• Indonesia’s New Land Procurement Law
  • March 13, 2012
  • Law Firm: Makarim Taira S. - Jakarta Office
  • The Government issued Law No. 2 of 2012 on Land Procurement for The Public Interest (“Law”) on 14 January 2012. The Law does not revoke Presidential Regulation No. 36 of 2005 (as amended). Accordingly, the former Presidential Regulation remains valid as long as they do not contradict the Law. The Law sets out clear procedures for acquiring plots of land for public purposes and therefore is intended to provide legal certainty and expedite the acquisition process.

    Under the Law, land procurement for the public interest covers development projects from infrastructure to hospitals and from airports to low cost housing: (i) National defense and security; (ii) Public roads, toll roads, tunnels, railways, train stations and railway operational facilities; (iii) Reservoirs, dams, irrigation systems, drinking water lines, drainage or sanitation, and other irrigation constructions; (iv) Sea ports, airports and terminals; (v) Oil, gas, and geothermal energy infrastructure; (vi) Power plants, transmission lines, substations and distribution infrastructure; (vii) Government information and telecommunications systems; (viii) Waste disposal and processing facilities; (ix) Government hospitals; (x) Public safety facilities; (xi) Government funeral facilities; (xii) Social and public facilities and public green spaces; (xiii) Natural and cultural conservation areas; (xiv) Government offices; (xv) City slum settlements, and housing for low income citizens; (xvi) Educational facilities or government schools; (xvii) Government sports facilities; and (xviii) Traditional markets and public parking lots.

    There are four steps in the procedure for acquiring land for the public interest, namely planning, preparation, acquisition, and hand-over.

    In the planning stage, the government entity needing land must prepare a land acquisition plan to be submitted to the relevant provincial government. At the preparation stage, the government entity together with the provincial government publishes the development plan, collects preliminary population data of the targeted land and its owners, and finally conducts public consultations to reach a consensus on the planned location among its owners. In more detail, the acquisition process involves the inventory and identification of possession, ownership, use, and utilization of the land; compensation appraisal; deliberation to determine compensation; payment of compensation; and the release of government-owned land.
    The compensation to be paid is decided among the land office officials and the owners, and may be provided in the form of monetary compensation, land replacement, re-settlement, share ownership, or other forms agreed to among the parties.

    The final stage of land acquisition for the public interest is the hand-over of released land. The Land Office will hand over released land to the relevant government entity upon payment of the agreed compensation and the release of the land occupiers’ rights.

    The Law also provides a mechanism for filing objections related to the determination of location and compensation issues. Objections in relation to the location must be filed in the relevant State Administrative Court, while objections regarding compensation are submitted to the relevant District Court.