Indonesia has a lot of commercial land, the use of which hasn’t been decided. This land is the object of speculation, which drives up the price across the board. To tackle this, the Government has established the Indonesia Land Bank Authority, in Indonesian, Badan Bank Tanah.* The Government has provided the Authority with various powers,** including the power to ensure that commercial land is available for particular interests, such as national development. The Authority will manage the land it obtains using the right-to-manage. The Authority also has the power to cooperate with other parties to use its land.

Under the Regulation 113***, the Government has decreed that the Authority has priority as the first purchaser of land from communities. However, the issuance of Regulation 113 is contradicted by the Decision No. 91****, which prohibits the government from issuing derivative regulations from the Job Creation Law until it is amended. Consequently, the implementation of Regulation 113 may be problematic. If you would like a more detailed understanding of this issue, please reach out to your usual contact at our company who will be happy to help.

*Law No. 11/2020 concerning Job Creation.

**Government Regulation No. 64/2021 concerning Indonesia Land Bank Authority.

***Presidential Regulation No. 113/2021 concerning Structure and Operation of Indonesia Land Bank Authority.

****Constitutional Court Decision No. 91/PUU-XVIII/2020 dated 25 November 2021.