Strengthening the land bill
The House of Representatives-initiated land bill, which has been under deliberation since Sept. 24, has been included in the 2019 National Legislation Program (Prolegnas). The government has proposed several new norms to the bill, including in its firm revocation of 23 articles in Agrarian Law No. 5/1960.
The government, represented by the Agrarian and Spatial Planning Ministry, proposed the problem inventory list (DIM) dated November 2017 as deliberation material. We can note three issues based on the government’s proposal, namely (1) strengthening regulations to respond to prevailing doubts and hindrances, (2) introducing new norms and (3) the presence of stipulations that require coordination with ministries and agencies other than the Agrarian and Spatial Planning Ministry.
Several proposals in the first group, including those related to the status of rights, the revocation of land rights, land registration system and land courts. The stipulation that said an ownership right (HM) on land with right-to-manage (HPL) for housing and transmigration will result in the revocation of the HPL right is positive, as HM is the “strongest” and “most comprehensive” among other land rights. Furthermore, there is no time limits on HM and HPL.
The revocation of right-to-rent-building (HSUB) is understandable as this may become ambiguous with the stipulation that right-to-build (HGB) and right-to-use (HP) may be imposed on land with HM. However, replacing HSUB with a right-to-rent-land (HST) as a type of land right that can be recorded in a land registry will only bring forth questions, including (1) whether or not land rent agreements give rise to rights, (2) what legal considerations based the argument that HST needs to be recorded and (3) what legal consequences may arise in the event that HST is not recorded.
The formulation of revocation of land rights as the reason for land rights’ erasure using the phrase “released and revoked” for the public interest highlights ambiguity caused by principle differences on the concepts of “rights release” and “rights revocation” in the context of obtaining land for the public interest.
To ensure legal certainty, the implementation of a positive land registration system must be supported, apart from the implementation of a rechtsverwerking institution with regard to the loss
of right to demand certificate annulment. Carefulness in determining the time period of the regulation’s entry into force and the presence of a certificate guarantee agency is a must.
In assessing the idea of establishing a land court, the absolute competence of such special courts and the presence of qualified human resources with mastery of multi-layered land laws must be considered. However, stipulations on land courts in the Land Bill are improper as the creation of a special court must be regulated in a separate law, as is reflected in the existence of the laws on human rights courts, tax court, corruption court, commercial court and religious court.
New norms in the land bill
As a consequence of changes in spatial planning, incentivizing and disincentivizing institutions are introduced that are different from the concept formulated in Law No. 26/2007 on Spatial Planning. In principle, incentives should be given for activities in line with spatial plans while disincentives are in place to reduce activities not In line with spatial plans.
The government’s proposal on changes in spatial planning include (1) the provision of incentives in the form of compensations if the changes affect land use from productive to non-cultivation, such as from cultivation land into protected areas; (2) the provision of disincentives if the changes in land use generate added values, for instance from rural areas into urban areas. In such conditions, 50 percent of the land of which the use has changed must be given to the government in exchange for compensations.
Apart from a fair calculation of compensation, there must be strict regulation on the use of land handed over to the government, especially in agrarian reform (RA) programs.
Among the new norms that may potentially create legal uncertainty is, firstly, those relating to HPL stipulation. In the law’s formulation, one part seems to indicate that HPL is a public “function” and yet another part indicates that it is a form of land right. HPL subjects are categorized into two groups, namely (1) central and regional governments and (2) Land Banks, public service agencies (BLU), state- and region-owned enterprises and state- and region-owned legal entities.
Explicitly, HPL subjects in the second group can be managed in cooperation with third parties. The land right can be transferred, be burdened with a mortgage right and be extended or renewed with the written agreement from HPL holders. For HPL subjects in the first group, it is only mentioned that the issuance of HPL is merely a carrying-out of job and function.
In reality, central and local governments’ HPL lands can also be used by third parties in line with Law No. 1/2004 on State Treasury and Government Regulation (PP) NO. 27/2014 on the management of state- and region-owned goods. Furthermore, it is mentioned that HPL can be released or transferred through land exchange. Here we can see ambiguities in the regulation of HPL. If it is public, a HPL must be released so that the land can be given with certain rights to another party. If HPL is directly transferred, HPL can be seen as a type of land right.
Ideally, procedures formulated as “transferral” can be carried out through the release of HPL for a certain purpose, namely to be given to parties willing to exchange the HPL land with a building. For the first time, a HGU can be imposed on a land with HPL. This regulation must be synchronized with relevant regulations related to the registry of assets to avoid any ambiguity if a HGU is imposed on a HPL land while both rights are assets of the same right owners.
Secondly is regulations on indigenous rights. The reaffirmation of indigenous rights in regional regulations are conducted after regional boundaries are established and mapped cadastrally (in line with land boundaries determined by an owned land registration agency). To prevent any misunderstanding, it should be made clear that only public and private indigenous rights need reaffirmation and that all regional regulations should essentially be accompanied with regional maps. In reality, almost all regional regulations are not equipped with maps. Attaching maps to existing regional regulations should be prioritized.
If the land bill formulates that reaffirmations are carried out by regional regulations, what about the reaffirmations of indigenous rights that have often been done through gubernatorial or regent’s regulations? Furthermore, the regulation that HM and HPL can be imposed upon lands with indigenous rights should be reviewed. Upon private indigenous lands, certificates of collective ownership can be issued.
However, it can be seen as odd if HPL if given to customary law communities (MHA). On the one hand, in line with the Agrarian Law’s Article 2 and General Explanation II.2, indigenous lands are separate entities outside of state lands and right lands. On the hand, HPL is given due to conversion or rights administration upon state lands.
MHA is not a HPL subject and the Land Bill’s Article 8 Point 1 juncto Article 10 mentioned that HM, HGU, HGB and HP can be administered directly on indigenous lands under a written agreement between MHA and third parties. Furthermore, in Article 41 Point (5)c, it is made clear that PNBP becomes MHA’s rights if a land right is imposed upon its indigenous lands. Another inconsistency is found in Article 24 Point 4, namely that if HGU is to be administered upon an indigenous land, the land should have a HPL right first. This is despite Article 10 stipulates that HGU can be directly administered on indigenous lands.
Third is regarding HGU, HGB and HP. HGU is administered with a period of 25 years and can be extended for another 25 years or renewed for 35 years. The clause that says, for certain needs, relevant ministers can add to HGU’s period must be reconsidered for the sake of legal certainty. Under the reason of attracting investors and boosting land and housing economy, for the first time, foreigners can be subjects of HGB for home and apartment ownership. This proposal seems to be a resolution of the obstacle of collective-land ownership in the concept of low-cost apartments (rumah susun or rusun) that does not include any opportunity for foreigners to own apartments if the building stands on a land with HGB.
This is an effort to revoke Agrarian and Spatial Minister’s Regulation No. 29/2016 which is filled with so many errors. A contrario, outside of apartment units, foreigners are not subjects of HGB. There
seems to be special treatments for ownership of apartment units by foreigners. It is stipulated that HGB’s period is 25 years, with further extension of 20 years and renewal of 25 years.
Such a regulation also applies on HGB imposed on lands with HM. However, the time period for apartments is 30 years, with further extension of 20 years and renewal of 40 years (Article 30 Points 3 and 5). Right-to-use can be given for a period of 30 years, with further extension of 20 years and renewal of 30 years. The formulation of Article 34 Point 2 that foreigners can obtain HP for homes, both single houses and apartments, is confusing as foreigners may opt for the application of Article 29 Point 2 juncto Article 30 Points 3 and 5, which are clearly more beneficial on apartment ownership. Besides, what are the legal considerations of providing HP for foreigners wishing to own homes.
Outside of the inconsistencies in these three matters, there is also the formulation on the maximum limit of land control and ownership (Article 13 Point 1). However, Article 13 Point 2 opens the opportunity for an exception of this maximum limit rule. Such an exception must be detailed further to prevent any multi-interpretation.
The impression of “moving forward and backward” is also seen in Article 13 Point 4 that stipulates that, if land control and ownership goes beyond limit, there is an alternative to release the excessive and or pay progressive tax. The question is: what is the philosophical foundation of limiting land control and ownership? Is the alternative applicable for all forms of land control and ownership? How should the principle of “fair economy” be applied in this regulation that creates certain alternatives?
On the forms of land control and ownership that are prone to gaps in access to land acquisition and use, which often leads to conflicts and disputes, especially in relation to HGU, ideally there should be rules to release the maximum excess of land. It will feel unfair if right owners can pay progressive tax while over-limit control and ownership of agriculture land leads to requirement to release the excess land in line with land reform regulations. Please also note that Presidential Regulation No. 86/2018 on agrarian reform stipulates that maximum over-limit land is a land reform object that can be redistributed to beneficiaries that fulfill the requirements.
Reactive vs proactive
Two things should be noted related to intersectoral authority. First, Article 51 mentions that objects of land registry cover all lands and regions. Based on their status, public and private state lands, right lands and indigenous lands can be registered in line with Agrarian Minister’s Regulation No. 5/1999. “Registered” here is defined as a process that does not always ned in the issuance of land right certificate. Registration of state land, namely lands without any right attached to it, is conducted by including the land in the land registry.
Land books are not given and, therefore, certificates are not issued on state lands. Therefore, if a land is registered, it is registered as state land. Therefore, no HP or HPL is required on lands in the region. Lands and regions are registered to provide legal certainty. Second, when Article 3 mentions
that the President is the implementor of the state authority to control lands and regions all over Indoensia and that the authority can be delegated to ministers of agrarian and spatial planning affairs, this should be understood as a general norm in line with Article 33 Point 3 of the 1945 Constitution.
In reality, ministers’ authority is liimted on seven affairs in line with prevailing laws. Therefore, the authority of managing, organizing, controlling and issuing licenses on state lands on the region lies on relevant ministers. Amendments to the Basic Agrarian Law can be done as long as its legal land politics is aimed at realizing the mandates of Article 33 Point (3) of the 1945 Constitution, especially with regards to the phrase “the greatest prosperity of the people”, namely that the people’s prosperity is prioritized, not the prosperity of individuals. Considering that the law is a system, proposed new norms should be supported by comprehensive policy papers to prevent any possible distortion, contestation and reduction of norms. (MARIA SW SUMARDJONO, Professor of Law, Gadjah Mada University; Member, Indonesian Academy of Sciences)