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Agrarian Consortium blasts Jokowi's leeway for investors in new capital

Tempo - March 14, 2023

Fajar Pebrianto, Jakarta – The Agrarian Reform Consortium (KPA) Secretary General Dewi Kartika on Tuesday stated that Government Regulation (PP) No 12/2023 which had just been ratified by President Joko "Jokowi" Widodo or Jokowi is a violation against the Basic Agrarian Law and the Constitutional Court ruling.

Through this PP, the President grants potential investors with Cultivation Rights concessions (HGU) for up to 190 years, as well as Building-Use Rights (HGB) and Usage Rights (HP) for up to 160 years in the New Capital City of Nusantara (IKN).

"This policy violates the Constitution and is contrary to the agrarian reform," said Dewi in a written statement on March 14.

What is contained in Government Regulation 12

PP 12 regulates the granting of business licensing, ease of doing business, and investment facilities for business actors in the New Capital.

It specifically contains as followers: "It is necessary to provide special policies for granting business licenses, ease of doing business, and investment facilities to business actors who make investments and economic activities and/or finance the development and development of the Capital City of Nusantara and/or partnering regions."

Article 17 states that land allocated by the New Capital Authority to business actors can be granted Land Rights (HAT) in the form of HGU, HGB, and Usage Rights. This also oversees guaranteed certain time periods.

Meanwhile, Article 18 stipulates that the HGU over the HPL of the New Capital Authority is given for a maximum of 95 years during its first cycle.

Referring to this PP, HGU is the right to cultivate land directly controlled by the state, for agricultural, fishing, or animal husbandry companies. The stages are:

  • Granting of rights, a maximum of 35 years
  • extension of rights, a maximum of 25 years
  • Renewal of rights, a maximum of 35 years

The HGU granted for the first cycle with a maximum period of 95 years is stated in the decision to grant the rights and recorded in the HGU certificate. Extension and renewal of HGU are granted simultaneously after 5 years of effective use and/or utilization of the HGU in accordance with the purpose of granting the rights.

Within 10 years before the end of the HGU's first cycle, businesses can apply for the return of HGU for a second cycle with a maximum period of 95 years in accordance with the land use agreement.

What Dewi considers dangerous is the aspect of revoking rights is not regulated in PP 12 at all. She asserted that with the magnitude of the concession period – nearly two centuries – sanctions must be stated clearly and firmly.

The Basic Agrarian Law said Dewi, clearly oversees the granting of rights, which must be carried out in stages and under strict conditions.

According to the Basic Agrarian Law, an HGU is granted for a maximum period of 25 years. Companies that require a longer period of time can be granted HGU for a maximum of 35 years. HGU can be extended for a maximum of 25 years. The Basic Agrarian Law has also regulated a maximum period of 30 years for HGB with a maximum extension of 20 years.

"Basic Agrarian Law has also stipulated that the extension of rights can only be done as long as the owner of the right still fulfills the requirements according to the provisions of the Basic Agrarian Law," said Dewi.

Jokowi's reason

New Capital City of Nusantara Deputy Head Authority Dhonny Rahajoe elaborated that the reason behind the 190-year HGU and 160-year HGB is to help state-controlled land compete with land areas – with the status of freehold rights – that are spread outside the area of this prospective capital city.

"If the authorities are not made to compete with those around them, the IKN will be barren," he said after a meeting with Jokowi at the State Palace, Jakarta, Wednesday, March 8.

Source: https://en.tempo.co/read/1702374/agrarian-consortium-blasts-jokowis-leeway-for-investors-in-new-capita