Homework after Indonesia’s Land Acquisition Law

The House of Representatives (DPR) passed a Law on Land Provision for the Development for Public Interest on Friday (16/12).

For those who have been involved in infrastructure provision in Indonesia, the new land law provided a breath of fresh air in the process of acquiring land that is much needed for infrastructure projects in the country. The Law is not a novel policy, but in the form of Law (Undang-undang) it provided better legal certainty compared to the previous Presidential Regulation stipulating the similar matter.

Based on the Law, it set a timeframe for acquiring land, whereby all of the land acquisition process should be finished within a maximum of 436 working days, which includes notification, public consultation, and dispute settlement mechanisms that provides legal protection for rightful landowners to get their fair share of compensation.

Compensation is also not limited to money, as rightful landowners can be compensated through land swaps, resettlement, stock ownership or any other forms agreed by both parties.

Agrarian reform activists fear that the Law can be used to forcefully take land for the benefit of corporations, such as in the recent case of Mesuji whereby farmers’ land are allegedly taken away by force for palm oil and rubber plantations. The Law, however, specifies exactly which categories of projects are eligible in the name of “public interests” and palm oil is not included. Moreover, the Law emphasizes that it is the responsibility of the state to acquire land from rightful land owners. Even if they are in a public-private partnership agreement for a project, any risks involved in acquiring land is shouldered by the government.

The term “rightful land owners” imply that landowners truly own their piece of land and are registered, not just simply owning a land certificate. Problems will then arise with those whose lands are not registered, and considering that most indigenous land or ulayat rights in Indonesia are not registered, the fears of landowners being evicted out of their land – their home – is not baseless.

There are due process mechanisms in the new Law to ensure that anyone who is affected with the land acquisition can voice out their concerns. However, embedded in the spirit of the Law is the assumption that at least two enabling conditions are in place: that Indonesia has an efficient land registration system and an effective land-use planning.

Unless we get these two enabling conditions right, no matter how good the land acquisition law and its bylaws are drafted, implementation will still be difficult.


5 thoughts on “Homework after Indonesia’s Land Acquisition Law”

  1. I take it from you this is a huge improvement. (Much) better infrastructure is essential indeed. Though by reading the potential flaws you mentioned some doubts arise whether private persons’ rights are sufficiently protected.

    The law may favour the interests of multinationals and government. While it’s rather the common citizen than needs empowerment.

    I guess a real independent and competent referee is crucial. It’s not clear ( to me) whether usual legal procedures – especially now lead-time has been limited- provide that kind of security.

    1. The Law also stipulated that any appeal of the Governor’s decision for land acquisition should go to PTUN (Pengadilan Tinggi Usaha Negara), whereby if I’m not mistaken previously it was directed to the usual district court (Pengadilan Negeri). A final and legally binding decision would be then decided by the Supreme Court if one of the parties decide to go through cassation.

      This wasn’t laid out well in the previous presidential regulation, so yes, another improvement in my view.

      I wrote about Indonesia’s judicial reform in this blog as well. Indonesia’s judicial system is not perfect, and they still have a long way to go in terms of impartiality and transparency, but it’s relatively better compared to pre-Reformasi.

  2. Hi Fika..
    Thanks for the interesting and informative article. I had two further queries: (1) Has the new law provided any guidelines as to how the compensation is to be provided for acquiring land, and (2) where can i find the English copy of the law…
    Would really appreciate if you could provide the above details.
    Thanks Naveen

    1. Although the Law has been passed, it is not numbered and gazetted yet. Furthermore, unless the bylaws are also issued (to my knowledge in the form of National Land Agency regulation and/or Presidential Regulation) it will not be immediately effective. As a result, current land acquisition process will still follow the existing procedures.

      The new Law did provide some guidelines on the compensation, but bearing in mind the caveats above, better to wait first or consult your lawyer.

      1. Thanks for the prompt reply. Could you please help me as to where can i find the copy of the new law (English Version). As in are there any websites where the government would have put up the copy of the new law for access to people?

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