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Whar Are The Benefits And Challenges: Land Acquisition Process Based On Presidential Regulation No. 71 Year 2012 versus IFC performance Standard 5?

Proceedings Title : Proc. Indon. Petrol. Assoc., 37th Ann. Conv., 2013

The Government of the Republic of Indonesia issued Law No. 2 Year 2012 and Presidential Regulation No. 71 Year 2012 concerning Land Procurement Development for Public Interest. Subsequently, technical guidelines were issued providing certainty to investors that land acquisition for their projects will be completed within 583 days. The regulations are expected to break the deadlock faced by local governments in land acquisition for infrastructure development. Prior to this, land issues in Indonesia have been the source of huge social and economic problems. Several investment projects across the oil and gas sector have been seriously affected by land procurement difficulties. Land acquisition process set forth in Presidential Regulation No. 71 Year 2012 can be outlined as follows: (i) main steps consist of planning, preparation and implementation, (ii) facilitated by state government, (iii) there will be appraisal team for compensation, (iv) public consultation to involve all concerned parties, (v) source of funding is from APBN and or APBD, (vi) entitled party to release the land upon receiving compensation, (vii) process to comply with the national spatial plan and other national, regional, institutional, and strategic plans. IFC Performance Standard 5 recognizes that project-related land acquisition and restrictions on land use can adversely impact communities and persons who utilize the land. IPECA summary of good practices on resettlement matters consists of three aspects: (i) avoid the physical resettlement of Indigenous Peoples, (ii) physical relocation should only be considered after good-faith negotiations after the company has established that there is no feasible alternative to avoid relocation, and (iii) with affected Indigenous Peoples and seek their broad support before considering resettlement. This paper will provide a comparison of the implementation of land acquisition in Indonesia based on new national regulation and international standards and the challenges faced by oil and gas development in Indonesia in harmonizing National Laws and international standards.

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