Indonesia's regulatory framework governing land is considered flawed and many believe it requires a comprehensive overhaul. (Antara Photo/Iggoy el Fitra)

Here's Why Indonesia Must Pass the New Land Bill


JULY 19, 2019

Jakarta. Indonesia must pass the new land bill into law to give investors legal certainty and avoid conflict with indigenous communities, experts say.

Deliberations on the land bill may be delayed indefinitely after the special committee in the House of Representatives tasked with drafting it signaled that there are various complex issues that must be accommodated.

The draft bill, which has been included in the list of priorities under the National Legislative Program (Prolegnas) since 2009, regulates, among others, the boundaries of state-owned forest zones.

Indonesia's regulatory framework governing land is considered flawed and many believe it requires a comprehensive overhaul. The land rights of unregistered owners, mostly indigenous people, often turn into long legal battles. Investors in the agriculture industry also await legal certainty amid fears that the land issue may become the main legal obstacle in their plans to invest in the sector.

The People's Consultative Assembly (MPR), in a 2001 decree on agrarian reform and natural resources management, gave the government a mandate to perfect the 1960 Basic Agrarian Law. But each administration since then has failed to carry out a major overhaul of the way Southeast Asia's largest economy governs land.

"The wait, about 18 years [since the MPR decision], has been more than enough. Don't let this legislation meet the same fate as its older brother, Law No. 5 of 1960 [Basic Agrarian Law]," said Sudarsono Soedomo, a senior lecturer in forest management at the Bogor Agricultural University in West Java.

"Delaying it is not an option. Perfect it [the bill] if some issues are still not accommodated. Deliberate it as soon as possible," he said.

Indonesia, an archipelago of 17,508 islands, has a total territory of about 1.9 million square kilometers, 26 percent of which, according to government data, is classified as agricultural land. Various studies have shown that forests cover about 49 percent of the country's territory, or 909,070 square kilometers.

However, the government classifies 69 percent of the land area, or 1.3 million square kilometers, as forest. There are various reasons for this discrepancy, including the Ministry of Environment and Forestry's reluctance to cede authority over land to other government agencies.

Most of Indonesia's forests are state owned, based on a 1983 forestry ministry decision to divide them into four categories: protected forests, conservation forests, limited-production forests and production forests. Exploitation of the first two is prohibited, while the government may grant concessions over the last two, subject to certain terms and conditions.

However, Sudarsono said this zoning system hampers national development. For example, he said more than 46.6 million hectares the government classifies as secondary forests are unproductive.

"The argument for ecological protection leads to an enormous waste of our natural resources," he said, adding that about half of large corporations with concessions in limited-production and production forests have either abandoned the land, or failed to use it productively. Furthermore, indigenous people and local residents only own 5 percent of the total concessions the government has granted in forest areas.

"It is clear that the utilization of areas labeled as forest zones is far from fair," he said.

Sadino, an environmental law practitioner, echoed Sudarsono's arguments. He is also in favor of pushing discussions on the land bill. "There are so many rules that have become outdated and which must be updated," he said.

He pointed out that land considered "critical" or prone to forest fires should never be abandoned. Sadino said if the government overhauls its legal framework to legitimize the utilization of such land, balanced with the right responsibilities, including ensuring ecological sustainability, it would benefit not only the local economy, but also the environment.

"It should be possible to meet this challenge by utilizing unused land for productive agricultural activities," he said.