Gambling on Agrarian Bill

A statement from the government and the chairperson of the Agrarian Bill Working Committee (RUUP) that the bill will be passed into law by the end of September has sparked calls from various sides to delay its ratification. The substance of the agrarian bill is considered problematic, besides failing to accommodate the interests of community groups that should be reached.

The bill, which resulted from a working committee discussion from June 21-23, 2019, fails to accommodate proposed provisions on the rights of the nation. The earth, water and natural resources contained therein are a gift from God to the people of Indonesia. The state "controls" the earth and in carrying out that mandate it should be responsible to the nation for the sake of achieving the greatest prosperity of the people. The agrarian bill also negates legal pluralism, because it removes provisions on the principle of ownership and ownership of land based on customary law. This opens up opportunities to interpret freely various principles, for example the principle of horizontal separation, with various legal implications.

Crucial issues

Crucial issues still found in the agrarian bill include first, the authority over land, space and (nondefined) area is exercised by the government and regional administrations. What about the village governments and customary law communities (MHA)? According to Law No. 6 of 2014 on villages, village have authority based on the right of origin, including: Regulating and managing natural resources (SDA), customary land and village land. Likewise, within the scope of the MHA region, there is an MHA authority that has a public perspective, namely regulating land, water, forest and natural resources (objects of customary rights) over the area related to the use, legal relations and legal actions regarding objects of customary rights.

Second, the position of management rights (HPL). The management right, which was originally defined as a (public) "function" in the agrarian bill, is now confirmed as a civil "right". The third party\'s land rights granted on the HPL land can be transferred and used as collateral for debt with mortgage rights. The management right can also be transferred and released to other parties. It should be understood that if the HPL land is an asset, the civil relationship between the management right holder and the third party/partner is subject to legal rules regarding the management of state/regional (BMN/D) properties as lex specialis.

The release and transfer of HPL land assets has also been regulated. If legal actions related to assets violate Law No. 1/2004 on the state treasury and related regulations on state/regional property management (PP No. 27/2014) has causes state losses, its legal impact is already clear. The agrarian bill is not positioned to draft rules that deviate from the regulations on assets.

Third, the affirmation of customary rights of the customary law community is proposed by regional governments and determined by the Home Minister. It needs to be emphasized that the determination of the subject of customary rights is coordinated by the regional governments assisted by a multi-stakeholder committee, but legal certainty regarding the object of customary rights is the responsibility of the Agrarian and Spatial Planning Ministry/National Land Agency (BPN). Synergy between the two ministries is manifested in the determination by regional heads in accordance with the scope of the area of customary rights, which can be carried out simultaneously.

The formula, according to which the confirmation of customary rights enjoyed by the customary law community is carried out after the determination of the boundaries and mapping, is incorrect. Various regional regulations or SK by regional heads that have been issued generally lack mapping of customary rights areas. The point is that every determination of the confirmation of the existence of customary rights must be accompanied by the mapping of the relevant customary land rights.

The agrarian bill removes the provisions regarding the granting of cultivation rights title (HGU) and building rights title (HGB) on customary land. This means the customary land rights of the customary law community are not recognized as an entity besides state land and land rights [freehold titles (HM), HGU, HGB, right to use title (HP)] in accordance with Article 2 of the Agrarian Law (UUPA) and General Explanation II. 2. This is a step backward from the progress made through Article 4 Paragraph (2) of the Regulation of the Agrarian and Spatial Planning Minister/Head of BPN No. 5 of 1999 on guidelines for settling issues on customary law community rights.

It is ironic that the provisions on the position of management rights (HPL) that are "mistaken" are strengthened but the recognition and respect for the customary rights of the customary law community, which are guaranteed by the Constitution [Article 18B Paragraph (2)], are even weakened through the direct abolition of the provisions on the granting of HGUs and HGBs on customary land rights.

Direct ownership rights (HM) can be given to individuals on customary land through the release of part of customary land to be granted with HM (Article 12). The freehold titles (HM) can be given to individuals on the customary land through the transfer of part of the customary land to be given with the HM (Article 12).

Fourth, the government limits land tenure. The maximum area should be determined after going through a study because of differences in the character of land rights, the amount of capital, business scale, type of business and others. The extent that has been stipulated in the regulations implementing the law could change sometime due to technological progress or other factors.

Rights holders who control and own land exceeding the maximum limit must release their excess land or be subject to progressive taxes. Provisions regarding the option are unfair when compared to the provisions of land reform which mentions that holders of agricultural land rights that exceed the maximum are obliged to release the excess land.

Arrangements regarding changes in spatial plans are also getting ambiguous. In Article 22 Paragraphs (2) and (3) it is stated that if there is a change in spatial planning, the holders of land rights are obliged to adjust their rights. If this is not done, the government or local government can take over the related land with compensation.

This stipulation becomes ambiguous when it is stated in Article 22 Paragraph (4) that in the case that the land is still controlled and utilized by the right holders by adjusting their land rights, the land right holders are obliged to hand over 50 percent of the land area affected by changes in spatial planning to the government or regional governments with compensation. What is the difference between making adjustments to the rights and not, because even if they comply with the rules, they still have to release 50 percent of the land area affected by changes in spatial planning.

Fifth, as in the case of management rights (HPL), with freehold titles (HM) cultivation rights titles (HGU) can be granted. This provision clearly violates provisions of Article 28 Paragraph (1) of the agrarian law. When HPL and HM are equated with state land, it means Article 2 of the agrarian law and General Explanation II.2 have been deleted. The regulation of HGU on HPL land strengthens the allegation regarding the granting of the status of HPL civil rights so that HPL can be used as a basis for granting all types of land rights. It could be that, over time, state land no longer exists and is replaced by HPL.

The granting of HGU whose land is in a forest area is preceded by the release of the forest area so that it becomes state land granted by HPL on behalf of the Agrarian and Spatial Planning Minister/Head of BPN. On this HPL land the HGU is granted. So far, HGU has been given on state land. HPL land is different from state land because of this, as based on Article 5 Paragraph (2) of the agrarian bill on the authority of HPL holders and regulations on the management of state/regional (BMN/D) properties, the granting of rights on HPL land cannot use legal construction on the granting of land rights on state land.

HGUs for individuals are granted for a period of 25 years and for legal entities of 35 years, with a maximum of one extension. For certain needs, the minister can extend the time period without explaining the addition of that time period (reason: mechanism, time period). If the HGU period ends and is not extended or the extension of the term expires, the land becomes state land and is controlled by the ministry with the HPL.

There is a tendency that if the land rights that were originally granted on state land were voided for some reason and the land returned to state land, its status would become HPL land in the name of the ministry. If the HGU is erased because the holder of the right physically controls the land exceeding the extent of the granting of his right, the land becomes state land with HPL status on behalf of the ministry.

What if the land area that exceeds the granting of the HGU turns out to be a forest area, or the customary rights of the MHA, or turns out to overlap with the licensing of other sectors (mining, forestry, etc.)? Can this be automatically considered state land with HPL status on behalf of the ministry? The HGB and HP can also only be granted a one-time extension. In certain circumstances, HGB and HP can be given a second extension. The "certain circumstance" clause creates legal uncertainty, because the exception indicates the absence of firmness. In contrast to the HGU, HGB, and HM, HP can be given on customary land directly with the approval of the MHA. There is no consistency in the agrarian bill related to the regulation of granting land rights on customary land.

Sixth, the regulation of sarusun ownership (ownership rights to apartment units/HMSRS) shows a manasuka (whatever someone likes) interpretation of the principle of horizontal separation. In the concept of apartment units, ownership is individual and at the same time inseparable joint ownership of land, parts and objects. HMSRS evidence is an HMSRS certificate issued by the Agrarian and Spatial Planning Minister/Head of BPN.

The agrarian bill states that when HMSRS is burdened with collateral rights where the guarantee does not include shared land, it clearly contradicts the conception of ownership of apartments. The idea of a fiduciary guarantee of HMSRS without the shared land if the owner is a foreign national or a foreign legal entity and that the shared land on which the HMSRS is owned by the foreign national or foreign legal entity changes automatically into state land, increasingly shows a baseless solution when they want to accommodate the ownership of HMSRS by foreigners or foreign legal entities because it collides with the status of shared land, which is generally in the form of HGB. If the shared land status is HP, the problem does not need to occur.

The conception of ownership of sarusun "without" shared land does not fall in the realm of the agrarian bill, but rather Law No. 20/2011 on apartments. The provision of housing for low-income people (MBR) is possible by building apartments by renting land assets of the government/local governments or endowment land with a rental period of 60 years. Because the land is rented land, which can only be owned by apartments, together with shared parts and shared objects, without shared land. The proof of ownership is in the form of a building ownership certificate (SKBG) issued by the regency/city technical agency in building affairs. SKBG can be used as collateral with fiduciary debt. The formulation and ideas stipulated in the agrarian bill secretly encroaches on the authority of other sectors.

Seventh, with regard to the provisions on land banks (BT) related to institutions, their tasks and functions need to be discussed with the Finance Ministry, because they are related to asset management, so they should not be confused with existing institutions. Provisions that land banks can manage assets independently by, among other things, collaborating with third parties, has the potential to be prioritized rather than carrying out its main duties and functions in providing and distributing land to ensure the availability of land for public use, social interests, and others. Because of their main duties and functions, it will be inappropriate if land banks are the subject to HPL.

Racing against time

Observing various weaknesses of the agrarian bill coupled with the need for dialogue and to accommodate input related to, among other things, agrarian reform and the resolution of agrarian conflicts across sectors that have a large-scale and wide impact, gender mainstreaming in land tenure and ownership, elaboration on the ecological function of land in the agrarian bill articles, as well as feedback from the business world related to investment interests requires time to complete.

Accommodation means sorting and choosing, accepting and rejecting proposals accompanied by their reasons in terms of concepts, philosophies, principles, synchronization with other relevant laws and the social impacts that may arise from that provisions. The improvement of weaknesses plus the accommodation of substance proposed by various parties must be reorganized into a unified and integrated unit in the agrarian bill along with its implementation.

If the agrarian bill, which is produced through transparent and participatory public consultation, can provide guarantees for the achievement of agrarian justice and legal certainty and legal protection, it will be supported by the community.

Maria SW Sumardjono, Professor at the School of Law, Gadjah Mada University, and member of the Indonesian Academy of Sciences