Indonesia Vulnerable to Land Disputes as Few Plantation Estate is Registered
The plantation sector of Indonesia is vulnerable to land disputes. Noor Marzuki, a Director at the National Land Agency (Badan Pertanahan Nasional, or BPN), a non-departmental government institution, said that currently only 30 percent of Indonesia's total plantation estate area has been registered at the BPN. This implies that 70 percent of Indonesian plantation estates are unregistered and thus susceptible to land conflicts. The total size of Indonesia's plantation estate area is 120 million hectares.
Marzuki stated that it is important to have more land registered at the BPN as it will enhance legal certainty in Southeast Asia's largest economy, adding that land owned by Indonesian state-owned enterprises (SOEs) and private Indonesian individuals are more vulnerable to land disputes than land under the control of foreign firms as permits and regulations are much stricter when a foreign company wants to own land.
Land disputes are also unfair to workers of the SOEs or privately-held plantations as they sometimes become victim or otherwise involved in violent attacks by local communities who claim that their land has been taken 'unlawfully'.
Of Indonesia's total 120 ha of plantation estates, only 1 percent (approximately 1.2 million ha) is owned by the government through 15 SOEs (which are particularly focused on the production of palm oil, rubber, coffee, tea and sugar cane).
Land disputes are also one of the most problematic issues that block development of Indonesia's infrastructure and thus form a bottleneck to general economic growth as Indonesia is characterized by a lack of quantity and quality of infrastructure. This results in high logistics costs thereby curbing competitiveness of Indonesian products on the international market. Many infrastructure projects are delayed or canceled altogether due to land acquisition difficulties. Although Indonesia introduced a new law in 2012 (Land Acquisition Law - UU No. 2/2012), which aims to speed up land dispute settlements, it has not been used yet.