29 November 2023

The President of the Republic of Indonesia (“President”) recently issued Regulation No. 70 of 2023 titled Land Allocation for Investment, issued and effective as of 16 October 2023 (“PR 70”).

PR 70 introduces an ad hoc task force (“Task Force”) which is authorised by the President via the Indonesian constitution to monitor, among others, land usage and business activities and provide certain recommendations to the relevant line ministries, such as (i) revoking business permits, (ii) revoking land titles, and
(iii) proposed zoning changes.

At this time, PR 70’s primary focus includes the mining, forestry, and plantation sectors and the Task Force will therefore supervise and provide recommendations to the relevant line ministries in relation to land usage and proper business activities.

The relevant ministries will evaluate the Task Force’s recommendations and may decide to revoke land titles or business permits. The concept of revocation of business permits or land titles is not new, as each line ministry’s regulations already provide for these actions.

PR 70 introduces new grounds for the revocation of business permits and land titles which are in addition to those already in place under other regulations. For example, a business permit can be revoked if the business activity does not match the permit held by the business undertaking or if specific periodical reporting was not done. Similarly, a land title can be revoked where land usage
is not in keeping with the land title.

The concept of monitoring and evaluation with potential sanction is not new and is already embedded in each line ministry’s regulations. For example, under the Ministry of Energy and Natural Resources regulation, a mining owner can lose their permits pursuant to violations of the law. Similarly, the Indonesian Land Agency (Badan Pertanahan Nasional) can revoke a land title if and when land usage is not in line with the law.

PR 70 appears to be a conscious effort by the Government to bridge all of the relevant line ministries’ efforts to monitor and supervise land usage and the implementation of business permits.

It is currently unclear which institutions or persons will be appointed to the Task Force. It is also not clear whether the recommendations of the Task Force will be publicly available.