| |

Hauling Road Land Use Conflict in Indonesia and The Solution

Road Land Conflict in Indonesia

Indonesia – with its abundance of mineral and coal resources – will inevitably provide room for conflicts of interest. There is a fine line to maintain a balance between preserving or developing a sustainable environment and exploiting mineral and coal resources as a source of the national economy. When mining activities are carried out, the lands are oftentimes near to – or even overlap with – other lands with different functions, giving rise to conflicts and disputes. On the one hand, the land use for mining activities has an important role for the public interest, such as increasing Non-Tax State Revenue which can coherently increase state revenues for the benefit of the state. This spirit is also contained in Government Regulation No. 19 of 2021 concerning Land Procurement Administration For the Public Interest Development (“GR 19/2021”).


A. Most Common Conflict of Land Use in Indonesia

Coexisting with local communities and multiple land owners of surrounding mining areas becomes challenging for Mining Business License (or Izin Usaha Pertambangan “IUP”) holders as they certainly require a significant amount of area to operate. Our observations found that most of the unavoidable land occupation problems that occur at sites are such as land overlapping with the forestry or plantation area, one-sided claims from unauthorized land owners, land rent with communities with a royalty method that went wrong, and so forth. The rising land overlapping issues in the mining sector will absolutely disrupt the business and investment situation in Indonesia. Since government roles and interventions are often very minimal, it is evidence that most of the responsibilities will be imposed on IUP holders themselves to ensure that land use conflicts are effectively prevented and resolved. 


In principle, land must be used according to its function, purpose, and benefits. Conflicts of interest between the mining and forestry sectors are common even though the potential mineral and coal resources have been mostly mapped and located in forest areas. Mining industry activities are affected by changes in landscapes and ecosystems, and contrary to the principles of sustainable development in the forestry sector. In East Kalimantan itself, mining, plantation, and forestry concessions can trigger overlapping permits. Therefore, it is crucial to have a more comprehensive understanding of the causes and impacts of land use conflicts between mining companies, local communities and land owners (including land for hauling roads), and provide conflict resolution strategies for the mining communities.


One of the interesting cases that we have worked on is related to the overlapping areas of conflict between the mining road and Taman Hutan Raya Bukit Soeharto, which is a conservation forest area. In accordance with the Ministry of Environment and Forestry Regulation Number 7 of 2021 concerning Forestry Planning, Forest Area Designation Conversion and Forest Area Function Conversion, and the Use of Forest Area (“MEFR 7/2021”), the regulation defines conservation forest as forest area with certain characteristics, which has the main function of preserving the diversity of plants and animals and their ecosystems. After field checking, it is known that the land for hauling roads used by many mining companies to transport coal from the mining site to the jetty by paying a certain amount of rent is in fact located in the Taman Hutan Raya Bukit Soeharto, which is controlled and managed by the Government. 


Referring to our specific case, the government has issued a field study report indicating the need to socialize the boundaries of the Taman Hutan Raya Bukit Soeharto area to stakeholders and users of the area directly adjacent to Taman Hutan Raya Bukit Soeharto is necessary. With this issue, we also reported this case to Polda Metro Jaya in connection with criminal acts of fraud, embezzlement, and money laundering as regulated in Article 378 of the Criminal Code or Article 372 of the Criminal code and/or Articles 3, 4, and 5 of Law Number 8 of 2010 concerning the Prevention and Eradication of the Crime of Money Laundering. The victims in this report have the right to obtain guarantees for legal protection due to alleged criminal acts committed by companies claiming to be the owner of the hauling road, which has caused substantial material losses.


In fact, this case would never have arisen if the land owners of the hauling roads had not rented out part of their land to connect Taman Hutan Raya Bukit Soeharto with the mining companies. In case the land owners of the hauling roads still want to rent out such overlapping areas, the land owners must apply for approval to use the forest area to the Ministry of Environment and Forestry. Since Taman Hutan Raya Bukit Soeharto is categorized as a conservation forest based on the Minister of Forestry Decree No SK.577/Menhut-II/2009, the overlapping conservation forest area must be converted from its present function to another forest classification prior to submitting an application for approval to use the forest area. 

Road Land Conflict in Indonesia

Read More: Other Creditors Arising From The Cessie in PKPU & Bankruptcy

B. Land Use Conversion


Within the context of improving the investment climate and business activities as well as increasing the protection for business actors, the government may designate certain forest areas for special purposes and provide options in order to support mining activities as a national strategic project. As the alternative solution, the conversion of forest area functions can be carried out by a ministerial decree, referring to Government Regulation Number 23 of 2021 concerning Forest Administration (“GR 23/2021“) as specifically regulated in Article 77.


Article 77 jo. Article 78 GR 23/2021 stipulates that the conversion of conservation forest area into protected forest area and/or production forest area can be completed partially per province with the following provisions:

  1. The area does not meet all the criteria as a conservation forest area in accordance with the prevailing laws and regulation; and
  2. The area meets the criteria for protected forest area or production forest area in accordance with the prevailing laws and regulation.


The conversion of conservation forest area can only be carried out if:

  1. there has been a change in the biophysical condition of the forest area due to natural, environmental, or human phenomena;
  2. it is necessary to re-define terms for optimizing the functions and benefits of forest areas; or
  3. the forest area is very small and surrounded by a social and economic environment due to developments other than forestry activities that do not support the continuity of natural ecological processes.


Based on Article 84 GR 23/2021, the only entity eligible to apply for partial forest relinquishment is the Minister of Environment and Forestry based on proposals submitted by the Governor where the protected forest area and production forest area are located, or the Administrator of the conservation forest area.


If the proposed conversion of functions in the framework of national strategic project activities, national economic recovery program, land acquisition for natural disasters, and land for the object of agrarian reform is to be determined by the Central Government, the application can be proposed by the minister/head of the institution appointed as the executor.


The Minister of Environment and Forestry, after receiving the proposal for the conversion of forest area functions, then forms an integrated team that shall submit the results of the research to the Minister. The Minister, based on the results of the integrated team’s research, issues a decision on the conversion of forest area functions or a rejection letter.


Any forest area that is granted a decision on the conversion of forest area functions by the Minister can be utilized for activities according to the functions of the forest area in accordance with the prevailing laws and regulation. Therefore, it can be concluded that the conversion of convertible conservation forests to non-forest land for the purpose of mining activities including for hauling roads is permitted based on Indonesian law.


Furthermore, in accordance with MEFR 7/2021, under the purpose of supporting energy security, business entities may also apply for conversion of forest area functions to be given approval for forest area relinquishment. This conversion proposal can be submitted to the Minister of Environment and Forestry by: 

  1. minister or head of any institution; 
  2. officials of the proposing ministry; 
  3. governor or regent/mayor; 
  4. authority bodies; 
  5. head of legal entity/business entity; 
  6. or individuals, groups of people, and communities.  



C. Government Role

From our limited observations, we see that the government must accelerate its effort to untangle this problem so that it can reflect the successful Clean and Clear and One Map Policies in reducing land overlapping issues in the mining sector. These land overlapping issues should be placed on various parameters such as rights and obligations, government authorities, protection and preservation of the environment, the law enforcement and so forth. One of the steps that can be taken to resolve land overlapping issues is by harmonizing interrelated regulations and conducting intense and focused socialization on every policy implied to mining business actors. 


While there is no standard formula that can guarantee and completely satisfy both parties, it is possible from our perspective that compromises can be reached if there is a cohesive partnership between large and small-scale IUP holders as well as improved consultation between the IUP holders and land owners. Local governments (land office, local mining authority and forestry agency) can certainly take more roles in the supervision and enforcement of every stage in mining activities.


D. Conclusion


Based on our research, in order for mining business activities to run smoothly, the best course of action for business actors is to be more aware of any potential conflicts that may occur in terms of land use. Furthermore, business actors must also examine and be aware of the status of the land used in mining business activities. Based on the fact that poor legal certainty in Indonesia has led us to this conclusion, business actors should be more cautious and attentive to any potential land use conflicts that may arise. 


Based on the issues described above, there are several options available for business actors when it comes to dealing with land use conflicts in carrying out mining activities, especially if the scenario involves protected forest areas: 

  1. Ensure and reconfirm the land status of hauling roads with relevant agencies;
  2. Convert the forest area designation and function; and 
  3. Report any misuse of land functions to the relevant agencies. 


In practice, to anticipate or to ensure the occurrence of land disputes within the mining activities framework, especially the land that does not have a land title certificate, such as the land with the status of Girik or Letter C, in practice we often require the completeness of the following documents: (1) field map from the land office or sub-district office (Camat); (2) location determination decision (or “keputusan penetapan lokasi”); (3) land possession letter (or “surat keterangan tanah”); (4) proof of land ownership (Girik/Letter C); (5) identity of the landlord (family identity card/national identity card); (6) land relinquishment certificate (or “surat pelepasan hak atas tanah”); (7) non-dispute land declaration (or “surat penyataan tanah tidak dalam sengketa”); (8) proof of payment of regional income contributions (IPEDA)/SPPT; (9) proof of payment of the land and building rights acquisition duty (or “bea perolehan hak atas tanah dan bangunan”); and (10) Certificate of inheritance (if the land object comes from inheritance property); (11) a statement letter from neighbours around the land object


It is unfortunate that Indonesia is still prone to this kind of conflicts, and even worse, these conflicts tend to be neglected. Therefore, it is necessary for all stakeholders to be involved to resolve this issue.


ADCO Law is a law firm that offers clients a wide range of integrated legal services, including commercial transactions and corporate disputes in a variety of industry sectors.

Over the course of more than a decade, we have grown to understand our client’s industry and business as well as the regulatory aspect. In dealing with the business dynamics, we provide comprehensive and solid legal advice and solutions to minimize legal and business risks.

Should you have more queries regarding this matter, please do not hesitate to contact us.



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: inquiry@adcolaw.com


Disclaimer: This article has been prepared for scientific reading and marketing purposes only from ADCO Law. Accordingly, all the writings contained herein do not constitute the formal legal opinion of ADCO Law. Therefore, ADCO Law should be held harmless of and/or cannot be held responsible for anything performed by entities who use this writing outside the purposes of ADCO Law.