Publications

Land issues in Indonesia have major social and economic implications. Several investment projects across sectors, especially for oil and gas (O&G), are seriously affected by land acquisition difficulties. The House of Representatives (DPR) passed a Law on Land Provision for the Development for Public Interest on Friday, December 16, 2011. The Law is not a novel policy, but in the form of Law, it provides better legal certainty compared to the previous Presidential Regulation stipulating a similar matter. The law covers infrastructure projects such as roads, dams, tunnels, railways, ports and airports, oil, gas and geothermal facilities, power plants and their distribution networks, hospitals and telecom networks. Though it is limited to government projects, it allows government to partner with state-owned firms and the private sector. IFC Performance Standard No. 5 recognizes that project-related land acquisition and restrictions on land use can have adverse impacts on communities and persons that use this land. The IPECA summary of good practices on resettlement matters consists of three principles: (i) avoid the physical resettlement of Indigenous Peoples, (ii) physical relocation should only be considered after the company has established that there is no feasible alternative to avoid relocation, and (iii) enter into good faith negotiations with affected Indigenous Peoples and seek their broad support before considering resettlement. This study attempts to: provide an assessment of the state of implementation of land acquisition in Indonesia, outline some important issues and challenges in O&G development in Indonesia, and offer framework recommendations to address those issues and challenges which will harmonize National Laws and International good practices.