and operating the well, but argued the oil didn’t reach Indonesian waters and if it did, it wasn’t in a concentration toxic enough to destroy the crops. The company also denied it owed a duty of care to the farmers.

Lawyers for the company also argued the farmers’ evidence should be treated with caution, saying their memories were contaminated by conversations with each other over the years and, subconsciously, they presented their recollections that enhanced their prospects of a pay-out.

This was rejected by Justice Yates, who said he was left in “no doubt” they witnessed a single, strikingly unusual, unique event.

PTTEP Australasia is based in Perth and its parent company is Thai state-owned oil company PTEPP.

Justice Yates said he was also satisfied on the balance of probabilities that more than 2500 barrels of oil a day were discharged uncontrollably over 10 weeks after the blowout in August 2009.

The blowout occurred after the cap on one of four production wells failed. The three control barriers used to cap the well had not been tested, were all deficient and one had not even been installed, Justice Yates said.

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