Understanding the Changes of Land Procurement for Public Interest Development Provisions under the Job Creation Law: Key Points to Know
By Adrian Fernando / 19 May 2023
Gain a comprehensive understanding of the changes in land procurement for public interest development under the Job Creation Law. Discover key points such as the resolution of land status, additional categories of types of development, the role of location determination, and the period of land procurement.
Key Points
- The issue of land status must be resolved at the latest on the date of location determination.
- There are six additional categories of types of development for the public interest.
- The location determination issued by Governor or Regent/Mayor is also applied as the confirmation of space utilization activities (KKPR), technical considerations, and environmental impact analysis (Amdal).
- The location determination is issued for a period of three years and can be extended for one year.
Background
Land procurement for public interest development (“Land Procurement”) is an activity of providing land for the benefit of the nation, state, and society, by providing fair and compensation value to the rightful party. The implementation of Land Procurement is carried out by revoking the land rights owned by the society by providing compensation, as the implementation of social function.
The regulations governing Land Procurement in Indonesia have changed since the enactment of Law No. 11 of 2020 on Job Creation, as revoked by Law No. 6 of 2023 on the Determination of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation to become Law (“Job Creation Law”).
To date, the regulations of Land Procurement are regulated in several provisions, as follows:
The regulations governing Land Procurement in Indonesia have changed since the enactment of Law No. 11 of 2020 on Job Creation, as revoked by Law No. 6 of 2023 on the Determination of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation to become Law (“Job Creation Law”).
To date, the regulations of Land Procurement are regulated in several provisions, as follows:
- Law No. 2 of 2012 on Land Procurement as amended by Job Creation Law;
- Government Regulation No. 19 of 2021 on Implementation of Land Procurement for Public Interest Development; and
- Minister of Agrarian and Spatial Plan/Head of National Land Agency Regulation No. 19 of 2021 on the Implementing Regulation of Government Regulation No. 19 of 2021.
1. The issues of land status must be resolved at the latest on the date of location determination. The settlement of land status issues are related to lands which are located in forest areas, village treasury land, waqf land, customary land, and/or land assets of the central government, local government, state owned company (“SOCs”)/regional owned company (“ROCs”), must be resolved at the latest on the date of location determination.
2. There are six additional categories of types of development for public interest, as follows:
3. The Land Procurement with an area of not more than five hectares can be carried out directly by the agency requiring the land with the rightful party.
4. There are five conditions that are no longer needed after the issuance of location determination by the Regional Head, namely:
5. The location determination is issued for a period of three years and can be extended for one year. Therefore, the Land Procurement needs to be carried out based on the above-mentioned period. Previously, the location determination period was issued for two years and can be extended for a maximum of one year.
2. There are six additional categories of types of development for public interest, as follows:
- upstream and downstream oil and gas industrial areas;
- special economic zones;
- industrial area;
- tourism area;
- food security area; and
- technology development area;
3. The Land Procurement with an area of not more than five hectares can be carried out directly by the agency requiring the land with the rightful party.
4. There are five conditions that are no longer needed after the issuance of location determination by the Regional Head, namely:
- confirmation of space utilization activities (KKPR);
- technical considerations;
- environmental impact analysis (Amdal);
- land usage outside the forest area and mining area; and
- land usage outside the peat/coastal border area.
5. The location determination is issued for a period of three years and can be extended for one year. Therefore, the Land Procurement needs to be carried out based on the above-mentioned period. Previously, the location determination period was issued for two years and can be extended for a maximum of one year.
Key Contacts
Please get in touch with the designated key contacts via phone or email if you have any inquiries or would like to learn about the potential impact on your business.
Ivor I. Pasaribu
Managing Partner
+62 21 2276 1962
Adrian Fernando
Partner
+62 21 2276 1962
