06
Oct2021

Agrarian Sector Update: the Control of Abandoned Zones and Land

Government Regulation No. 20 of 2021 concerning the Control of Abandoned Zone and Land (“GR 20/2021”) is one of the implementing regulations of Law No. 11 of 2020 concerning Job Creation (“Job Creation Law”), mandated through the provisions of Article 180 of the Job Creation Law.

The land is believed to be one of the sources of people’s welfare when its utilization is carried out optimally. Unfortunately, there are still cases of land abandoned so that it has an impact on the delay in achieving development programs.

Land abandonment must be prevented and put to rest to reduce its negative impact. Thus, the prevention, regulation, and utilization of Abandoned Land is an important step and prerequisite for implementing national development programs, especially in the field of agrarian. Last February, the Government issued GR 20/2021 to provide legal certainty in implementing the control of abandoned zones and land. GR 20/2021 is effective from February 2, 2021.[1]

The important points that need to be considered on the ratification of GR  20/2021 will be discussed as follows:

 

Obligation to Utilize the Zones and Land

Basically, there is an obligation for every Rights Holder or Permit Holders to utilize the land owned or controlled.

Each License/Concession/Business License Holders must exploit, use, and/or utilize the License/Concession/Business License and/or the controlled zones. In addition, there is an obligation to report regularly in connection with the exploit, use, and/or utilization of land for the relevant party.[2]

In addition, every Rights Holder, Rights to Manage, and Grounds for Control over Land is also required to exploit, use, utilize, and/or maintain the land owned or controlled. They also have the obligation to report the exploitation, use, utilization and/or maintenance of land owned or controlled regularly.[3]

GR 20/2021 distinguish the definition of Abandoned Zones and Abandoned Land, as follows:

An Abandoned Zone is defined as a zone that is a non-forest zone, which does have attached to it a Right to Land under a License/Concession/Business License, is deliberately not being exploited, used, or utilized.[4]

Abandoned Land is defined as land under a right, land under a Right to Manage, and land acquired under Grounds for Control over Land, that is deliberately not exploited, not used, not utilized, and/or not preserved.[5]

Does not include “deliberately” elements if:

  1. the land becomes the object of the case in court;
  2. land cannot be exploited, used, utilized, and/or preserved due to changes in spatial plans;
  3. land is declared as land intended for conservation in accordance with the provisions of the laws and regulations; or
  4. land cannot be exploited, not used, not utilized, and/or not preserved because of the state of force majeure, including war, riots, natural disasters, and other disasters, which must be declared by the competent officials / agencies.

 

Objects of Area and Land Abandoned

Land that has been registered or unregistered that is deliberately not exploited, not used, not utilized, and/or not preserved, becomes the object of abandoned land control.[6]

The object of Abandoned Zones Control includes:[7]

  1. mining zone;
  2. plantation zone;
  3. industrial estates;
  4. tourism zone;
  5. large-scale/integrated residential/residential zone; or
  6. other zones which exploits, use, and/or utilize is based on License/Concessions/Business License its related to the use of land and space.

Moreover, the objects of abandoned land control include:[8]

  1. rights, if deliberately not exploited, not used, not utilized, and/or not preserved so it became:
  2. controlled by the community and becomes a rural area;
  3. controlled by the other party continuously for 20 (twenty) years without any legal relationship with the Rights Holder; or
  4. the social function of Land Rights is not fulfilled, both the Rights Holder still exists or no longer exists;
  5. Building Rights, Right of Use, and Right to Manage, if deliberately not exploited, not used, not utilized, and/or not preserved starting from 2 (two) years from the issuance of rights;
  6. the Cultivation Rights Title, if intentionally not a deliberately not exploited, not used, not utilized starting from 2 (two) years from the issuance of the right; and
  7. Grounds for Control over Land, if deliberately not exploited, not used, not utilized, and/or not preserved starting from 2 (two) years from the issuance of the Land Tenure Basis.

Grounds for Control over Land may be the result of:

  1. deed of sale and purchase of certified land rights that have not been renamed;
  2. deed of sale and purchase of customary property rights which have not yet been issued certificates
  3. residence permit
  4. auction minutes
  5. the decision to release forest area; or
  6. other proof of mastery from the authorized official.

To further information, there are Right to Manage land that is excluded from the object of abandoned land control, namely:[9]

  1. land of customary law community management rights; and
  2. land with Management Rights which become Assets of the Land Bank (in Bahasa: Badan Bank Tanah).

 

Legal Consequences of Abandoned Zones and Land

The Determination of Abandoned Zones may determinate as follows:[10]

  1. revocation of License/Concession/Business License; and/or
  2. affirmation as an area controlled directly by the state.

In the event that, the land to be determined as Abandoned Land is in the form of land rights or land with Right to Manages and constitutes the entire expanse, the legal consequences are as follows:[11]

  1. the deletion of Land Rights or Right to Manage;
  2. termination of legal relations; and
  3. affirmation as the state land, former Abandoned Land that is directly controlled by the state.

In the event that the land to be determined as Abandoned Land is in the form of land rights or land with Right to Manage and is part of an expanse, the determination of Abandoned Land has the following legal consequences:[12]

  1. the abolition of Land Rights or Right to Manage in the abandoned part;
  2. the severance of the legal relationship between the Right Holder or Right to Manage Holder and the abandoned land part;
  3. affirmation as the state land, former Abandoned Land that is directly controlled on the part of the abandoned land; and
  4. an orders to revise the Land Rights or Right to Manage.

In the event that the land to be determined as Abandoned Land is a land that has been granted Grounds for Control over Land, the determination of Abandoned Land has the following legal consequences:[13]

  1. termination of the legal relationship between the Grounds for Control over Land Holder and the land controlled; and
  2. affirmation as the state land, former Abandoned Land that is directly controlled by the state.

In the case of land that will be determined as Abandoned Land status as state / regional property or assets of state/regional owned enterprises, the determination of Abandoned Land contains also recommendations to the leadership of agencies that manage state / regional property or assets of state / regional business entities to cultivate, use, utilize, and / or maintain land.[14]

 

 

DISCLAIMER:

Any information contained in this Article is provided for informational purposes only and should not be construed as legal advice on any subject matter.  You should not act or refrain from acting on the basis of any content included in this Legal Update without seeking legal or other professional advice.  This document is copyright protected. No part of this document may be disclosed, distributed, reproduced or transmitted in any form or by any means, including photocopying and recording or stored in a retrieval system of any nature without the prior written consent of SIP Law Firm.

 

[1]  Article 40 GR 20/2021

[2]  Article 2 GR 20/2021

[3] Article 4 GR 20/2021

[4] Article 1 paragraph (1) GR 20/2021

[5] Article 1 paragraph (2) GR 20/2021

[6] Article 5 paragraph (1) GR 20/2021

[7] Article 6 GR 20/2021

[8] Article 7 GR 20/2021

[9] Article 8 GR 20/2021

[10] Article 20 paragraph (2)  GR 20/2021

[11] Article 30 paragraph (1) GR 20/2021

[12] Article 30 paragraph (2) GR 20/2021

[13] Article 30 paragraph (3) GR 20/2021

[14] Article 30 paragraph (4) GR 20/2021

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