Proposed Land Amnesty under the Draft Bill on Agrarian Reform

Commission II of Indonesia’s House of Representatives (“DPR RI”) has proposed incorporating a land amnesty or land pardon approach into the Draft Bill on Agrarian Reform (“Draft Bill on Agrarian Reform”). The Chair of Commission II of DPR RI, Muhammad Rifqinizamy Karsayuda, considers this approach to be a potential alternative to criminal enforcement in the land sector.

“We propose two approaches to law enforcement in the land sector. The first is the conventional approach, through investigation and criminal inquiry, as well as through fines and land amnesty,” he said.

Rather than immediately pursuing a criminal law enforcement approach, Rifqinizamy said that the Government could offer a fine mechanism to business operators that utilize land beyond the area covered by the granted Right to Cultivate (“HGU”). The amount of the fine would be calculated based on the state losses arising from unpaid Non-Tax State Revenue (“PNBP”).

He gave the example of a company that had been cultivating the land for 10 years. The state losses resulting from unpaid PNBP over that period would be calculated by the Audit Board of the Republic of Indonesia (“BPK”) or the Financial and Development Supervisory Agency (“BPKP”). The Government could then apply a land amnesty approach without having to immediately reclaim all of the land that had been under the company’s management.

“Land amnesty first is fine, because if we were to collect the full amount of PNBP, they might object. They should pay Rp5 billion, but we collect Rp1 billion first. After that, the National Land Agency (BPN) would issue the HGU for the area they have cultivated, and starting the following month, the PNBP could be paid in full,” he said.

Rifqinizamy considers that implementing this approach would enable the State to optimize PNBP revenue from land that has already been cultivated, while also providing legal certainty more quickly and efficiently than conventional law enforcement processes.