Job Creation Law Update: Land Rights

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The basic principle of Indonesian land/agrarian law regime (ie. Law No. 5 of 1960 on Basic Agrarian Law), has remained unchanged since its enactment in 1960. Driven by the various developments in the agrarian sector that have taken place since then, the Government of the Republic of Indonesia introduced changes to the Indonesian land/agrarian law regime through the enactment of Law No. 11 of 2020 on Job Creation (“Job Creation Law”), and the Government Regulation No. 18 of 2021 on Land Management Rights, Land Titles, Apartment Units, and Land Registration (the “Regulation”).
  
The Regulation has been enacted on 2 February 2021 and covers some interesting developments which include the extension of the maximum term of Rights to Utilise (Hak Pakai - “HP”) for certain categories of land to comprise 80 years from previously 70 years; the granting of priority to an existing holder of Rights To Cultivate (Hak Guna Usaha - “HGU”), Right to Build (Hak Guna Bangunan - “HGB”) or HP to obtain a new land title over the same plot of land upon expiry of the existing title; the granting of rights to foreigners to own an apartment unit and landed property on certain categories of land; introduction to HGB, HP and Land Management Rights (Hak Pengelolaan Lahan - “HPL”) for the space above and below land; and electronic land registration.
  
Some new developments under the Regulation, however, appears to be either conflicting with the existing regulation or conceptually difficult to be understood and/or implemented. For instance, the concept of granting an independent HGB, HP and HPL over the space above and below a plot of land to a party other than the holder of the land title itself might be challenging to be implemented, as it would need to involve many parties including, among others, holder of the (surface) land title.  
  
In light of the above, despite offering interesting developments on Indonesian land/agrarian law regime, it remains to be seen whether those developments can be fully and seamlessly implemented in practice.

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