The South Jakarta district court ruled that the mudflow in Sidoarjo district was a 'natural disaster' and not caused by gas exploration drilling as alleged by Indonesian Forum for the Environment, Santos said on Friday.
The mud volcano began flowing out of the the Banjar Panji-1 exploration well in May 2006 and has since inundated more than 600 hectares, swamping several villages and displacing more than 16,000 people.
Several experts and previous joint venture partner Medco said the disaster was triggered by operator Lapindo’s failure to case the well allowing hot, high-pressure water to escape from 2800m below the surface and flow into the surrounding countryside.
However, Lapindo has claimed that the volcano was caused by an earthquake that occurred 300km away two days previously.
Lapindo is owned by the politically and economically influential Bakrie family. Aburizal Bakrie, Indonesia’s Welfare Minister, is a close ally of President Susilo Bambang Yudhoyono and is reported Indonesia’s richest man.
Chief judge Wahjono told the court said the court based its judgment on expert testimony brought by Lapindo. He said the court was unable to accept the environmental group's own expert witnesses because of a lack of supporting evidence.
The Indonesian Forum for the Environment told Agence France-Presse that the court had made a 'fundamental mistake' in rejecting the group's expert testimony and there would be an appeal against the decision.
WAHLI began legal action in February involving the Brantas partners, the Indonesian Government and President Yudhoyono, as well as several other government and provincial officials, alleging major environmental damage from the mudflows.
In its claim, WAHLI demanded the Indonesian Government direct PT Lapindo Brantas to allocate a budget and resources to overcome the mudflows and tackle the environmental damage they caused.
The court not only dismissed the charges, but also fined the plaintiffs more than $1 million rupiah ($A125).
The same court last month also rejected a case brought by the Indonesian Legal Aid Foundation, which claimed that the government and Lapindo had been negligent in dealing with the effects of the disaster.
Indonesia's national planning agency has put the economic damages at $334 million a month and says the final bill could be as high as $8.6 billion.
In early 2007, British experts said the mud volcano could flow for another 30 years.
