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Jakarta Post

Plantation, property firms oppose land bill over expansion plans

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Wed, February 26, 2014   /  12:03 pm

While infrastructure firms welcome the deliberation of a land bill, which, if passed, will help speed up the land acquisition process, property and plantation stakeholders are worried the bill will confine their expansion.

The House of Representatives Commission II, which oversees agrarian affairs, is currently accelerating the bill'€™s deliberation so that it is passed before the House'€™s current term ends in October.

Under the bill, companies would not be allowed to have concessions of more than 100,000 hectares under the so-called licensing of rights to cultivate land (HGU) and 200 hectares of land under the right-to-build (HGB) license.

The HGU is aimed at plantation and farming businesses while the HGB is more for the hotel, industry and housing sectors.

'€œIf the bill is passed, it will halt the development of the property sector. For a housing project, for example, we usually prepare land for five-year needs. It will be difficult if we are constrained by the capping of concessions,'€ said property tycoon Ciputra on Monday.

Ciputra'€™s unit PT Ciputra Residence, a subsidiary of Ciputra Development, announced that it planned to acquire more than 4,000 hectares for its 14 on-going and future
projects across the country.

'€œIt'€™s not wise to limit firms'€™ expansion projects. Let us only be limited by the market,'€ Ciputra said.

The Indonesian Palm Oil Producers Association (Gapki), a powerful lobby group for 591 plantation companies, made the assessment that the bill could force companies to invest overseas, in countries without land capping policy.

'€œLarge firms, such as Wilmar International Ltd., PT Sinar Mas Agro Resources and Technology and PT Bakrie Sumatera Plantations, have instead planned to expand business to Africa, Myanmar and Vietnam,'€ said Gapki secretary-general Joko Supriyono.

Joko also questioned a stipulation in the bill that required a recommendation from indigenous people living in the planned plantation concessions.

'€œIt is not clear who the indigenous people are. What the government needs to see is that our business also provides a myriad of opportunities for locals,'€ he said.

'€œSo far we have provided 20 percent of our land for plasma farmers, it is already a win-win solution for both plantation firms and local farmers,'€ he said.

House Commission II member Budiman Sudjatmiko said that the capping was necessary to help prevent unjust land distribution.

'€œThis bill is a breakthrough as it would end land conflicts, which are mostly caused by unjust land distribution.'€

Budiman quoted data from the National Land Agency (BPN) showing around 56 percent of national assets '€” 80 percent of which was land '€” was controlled by only 0.2 percent of the population. (koi)


Selected points in the bill

- Companies wanting HGU permits need written approval from the area'€™s indigenous people

- State will determine minimum and maximum land ownership limitations

For plantations: An individual or a company may acquire a maximum of 100,000 hectares of land nationwide

For plantations: an individual or a company may acquire a maximum of 10,000 hectares of land at the provincial level

For farming: An individual or a company may acquire a maximum of 50,000 hectares of land

For housing: An individual or a company may acquire a maximum of 200 hectares of land for a housing complex

For hospitality: An individual or a company may acquire a maximum of 100 hectares of land for a hotel complex

For industry: An individual or a company may acquire a maximum of 200 hectares of land for an industrial complex

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