Down to Earth No. 76-77 May 2008

Another year spent waiting

A year after we reported on Indonesian government plans to launch agrarian reform based on the Basic Agrarian Law 1960 (BAL), the regulation on how the reform will be implemented remains a draft. The non-action reflects the fate of the BAL itself. This law, championed mainly by peasants and nationalist groups, has been dormant since its birth. It was undermined by a series of sectoral laws passed by Suharto's New Order regime, aimed at exploitating land and natural resources and which welcome foreign investment.

With no finalised regulation, the expectation that Indonesia will see pro-poor agrarian reform anytime soon now looks rather optimistic.

However, more signs of activity are evident in the government's Work Plan for 2008. Under the heading of work related to 'pushing ahead with pro-poor development', the National Planning Agency (Bappenas) has set a target for the National Land Agency (BPN), among others, to issue one million land certificates in 2008. Further on in the workplan, under the heading 'agrarian reform', BPN is assigned to:

deal with issues related tenure, ownership, use and utilisation of land (known in administrative jargon as 'P4T') for a total of 10,000 parcels of land; the redistribution of 300,000 land parcels and the inventory of P4T in 2,000 villages (desa/kelurahan);
confirm and, where necessary, formalise, the ownership of land in 380 districts/municipalities;
investigate and tackle 2,600 land dispute and conflict cases in the above districts/municipalities.

The national plan also notes that BPN is to improve its public service by setting a target to issue 2.34 million land certificates in 2008. Lastly, BPN is also supposed to support small and medium enterprises (SMEs) with a target of issuing land certificates for 30,000 businesses. The indicative budget allocated for all these activities is around 1.4 billion rupiah (roughly US$147 million). From a brief look at the national plans and at BPN's plans, it is evident that much of the planned work is preparation for some kind of agrarian reform. The preparations include BPN's idea to conduct a comparative study on how other countries carry out agrarian reform.

Foreign investment focus

While carrying civil society expectations of socially just and pro-poor agrarian reform, Indonesia's land initiatives are also being pulled in another direction: one that requires that Indonesia's land law should comply with international expectations, or, in other words, the interests of (foreign) investment.

A new Asian Development Bank (ADB) Technical Assistance initiative entitled 'Republic of Indonesia: Enhancing the Legal and Administrative Framework for Land Project' - offering a grant of US$500,000 - confirms this. The project will run over 18 months, with the tentative start date May 2008. The 'technical assistance' is for drafting a new Indonesian land law which complies with international standards. It states that the proposed land law would support the provisions of the BAL, which would remain the umbrella law. The ADB's main concerns underlying the proposed land law are: “(i) the lack of updated legal framework guaranteeing equitable and rapid involuntary resettlement (IR), (ii) absence of comprehensive IR implementing regulations, and (iii) inadequate capacity for IR tasks.” These points were raised by government ministers during the 2005 infrastructure summit in Jakarta as the causes of delays in project implementation and disbursement.

Unfortunately, the history of foreign investments in Indonesia and, in particular, those directed at natural resources exploitation and access to land, has had little relation to the terms 'just' and 'pro-poor'. This fact has alerted the pro-poor agrarian reform pressure groups to the likelihood that BPN's agreement with the ADB will further confirm the inclination towards market-led agrarian reform. In which case, land redistribution as part of agrarian reform will not mean distribution of power but will merely consist of state-sanctioned capitalist real-estate transactions.

(Sources: Bappenas, 2008, Government Work Plans in 2008; Republic of Indonesia: Enhancing the Legal and Administrative Framework for Land Project, Project Number 37304, December 2007 at http://www.adb.org/documents/TARs/INO/37304-INO-TAR.pdf; BPN Strategic Plans 2007-2009, SPI website: http://www.spi.or.id/?p=129, KPA website:http://kpa.or.id/index.php?option=com_content&task=view&id=163&Itemid=53)

For news on a constitutional court decision to revoke investors' right to cultivate land for up to 95 years, see article on Indonesia's agrofuels.

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