Analysis of Land Tenure And Land Registration in Indonesia

 Hendro Prastowo

University of Twente, Faculty of ITC Hengelosestraat 99, Enschede, The Netherlands
Email : hendro24245@itc.nl

I. Land Tenure in Indonesia  

1. Legal Regimes

In early seventeen century to mid nineteen, The Dutch colonize Indonesia and played roles of social, political, economic, culture, including the relationship between people and land. The first basis implementation of the cadastre in Indonesia was on August 18, 1620 when the VOC (Verenigde Oost-Indisch Campagnie: an early Dutch company led to the Dutch colony) pronounced the regulation to control the lands distributed to its employees and resettled inhabitants from the Netherlands. In 1920 the Dutch enforced the agrarian politics and land law in Indonesia based on the Agrarian Law of 1870 and the Dutch Civil Code. The land laws became a dualism between western land law and traditional land laws. In some areas The Dutch applied land law based on the Dutch land law, in other areas also stand various traditional land law (called “adat” land law) scattered among entire country and different from one region to another.

After the proclamation of independence on August 17, 1945 Indonesia has a Constitution that one of its goals is to utilize the land for the prosperity of the people. Based on the Constitution, Indonesia enacted The Basic Agrarian Law of 1960 (BAL) on September 24, 1960 as a National Land Law. According to the BAL, Agrarian Law is Adat - Law as far as it is not in conflict with the National interests. BAL recognizes traditional land law or adat laws and provides the registration of individual rights to land. The main concerns of the establishment of BAL are:

1. Laid the basic foundation of a national land law formulation for justice, prosperity and welfare of the people.
2. Laid the basic foundation to unify and simplify of the land law.
3. Laid the basic foundation to provide land right security for all people.

There are two legal regimes of land tenure exist in Indonesia. The first is the statutory law, base on BAL and its implementing legislation that regulate land tenure system in Indonesia. The second is customary law base on adat law which scattered and various due to the custom of diverse regions. Although BAL as the statutory law recognize adat law as customary law but problems arise when the most of the existing implementing regulations of the BAL failed to elaborate, and are even contradictory, with the adat principles. Customary land law is usually not written down since customary law is unwritten law.

Some general characteristic of customary land is tried to identify in Indonesia. Usually customary land shows a community’s existence and a main part of their social, economic and political life. Presence of customary land is also important to provide a security for its community and their future descendant. Examples of tenure type based on customary law are Ulayat (in West Sumatera), Gogol, Druwe Desa (in Jawa) Desa Pakraman Land Law (in Bali), Totabuan (in Sulawesi) and many others.

2. The Main Land Tenure Types

Referring to Article 16 BAL, there are 8 basic types of land tenure:

1) Hak Milik (right of ownership), is a hereditary right, strongest and fullest right of land. Only Indonesian citizen may have Hak Milik, foreign private ownership in any form.is prohibited.

2) Hak Guna Usaha (right to cultivate), is a right to cultivate state land for agriculture, fishery and livestock purposes. Indonesian citizen and corporation which have been established according to the Indonesian law and seated in Indonesia may have Hak Guna Usaha.

3) Hak Guna Bangunan (right to build), is a right to construct and own buildings on the land which is not one’s property. Indonesian citizen and corporation which have been established according to the Indonesian law and seated in Indonesia may have Hak Guna Bagunan.

4) Hak Pakai (right to use), is a right to use the state land or the private land based on a granting of authorized officer or an agreement. Indonesian citizen, foreigner seated in Indonesia, corporation which have been established according to the Indonesian law and seated in Indonesia and foreign corporation having reorientations in Indonesia may have Hak Pakai.

5) Hak Sewa (right of lease), is a right to use land owned by others for building purposes. Indonesian citizen, foreigner seated in Indonesia, corporation which have been established according to the Indonesian law and seated in Indonesia and foreign corporation having reorientations in Indonesia may have Hak Sewa.

6) Hak Membuka Tanah (right to clear land).

7) Hak Memungut Hasil Hutan (right to harvest forest product).

8) Other temporary rights: Hak Gadai (right to pledge), Hak Usaha Bagi Hasil (right of crop sharing), Hak Menumpang (right of lodging), and Hak Sewa Tanah Pertanian (right to lease of agricultural land).

The implementing legislation on BAL specifies additional land tenure types, there are: 

1) Hak Pengelolaan (right to use state land) is the right of third party which use state land owned by government agencies. The term based on Government Regulation Number 8/1953 on State Land Ownership. This regulation followed up by Ministry of Agraria Decree Number 9/1965 which spilt State Control Right into two kinds of right: Hak Pakai and Hak Pengelolaan. This right becomes specify defined by Ministry of Home Affair Decree Number 5/1973 on Procedures of Granting Land Right. Dissent comes up because this right is not stipulated in BAL but only a policy based on the minister regulation which cause overlapping of authority between agencies.

2) Hak Milik atas Satuan Rumah Susun (condominium law) is the right of ownership of condominium. Act Number 16/1985 defines regulation on construction, management, ownership, mortgage and control of condominium. The detail implementation was stated on Act Number 4/1988 which also defines the types, technical and administrative requirements of condominium.

3) Hak Tanggungan (right of encumbrance) is a guarantee right levied on land rights as reffered to BAL. Act Number 4/1996 regulates the definition, object, subject and procedures on Hak Tanggungan.

4) Hak Wakaf (waqf). According to Government Regulation Number 28/1977, wakaf is legal action of person or legal institution to separate and/or grant the land as a part of their wealth and eternally institutionalize for religious purpose or other general purpose according to Islam. Act Number 41/2004 on Wakaf also clarifies the land right as a wakaf object and can be granted Hak Wakaf in accordance with Government Regulation Number 28/1977.

3. Special Constitutional/Legal Protection

The environment is the main source of human life. In the environment there is material covering the basic rights of human, environmental justice and equal access to sources of life. BAL also provides recognition of the rights of the people to utilize the environment such as the right to clear land and the right to harvest forest product (article 46) and the right to take water (article 47).

Based the right of managing environment stated on BAL, Indonesia enacted Act Number 23/1997 on Environment Management. Article 5 this legislation ensure legal protection on rights to each community to manage the environment, i.e.:
1) Every person has an equal right to a good and healthy environment.
2) Every person has the right to environmental information.
3) Every person has the right to participate in the environmental management.

4. The Main Threats to Tenure Security 

Although Indonesia has set a BAL since 1960 to ensure land tenure security, but until today there are estimated thousands of land disputes that means not fully guarantee land tenure security. These threats will cause negative effects in law and economics.

Hak Milik (HM) is the strongest and fullest right of land in Indonesia; in fact the land dispute that occurred in Indonesia is mostly in HM. To obtain HM, the regulation allows various types of formal evidence for registration of new rights or conversion of the old rights, e.g. deed for the new right and written evidence, witness testimonies or statements for the old right conversion. The number of land based on customary rights led to the use of old evidences (colonial rights, the right before BAL) and letters of testimony based on the local community. Therefore many people who deliberately falsified the evidence or make a false statement to obtain HM. Base on Article 32 Government Regulation 24/1997, within 5 years period after a certificate issued, person who has strong evidence can propose claim to the current certificate, thus make contradictory with the principal of certificate as the strongest and fullest right evidence.

Hak Guna Usaha (HGU), especially for large-scale plantations has positive impact in investment and local communities’ economic development. Government Regulation Number 40/1996 set of HGU based on BAL. But in practice there is overlap with other regulations such as the Mining Act and the Forestry Law. HGU already given can become dispute when the other law also gives rights of mining or forestry in the same place.

Hak Guna Bangunan (HGB) could be imposed on state land, state land with Hak Pengelolaan (HPL) and ownership land (HM). Problems arise when the HGU was founded on the land with HPL. Presently HPL is still in debate because there is not stated certainly in the BAL and cause a broad interpretation of state agency authority holding HPL in the case to grant another right such as HGB to the third parties. Another thing is the HGB has a 30-year period, while HPL is only 20-year term or for as long as needed, this creates uncertainty when HPL ended earlier than HGB.

Hak Pakai (HP) is one of the basic types of land tenure stated in the BAL. Nowadays in case of state land, HP become confused with HPL. State land granted HP in principle can not be burdened with other rights, but at the moment are categorized into HPL then its may be burdened by other rights such as the HGB, these inconsistencies can cause disputes later on.

Other rights such as Hak Sewa, Hak Membuka Tanah and Hak Memungut Hasil Hutan received less attention because the existing land registration regulations only consider ownership rights and contain almost no provision for registering intermittent rights.

Customary tenures are still not fully incorporated in the system of national land laws. There is misunderstanding and misperception of the adat land law theory persists until the present time. This is important to clarify and specify the object and the subject of registering land title on customary land. Indonesia consists of many customary regions, each with different land tenure system. Diverse special rules of customary land in each region are also an obstacle because of contradict with national land laws. Many of customary lands are occupied for private, public or commercial interests with boarded formal right thus call up dispute with customary communities.

II. Land Registration in Indonesia  

1. Land Registration System

Article 19 BAL stated that to ensure legal certainty of land tenure, government conduct land registration according to provision laid down by Government Regulation. Land registration according to BAL consists of:
a) survey, mapping and bookkeeping;  
b) land right registration and land right transfer;  
c) issuing land title as the strong evidence.
 

As the implementation of land registration based on BAL, governments of Indonesia stipulated the early regulation on Government Regulation Number 10/1961 followed by Government Decree Number 24/1997 on Land Registration. Article 3 Government Decree Number 24/1997 stated that land registration aims is to provide legal certainty and legal protection for land rights holders, to provide land information in the national scope and conduct national land administration. For the first aims, government issues certificate as the strong evidence.

The Indonesian system of registration is a negative system means there are not guaranteed by the state. The purpose of the negative system is to protect the real owner from the risk of registration of the wrong one. The ownership can be sued through court proceedings as long as there are other evidences; the new ownership is registered according to the court decision

Indonesia recognizes formal and informal system for land registration. Formal registration system is based on Government Decree Number 24/1997 and Minister of Agrarian Number 3/1997. Land registration consists of first registration and data maintenance and updating. The first registration applies to land that have not been registered based on the existing regulations. Activities on the first registration are physical data acquisition and processing, evidentiary and bookkeeping, issuing certificate, provision of physical data and juridical data, documentation all of the registers. Data maintenance and updating (also called derivative registration) registers the change of physical data and juridical data due to all kinds of land transactions. Activities on data maintenance and updating are registration of right transfer and right encumbrance such as buying and selling, subdivision, exchange, grant, inheritance and mortgage.

First time registration carried out through systematic and sporadic registration. Systematic registration is a mass land registration done simultaneously on a whole unregistered object within a certain unit area; in Indonesia the smallest unit area is village or part of the village. Systematic land registration is based on work plan, by government program or community initiations. Sporadic registration is the registration of one or some unregistered object individually or mass in certain unit areas which are not covered by systematic registration. Sporadic land registration is conducted by request of interested parties. Data maintenance and updating registration carried out through sporadic system only, thus there is no systematic registration for land right transfer purposes.  

The formal land registration system in Indonesia applies fix boundary principles. Article 14 Government Decree Number 24/1997 stated that physical data collection should be in the form of survey and mapping activities include boundary survey. The land owner must put physical marks on the boundaries, show it on the boundary survey and responsible for its maintenance; the surveyor only records it as legal data. Even the regulation also describes the specification of the boundary markers.  

Informal registration in Indonesia occurred in customary lands or remote areas that have not reached a formal registration system. This registration system can be a recording for buying and selling, grant or inheritance under local customary law. This system is private conveyance base on the agreement of both parties and witnessed by one or two persons in front of the customary leader. They consider these transactions more quickly and more easily without having to involve the formal registration which is considered complicated. Transactions were recorded as ‘deed’ and may considered as informal evidences but not illegal in the court.
 

2. Fiscal Cadastre

While BPN conducts land registration as legal cadastre, The Directorate of Land and Building Taxation (PBB) under The Ministry of Finance conduct fiscal cadastre for taxation purposes. The Act Number 12/1994 which is the amendment of Act Number 12/1985 regulates the implementation of fiscal cadastre. PBB also make a map parcels for collecting taxes object data consists of entire parcels in Indonesia with excluding certain parcels stated on The Act Number 12/1994. PBB holds around 85 millions land parcels database for taxation purposes, whereas BPN maintains 40 millions land parcels databases among them for certificate of land titles. However, this map does not meet the accuracy standards for BPN legal cadastre, thus there are duplication data between legal cadastre and fiscal cadastre. One relationship between fiscal cadastre and legal cadastre is that tax invoice considered as the administrative requirements of land registration.
 

3. Parties on Land Registration Activity

Based on Article 5 Government Decree Number 24/1997, land registration conducts by National Land Agency (BPN). Authority of the implementation of land registration is delegated to Local Office. Minister-level official appoints Pejabat Pembuat Akta Tanah (PPAT) or Land Deed Official who making deeds as the evidence of legal land transactions for land registration purposes. For the rural especially remote areas government appoint temporary PPAT, usually the Head of Sub-district. In the physical data collection (survey and mapping), in addition to government surveyors within BPN, a licensed surveyor and survey and mapping companies can also perform this activity.  

On systematic registration base on government program, Minister-level official appoints adjudication committee and the adjudication team, on systematic registration base on community initiations; Head of Regional Office takes the authority. The adjudication committee and the adjudication team assist the Local Head Office in order to implement systematic land registration. This committee also involves Head of Local Village as committee member. Physical data collection have a very large capacity, therefore the mapping companies can also perform this activity to accelerate the survey and mapping part. Systematic registration also consider community participation; local community, head of village, elder people get involved in the parcel identification.  

Some systematic registration programs start to involve local Non Government Organization (NGO) for counseling and monitoring the program. Land Management and Policy Development Program (LMPDP, 2004-2009) and Reconstruction of Aceh Land Administration System (RALAS, 2006-2008) requires the involvement of NGOs in socialization and counseling activities. Some professional organizations or Associations that are involved directly or indirectly in the land administration are:

1. Association of Indonesia Surveyors (ISI);
2. Association of Land Deeds Officials (IPPAT, ASPATI, and ASPATI Indonesia);
3. Association of Indonesia Cadastral Surveyors (ISKI);
4. Association of Indonesian Survey and Mapping Company (APSPI).

4. Implementation  
Indonesia consists of millions of parcels (exclude the forest area) with topographic, social and economic conditions are not uniform. The implementation of land registration in Indonesia should include all of those parcels are without exception within the shortest possible time. In case of formal registration, government conducts two approaches to implement a comprehensive first time land registration; those are systematic and sporadic land registrations. Both approaches run in parallel with a systematic approach become the prioritizing. Systematic registration provide a significant contribution both to the number of issued land title and its legal assurance while sporadic registration is highly dependent on the awareness and economic levels of society.  

Awareness of the importance of land registration and the low income of the people contribute to the slow process of land registration. Society was passive and not interested to register their land because they do not know the advantages. Because of sporadic system gives a little contribution in the first time registration, the government also conducts a systematic approach which is more mass, comprehensive and involves the counseling than in sporadic approach which is partial, haphazard and unpredictable. For the government, the result of systematic land registration provides the complete land information whereas for people, the process of registration is very simple and not time consuming.

Theoretically, the systematic land registration will produce a huge number of title means accelerate land titling process. Systematic land registration projects in Indonesia such as Land Administration Project (LAP, 1994-2003), LMPDP and RALAS face some problems and not fully satisfying due to: 

1. Lack of community awareness, they do not participate actively, even after adjudication committee issues land title they do not willing to take the product.
2. Because the principle of the systematic registration in some cases is considered as “the project”, means only concerns to the target of number of land title (quantity) by ignoring the legality aspect.
3. Data maintenance and data updating after the completion of the project is not a continuous attention, terms: “end project-end work”
4. The systematic registration for poor people is not fully free, there are some costs such tax on the acquisition of land right (BPHTB), local tax and illegal surcharge.

Most of the people such as the indigenous, the poor and the villagers are not familiar with the benefit of certificate as legal evidence to prove their ownership of land and use it for collateral in the bank. This situation create an informal land transaction and registration which the law that covers the transaction is not state law and its procedure, only based more to the oral personal trust rather than to the written official document. As a result, in certain communities they develop their own mode of land transaction by quick and simple conveyance. In relation to land registration system feature, informal customary conveyance could not maintain registry records in a long term such as it is provided by the formal land tenure system.

BAL as the basic of formal land tenure system of Indonesia aims for eliminating land tenure dualism in Indonesia by employing customary law as its main principle. The statement in Article 5 of BAL empowers the customary law as the basic of land tenure system, the fact is that Indonesia has many customary land tenure systems make difficulty to create a unified land tenure system, it affirms that there could be applied another land tenure system besides formal land tenure system restrained by BAL in particular area. BAL is adopted from the colonial system, however many implementing laws and regulations of land registration system of in Indonesia are formulated based on the basic principles of the previous colonial civil law on agrarian policy, property market and land administration system. A study on land law and regulation found 538 legal documents causes complexity and confusion in the legal framework.

The challenge that emerged was that most land especially outside Java is the basis of customary land by customary law which can not be registered as formal rules. Community of those areas might not rely too much to the government endorsement and legitimating for the transactions among them, within the members of a customary community. Some rules on the customary law conflict with national law, this creates the negative impact when they have to deal with other institutions outside their customary groups like banks, plantation company, investor and potential buyers then they will need acceptable national legal evidence, certificate of land titles.  

5. Current Situation

Since Indonesia implements land registration, the number of certificate issued is the main tool to measure land registration progress. The problem is the certificate issued calculation never separates between the number of certificate issued by the first time registration and the certificate issued by the derivative registration. According the current data, up to 2008 there is 40,763,342 land parcels registered (both of first time registration and right transfer registration). It is about 47 % of the total estimated land parcels in Indonesia (estimated 85 million by PBB). The programs and number certificates of the land titling are as follows:

The current status at the end of 2008 has been registered and issued a number of 13,151,816 land parcels/certificate of land titles. In 2007 government establish Agrarian Reform, its target 3 million certificates issued per year, means less than 20 year to complete land registration in Indonesia. According to the current realization in 2007 and 2008, the production of the cadastre was about 3.25 millions land parcels or certificate of land titles per year, higher than the government target. With the capacity of current system, it will need approximately 14 years to register all the land parcels in Indonesia.

6. References

• Achmad, C.B., 2004, Building Physical Cadastre: A New Approach for Speeding-up the Land Registration Processes in Indonesia, 3rd FIG Regional Conference, Jakarta, Indonesia, October 3-7, 2004 TS 10.
• Anzhari, R., 2007, the Indonesian Land Administration System. http://www.oicrf.org (last accessed, February 18, 2010)
• Grant, C., Heryani, E., 2004, Land Administration in Indonesia, 3rd FIG Regional Conference, Jakarta, Indonesia, October 3-7, 2004 PS4.3.
• Soesangoebeng, H.,2004, The Possibility and Mode of Registering Adat Title on Land, 3rd FIG Regional Conference, Jakarta, Indonesia, October 3-7, 2004 TS1.4.