Presidential Regulation 148 of 2015 (PR 148/2015) was issued on 28 December 2015. While PR 148/2015 seeks to improve the process of land procurement for public interest developments, it is unclear whether it will make it more efficient.
Legal position before PR 148/2015
Presidential Regulation 71 of 2012 (PR 71/2012) implemented Law 2 of 2012 on Land Procurement for Public Interest Developments (Law 2/2012). PR 71/2012 was amended by Presidential Regulations 40 (PR 40/2014), 99 of 2014 (PR 99/2014) and 30 of 2015 (PR 30/2015) (the subject of a previous Client Update). PR 148/2015 is the fourth amending regulation.
Time limits for land procurement for public interest developments
PR 71/2012 provided that various (rather generous) time limits applied to the different steps involved in the process of land procurement for public interest developments.
Small-scale land procurement
PR 40/2014 provided that certain government agencies could acquire land of less than five hectares for public interest developments, by way of purchase, exchange or other means as agreed between the parties.1 (This meant these government agencies could avoid having to comply with the (more onerous) procurement requirements provided under Law 2/2012.)
Private entity involvement
PR 30/2015 provided that not only could certain government agencies (Agencies requiring land) fund the acquisition of land for public interest developments, but so too could a private entity authorised under an agreement with an Agency requiring land for a public interest development.2
PR 148/2015, amongst other things, further regulates:
the steps involved in the process of land procurement for public interest developments and shortens the relevant time limits;3
small-scale land procurement;4 and
land procurement by private entities.5
Shorter time limits for land procurement for public interest developments
By introducing new, and shortening certain pre-existing, time limits applicable to the different steps involved in the (extensive) process of land procurement for public interest developments, PR 148/2015 seeks to significantly reduce the total number of days
1 Article 121 of PR 40/2014.
2 Article 117A of PR 30/2015.
3 Article 46, Articles 47(1) and (2), 49(4), 50, 51(3), 54(1), 76(2a) of PR 148/2015
4 Article 121 of PR 148/2015.
5 Article 121A of PR 148/2015.
between the relevant Governor establishing a regional preparation team and the procurement being registered. Now, for example:
the relevant Governor must issue a permit enabling an entity to procure, and complete related processes in relation to, land for a public interest development (Location Determination) within seven days of a consensus being reached with local communities and other relevant stakeholders (this was not previously regulated). Further, if a Location Determination is not issued within seven days, it is deemed to have been issued;6
the working unit responsible for identifying various characteristics of the relevant land (including how it is used, the entities or persons which control it, and its owner) must publish their report on such characteristics within 14 days.7 Previously, this working unit could only release their report after 14 days;8 and
compensation must be distributed to title holders of the relevant land within seven days of the amount being determined.9 Previously, the compensation had to be distributed within 14 days.10
Small-scale land procurement
PR 148/2015 provides that if the land being procured for a public interest development is less than five hectares:
the project must comply with the prevailing spatial plan;11
a Location Determination is not required;12 and
the value of the land to be acquired by the Agency requiring land will be as determined by a land appraiser.13
Further regulation of land procurement by private entities
PR 148/2015 provides that private entities may acquire land (of any size) by way of purchase, exchange or other means as agreed between the parties (thereby avoiding having to comply with Law 2/2012’s more onerous procurement regime), for the purposes of a very broad range of public interest developments (but excluding any relating to national security).14
PR 148/2015 marks some progress in reforming the process of land procurement for public interest developments. However, it is unlikely that PR 148/2015 will solve age-old problems, given:
the rights of private entities that fund land procurement remain unclear, for example, such entities’ return on investment rights;
there lingers a low public awareness of the need for new public infrastructure projects, which may partly explain continued titleholder resistance; and
6 Article 41 of PR 148/2015.
7 Article 60 of PR 148/2015.
8 Article 60 of PR 71/2012.
9 Article 76(4) of PR 148/2015.
10 Article 76(4) of PR 99/2014.
11 Article 121(2) of PR 148/2015.
12 Article 121(3) of PR 148/2015.
13 Article 121(4) of PR 148/2015.
14 Article 121A of PR 148/2015.
there is a lack of coordination between central and regional governments, which may frustrate compliance with the shortened time frames.
We will continue to monitor PR 148/2015 and will issue further updates on this topic as more information becomes available.
Soemadipradja & Taher
S&T is one of Indonesia’s leading law firms with a recognised market leading energy, resources and infrastructure practice.
If you would like to discuss any aspect of this update, or your land procurement activities or plans, please feel free to contact us.
Ardian Deny Sidharta
Bilma R. Ganie