Electrical-Infrastructure Development in Forestry Areas: Compensation for Communities

The Ministry of Energy and Mineral Resources(“Ministry”)has issued Regulation No. 33 of 2016 on Technical Settlements for Land, Buildings and/or Plants Owned by Communities Living in Forestry Areas for the Purpose of Accelerating the Development of Electrical Infrastructure(“Regulation 33/2016”).Regulation 33/2016 represents an implementation of Article 36 (5) of Presidential Regulation No. 4 of 2016 on the Acceleration of Electrical-Infrastructure Development(“Regulation 4/2016”), [1] which required further details to be fleshed out regarding procedures for the procurement of land owned by local communitiesin forestry areas for the construction of electrical infrastructure.Community Land OwnershipWith the ultimate goal of electrical-infrastructure development in mind, the State Electricity Company (“PLN”), as well as PLN subsidiary companies and Power-Plant Developers (Pengembang Pembangkit Listrik/”PPL”) are authorized to procure land in forestry areas from the local communities that live there. [2] Such community ownership may be exercised based on land rights (as regulated in Law No. 5 of 1960 on Basic Provisions of Agrarian Principles) or other utilization rights (e.g. utilization of land in order to develop buildings and/or plant crops). [3] Technical SettlementsPrior to the procuring of land located in forestry areas, PLN, a PLN subsidiary or a PPL is required to undertake the following preparatory actions, including: