26 November 2010

Indonesia government plans to finalize land reform law by end of year

Jakarta Globe - November 24, 2010

Shirley Christie, Jakarta -- A draft bill to regulate land acquisition for public projects was sent to the president last week and would reach the legislature before the end of the year, the head of the National Land Agency said on Wednesday.

The assurance came during a luncheon hosted by the Jakarta Foreign Correspondents Club, where Joyo Winoto, the head of the agency, also known as the BPN, was a guest speaker.

According to Joyo, the government plans to conduct "peaceful and lawful" agrarian reform to accelerate the country's infrastructure development and correct land ownership imbalances.

Joyo said the reform was key to accelerating economic growth and allowing Indonesia to follow in the footsteps of countries like Japan, India and China, all of which had successfully converted farm land for industrialization while protecting the rights of land owners.

The government is restricted in its ability to redistribute land due to strong public resistance. "We exercise ways to redistribute wealth within society, but every time we talk about land acquisition, everyone is pessimistic," Joyo said.

He said the new Agrarian Law was based on the principles of Pancasila, the state ideology, and existing laws. "Basically, with the Agrarian Law, Articles 1 to 15, the emphasis is on social justice. The rest is how to manage control of land by society," he said.

Joyo added that the law would tread a middle line between socialism and capitalism because it acknowledged private ownership but also involved the community.

He later explained that the market-based agrarian reform strategy, which has been used by the World Bank, would expand the land market by facilitating the transfer of ownership transparently and without force.

Countries such as Zimbabwe have adopted radical reform policies, but Indonesia, he said, did not want to head down that path.

Joyo said the government would determine land use through consensus and ensure sale prices were based on transparent administrative value, also called NJOP, determined by government officials. An independent land appraisal unit would determine land values, he said.

If the price was in dispute, landowners could appeal to a local court, which would have 14 days to decide on the value.

Vital infrastructure projects often grind to a halt due to land acquisition problems, which analysts say discourage potential investors.

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