Procedures of Land Acquisition for Public Use

A. Scope of Land Acquisition for Public Use

Land Acquisition for Public Use is defined as an activity of land procurement by providing appropriate and fair compensation to the Entitled Party (“Pihak Yang Berhak”) for the benefit of the nation, state and society.

Land Acquisition for Public Use must be carried out by the Government, and the land is subsequently owned by the Government or Regional Government. In the event that the Relevant Agency (i.e state institutions, ministries and non-ministerial government agencies, provincial governments, district and city governments, and State-Owned Legal Entities State-Owned Enterprises that receive special assignments from the Government) that requires Land Acquisition for Public Use is a State-Owned Enterprise, the land then becomes the property of that State-Owned Enterprise.

Under Law 2/2012, there are 18 classifications of land development for public Use. However, Law 11/2020 has added 6 additional classifications. The following are the land development classifications for public use:

  • national defense and security;
  • public roads, highway, tunnels, railways, railway stations, and railway operating facilities;
  • reservoirs, dams, weirs, irrigations, drinking water channels, sewerage and sanitation, and other irrigation structures;
  • ports, airports, and terminals;
  • oil, gas, and geothermal infrastructure;
  • power plants, transmissions, substations, power networks and power distributions;
  • Government telecommunications and informatics networks;
  • Waste disposal;
  • Government/regional government hospitals;
  • Public safety facilities;
  • Government/regional government cemeteries;
  • Social facilities, public facilities, and public green open spaces;
  • Natural and cultural reserves;
  • Government/regional/village government offices;
  • Spatial arrangement for urban slum, and/or land consolidation, and housing for low-income society;
  • Government/regional government educational infrastructure or schools;
  • Government/regional government sports infrastructure;
  • Public markets and public parking lots;
  • Upstream and downstream oil and gas industrial areas, special economics areas, industrial areas, tourism areas, food security areas, technology development areas – that are initiated and/or controlled by the Central Government, Regional Government, State-Owned Enterprise (BUMN), or Regional-Owned Enterprise (BUMD)

 

B. Procedures of Land Acquisition for Public Use

There are 4 stages to carry out a land acquisition for public use, namely (i) planning, (ii) preparation, (iii) implementation, and (iv) result delivery.

  • Planning

 At the Planning stage, the Relevant Agency is required to prepare a land acquisition planning document that is prepared based on a feasibility study. The document must at least contain the following information:

  1. purposes and objectives of the development plan;
  2. conformity between the Spatial Plan with the Regional and the National and Development Plans;
  3. land location;
  4. the required land area;
  5. general description of land status;
  6. estimated time for implementation of Land Acquisition;
  7. estimated period of development implementation;
  8. estimated land value;
  9. budgeting plan. And
  10. Preference for compensation formula

Article 8 of GR 19/2021 stipulates that the Planning Document must be submitted to the governor/regent/mayor and is valid for two years from the date it is determined by the head of the relevant agency.

  • Preparation

There are 3 stages in the preparation for a development plan, namely (i) notification, (ii) preliminary location data collection, and (iii) public consultation.

The first is the notification of the development plans, which is conveyed to the community either directly or indirectly.

The second is preliminary data collection, which includes collecting the preliminary data of the Entitled Party and the Land Acquisition Object. This is carried out within a maximum period of 30 (thirty) working days from the notification of the development plan.

The third is public consultation, which is carried out to reach an agreement with the Entitled Party regarding the location of the development plan. The involvement of the Entitled Party can be carried out through a representative with a power of attorney signed by the Entitled Party over the location of the development plan. On the basis of that agreement, the land-requiring agency submits an application for location determination to the Governor.

The Governor determines the location within 14 working days from the receipt of the application for the location determination submitted by the land-requiring agency.

  • Objection

If during the Public Consultation stage there are still parties who object to the location of the development plan, the land-requiring Agency shall report the objection to the Governor. Afterward, the Governor forms a team to study the objection to the location of the development plan.

The team’s study result is in the form of recommendations for whether the objection is accepted or rejected within a maximum period of 14 working days after the application is received by the governor. Then, the governor based on the recommendation issues a letter of acceptance or rejection regarding the objection to the location of the development plan

The Entitled Party, if they still object to the plan, can file a lawsuit at the local State Administrative Court (Pengadilan Negeri Tata Usaha) no later than 30 working days after the issuance of the location determination.

Determination of the location of the development plan for public use must be granted within 2 years and may be extended for a maximum of 1 year if the determination of the development plan location for public use is re-carried out on the remaining land of which the procurement has not been completed. However, this regulation has been changed by Omnibus Law that it must be granted within 3 years and may be extended once for a period of 1 year.

  • Implementation

The land-requiring agency must conduct the implementation of the Land Acquisition to the Land Agency. The implementation includes:

1. inventory and identification of the land ownership, use and utilization.

This is conducted by measuring and mapping the land area per plot and by collecting data of Entitled Party and Land Acquisition Objects.

The inventory and identification must be implemented within a maximum period of 30 working days. The results of the announcement, verification or correction must be determined by the Land Agency and subsequently become the basis for determining the Compensation for the Entitled Party.

2. assessment of compensation.

The Land Agency assesses the Appraiser in accordance with the provisions of laws and regulations. The Assessment of the value of Compensation determined by the Appraiser is carried out per plot of land, including:

  • soil;
  • above ground and underground space;
  • building;
  • plant;
  • objects related to land; and/or
  • other assessable losses

The Compensation can be given in the form of:

  • money;
  • replacement land;
  • resettlement;
  • shareholding; or
  • another form agreed upon by both parties.

3. deliberation to determine the compensation

To determine the form or amount of the Compensation, the Land Agency consults the Entitled Party in a maximum period of 30 (thirty) working days after the Appraiser delivers the results of the assessment to the Land Agency.

The results of the agreement in deliberation are the basis for determining the Compensation for the Entitled Party, which must be published in the Minutes of Agreement.

In the event that there is no agreement regarding the form and/or the amount of Compensation, the Entitled Party can file an objection to the local district court no longer than 14 working days after the Compensation deliberation.

4. Granting the compensation

The Compensation for Land Acquisition Objects is granted directly to the Entitled Party. At the time of granting Compensation, the Entitled Party who receives Compensation must:

  • perform a waiver of rights; and
  • submit evidence of ownership of the Land Acquisition Objects to the Relevant Agencies through the Land Agency.

Evidence of ownership is the only valid evidence in accordance with the law and inviolable at a later time.

In the event that the Entitled Party refuses the form and/or the amount of Compensation based on the results of Compensation deliberations, or the decision of a district court/Supreme Court as referred to in Article 38, the Compensation must be deposited at the local district court.

Compensation custody also applies if:

  • the party entitled to receive Compensation is not known for its existence; or
  • the Land Acquisition Object that will be Compensated is:
    • the object of a case in court;
    • still disputed regarding its ownership
    • confiscated by an authorized official
    • made as a guarantee in the bank.

5. Releasing the land. (Pelepasan Tanah Instansi)

Based on Article 45 Law 2/2012, Compensation is not provided for the Land Acquisition Objects, except for:

  • Land Acquisition Objects on which buildings have been established and used actively to carry out government duties;
  • Land Acquisition Objects owned/controlled by State-Owned Enterprises/Regional Owned Enterprises; and/or
  • Land Acquisition Objects for village treasury

The Object of Land Acquisition must be released no later than 60 (sixty) working days since the determination of the development plan location for Public Use.

  • Result Delivery

The Land Agency submits the results of the Land Acquisition to the land-requiring agency after:

  1. the granting of Compensation to the Entitled Party and Waiver of Rights have been implemented, and/or

the granting of Compensation has been deposited at the district court.

C. New Regulations Based on Omnibus Law

1.Implementation process

If there is still land remaining after an unsuccessful process of land acquisition, the Entitled Party is entitled to ask for Compensation under certain conditions:
1) If the relevant land area is not more than 100 m2, the Entitled Party can receive Compensation;
2) If the relevant area is more than 100 m2, the Entitled Party can be compensated after the assessment from the appraisal team made by the Governor is carried out.

2. Time period
Rights, permits, or concessions over land and/or areas (“Rights of Land”) must be revoked and returned to the state if the land is intentionally not cultivated or neglected for a maximum period of 2 years after being granted. The legal consequences are that the land must be returned to the state and based on Central Government determination, such Rights over the Land can become an asset of a land bank.

Settlement of the status of Land Acquisition Object that are included in the area of:
• Land of the village treasury (tanah kas desa);
• Waqf land
• Customary land (tanah adat)
• Land assets of the central government, local government, State Owned-Enterprise and Regional-Owned Enterprise,

must be completed until the Location Determination is obtained.

3. Compensation

Under Law 2/2012, the amount of the Compensation determined by the appraiser becomes the basis for deliberations to determine the Compensation. However, under the new regulation (GR 11/2020), The amount of the Compensation is final and binding, and the deliberation will only discuss further about the form of Compensation. If the Entitled Party refuses the amount of Compensation, the Compensation will be deposited to the local district court.

***

ADCO Law earns the trust to represent clients from multinational companies to emerging entities across a wide range of industries to achieve their business objectives in Indonesia

By combining commercial sensibilities and legal expertise, ADCO Law assists the clients to structure, organize and implement their business ventures and investments, including structuring, financing and securing investments as well as establishing new foreign companies in Indonesia. Should you have more queries regarding this matter, please do not hesitate to contact us.

ADCO Law
Setiabudi Building 2, 2nd Floor, Suite 205C
Jl. H.R. Rasuna Said Kav. 62, Setiabudi Karet
Jakarta Selatan, 12920, Indonesia.
Phone : +6221 520 3034
Fax : +6221 520 3035
Email : info@adcolaw.com
Website : www.adcolaw.com

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *