A common misconception often arises when discussing land acquisition in Indonesia: the belief that the Job Creation Law has replaced the previous legal framework governing land acquisition. This assumption is incorrect, and misunderstanding it can have practical consequences, for example, when a government agency prepares planning documents based on the wrong legal foundation.
The reality is both simpler and more important to understand. Law No. 2 of 2012 remains the primary legal basis for land acquisition for development in the public interest. The Job Creation Law did not repeal it; rather, it amended and refined several of its provisions. This article explains the overall regulatory framework, outlines the principal amendments, and focuses on one change that has had a direct impact on day-to-day practice: the expansion of the parties that must be involved in public consultations.
Law No. 2 of 2012 as the Primary Legal Basis
The full title of the legislatDasar Hukum Pengadaan Tanah untuk Kepentingan Umum: UU No. 2 Tahun 2012 dan Penyempurnaannya lewat UU Cipta Kerjaion is Law No. 2 of 2012 concerning Land Acquisition for Development in the Public Interest. This law governs how the State acquires land for public purposes, covering every stage of the process—from planning and preparation to implementation and the transfer of results. It serves as the principal legal foundation for land acquisition while providing the framework for the State's authority to regulate, formulate policies, and oversee the implementation of land acquisition.
One point should be emphasized from the outset: this law remains fully in force. Although it was enacted long before the Job Creation Law, it continues to serve as the legal foundation for land acquisition. Therefore, when discussing amendments introduced by the Job Creation Law, we are referring to revisions built upon this existing legal framework rather than an entirely new legal regime that replaces it.
How the Job Creation Law Amends Rather Than Replaces the Existing Law
The legislative journey of the Job Creation Law has been complex, and understanding that journey helps place these amendments in their proper context. It began with Law No. 11 of 2020 on Job Creation, which subsequently underwent an extensive constitutional and legislative process before being permanently enacted through Law No. 6 of 2023 concerning the Enactment of Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation into Law. After being approved by the House of Representatives (DPR) on 21 March 2023, Law No. 6 of 2023 was promulgated on 31 March 2023 and came into force on the same date.
The Job Creation Law is an omnibus law, meaning that it amends numerous laws simultaneously, including Law No. 2 of 2012. However, its effect is limited to revising specific provisions rather than repealing the law in its entirety. For this reason, both laws must be read together as an integrated legal framework rather than as alternative legal bases.
At the implementation level, two Government Regulations are particularly important. Government Regulation No. 19 of 2021 governs the administration of land acquisition for development in the public interest, while Government Regulation No. 18 of 2021 regulates the Right to Manage (Hak Pengelolaan), land rights, and land registration. These implementing regulations translate the statutory provisions into the technical procedures applied in practice.
During a Hukumonline webinar held in June 2021, Yagus Suyadi, then Head of the Legal Bureau of the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN), identified at least four provisions of Law No. 2 of 2012 that were amended through the Job Creation Law. His overview provides a useful policy-level summary for understanding the direction of these reforms, and those four areas form the framework for the discussion that follows. For the precise legal provisions, however, the statutory text and its implementing regulations remain the authoritative references.
Four Key Amendments
Before examining each amendment in greater detail, it is helpful to begin with an overview of the four principal changes introduced through the Job Creation Law.
First, the provisions governing public consultation under Article 19 were amended to broaden the categories of participants who must be involved. This is the primary focus of this article and will be discussed separately in the following section.
Second, a new provision was introduced allowing land acquisition for development in the public interest involving an area of no more than five hectares to be carried out directly by the agency requiring the land together with the entitled party, with the location determination requiring only the approval of the regent or mayor.
Third, Article 8 was amended so that the legal status of certain categories of land changes upon the issuance of the location determination. These categories include land within forest areas, village treasury land, waqf land, and land constituting assets of the central government, regional governments, state-owned enterprises (BUMN), or regionally owned enterprises (BUMD).
Fourth, the validity period of the Location Determination stipulated under Article 24 was extended, providing additional time for the implementation of the land acquisition process.
Focus: Expansion of Public Consultation Participants
Among the four amendments discussed above, the changes relating to public consultation have arguably had the greatest practical impact. To understand their significance, it is useful to begin with several key legal concepts.
An entitled party refers to any person or entity whose land is subject to acquisition under a proposed development project. In simple terms, these are the owners or holders of land rights over property that will be acquired for development in the public interest. It is important to note that, even under the original version of Law No. 2 of 2012, public consultation already involved communities affected by the proposed development and was not limited solely to landowners.
The key amendment introduced by the Job Creation Law lies here: approval of the proposed development location must now also be obtained from the administrators and users of State-Owned Assets (Barang Milik Negara/BMN) and Regional Government Assets (Barang Milik Daerah/BMD). This requirement includes parties holding a Right to Manage (Hak Pengelolaan) over state land, whether they are ministries, government agencies, or regional governments.
Why is this addition significant? In practice, many project sites are situated on state land or land subject to a Right to Manage rather than privately owned land. Under Indonesia's land law framework, the Right to Manage is understood as a form of the State's right of control over land, part of whose implementation authority is delegated to the holder of that right, such as a government institution. Consider, for example, a road construction project crossing a parcel of state land under a Right to Manage held by a state-owned enterprise (BUMN). If the public consultation process were limited to inviting only private landowners, the BUMN exercising control and use over that land could be excluded from the decision-making process. The amendment closes this regulatory gap.
Accordingly, following these amendments, public consultation participants now comprise four groups: entitled parties; administrators of BMN/BMD; users of BMN/BMD; and communities affected by the proposed development. Public consultations are conducted either at the proposed project location or at another mutually agreed venue.
There is also an important procedural rule for implementing agencies. If an entitled party or an administrator or user of BMN/BMD has been duly invited to attend the public consultation on three separate occasions but fails to appear, that party is deemed to have agreed to the proposed development location. Once consensus has been reached, the outcome is documented in an official record of agreement, which serves as the basis for the subsequent stages of the land acquisition process.
Other Notable Amendments
In addition to the changes relating to public consultation, several other amendments deserve attention because they frequently arise in practice.
The validity period of a Location Determination (Penetapan Lokasi or Penlok) is now set at three years and may be extended. This provides greater flexibility for large-scale infrastructure and development projects that require longer implementation periods. For detailed procedures governing such extensions, readers should refer directly to the relevant statutory provisions and implementing regulations.
The scope of activities classified as being in the public interest has also been expanded. Among the categories identified in various policy summaries are Special Economic Zones (SEZs), Industrial Estates, Tourism Areas, and Food Security Areas. These additions broaden the range of development projects that may utilize the land acquisition mechanism for development in the public interest. Because the official list is technical in nature and may be presented differently across secondary sources, readers are encouraged to consult the relevant statutory provisions and implementing regulations for the complete and authoritative list.
As noted earlier, the mechanism for small-scale land acquisition involving an area of no more than five hectares was introduced to accelerate relatively limited land acquisition projects. Under this mechanism, the location determination may be issued solely by the relevant regent or mayor.
Critical Perspectives and Ongoing Debate
These amendments have not been without controversy, and a balanced discussion requires acknowledging the ongoing debate surrounding them. During proceedings before the Constitutional Court, a number of legal experts raised concerns regarding several of the amendments. One issue concerned the mechanism for small-scale land acquisition, which was argued to allow direct land acquisition without providing sufficient public-law safeguards. Under this mechanism, certain requirements—such as Environmental Impact Assessments (AMDAL) and conformity with spatial planning requirements—are no longer mandatory following the issuance of the Location Determination, and this relaxation has been the subject of criticism. The principal concern is that it may create an imbalance in bargaining power between small landowners and parties possessing significantly greater financial or institutional resources.
Such debates are a natural part of the evolution of any legal framework. Their inclusion here is not intended to endorse or criticize any particular position, but rather to demonstrate that Indonesia's land acquisition regime continues to evolve through judicial review, legislative reform, and academic discussion. Professionals working in this field should therefore remain attentive to future Constitutional Court decisions and subsequent regulatory developments.
Conclusion
The central conclusion of this discussion can be summarized in a single sentence: Law No. 2 of 2012 remains the legal foundation for land acquisition, while the Job Creation Law serves as an amendment to that foundation rather than a replacement. Both legal instruments operate together as part of Indonesia's current land acquisition framework.
Among the various amendments introduced by the Job Creation Law, the most significant practical change is the expansion of public consultation participants. Public consultation is no longer limited primarily to landowners or holders of land rights; it must also involve administrators and users of State-Owned Assets (BMN) and Regional Government Assets (BMD), including holders of Rights to Manage over state land. This amendment reflects the practical reality that many development projects are located on state-controlled land rather than privately owned property.
As Indonesia's land acquisition regulations continue to evolve and their implementing rules remain highly technical, the most prudent approach for practitioners is to rely on the official texts of the applicable laws and the latest implementing regulations.
Next Steps: Agencies currently preparing land acquisition projects should ensure that every stage of the public consultation process includes administrators and users of BMN/BMD in addition to entitled parties. Keeping updated copies of Law No. 2 of 2012 and Government Regulation No. 19 of 2021 as primary working references—and consulting legal professionals specializing in land law when dealing with complex cases—will help ensure compliance with the applicable legal framework.
Frequently Asked Questions (FAQ)
Does Law No. 2 of 2012 remain in force after the enactment of the Job Creation Law?
Yes. Law No. 2 of 2012 remains the primary legal basis for land acquisition for development in the public interest. The Job Creation Law amends certain provisions of the law but does not repeal it.
What changed in the public consultation process for land acquisition?
The categories of mandatory participants have been expanded. In addition to entitled parties, public consultations must now also involve administrators and users of State-Owned Assets (BMN) and Regional Government Assets (BMD), as well as affected communities.
Who is considered an "entitled party" in the land acquisition process?
An entitled party is any individual or legal entity that owns or holds rights over land designated for acquisition for development in the public interest. Such parties are entitled to compensation under the land acquisition process.
Who are the administrators and users of State-Owned and Regional Government Assets?
They are generally ministries, government agencies, or regional governments that control or utilize state land, including land held under a Right to Manage (Hak Pengelolaan). Their participation in public consultation is now mandatory under the amended legal framework.
How long is a Location Determination (Penlok) valid?
A Location Determination is valid for three years and may be extended. The detailed procedures governing extensions are provided in the applicable implementing regulations.
What are the current implementing regulations governing land acquisition?
The principal implementing regulation is Government Regulation No. 19 of 2021 concerning the Administration of Land Acquisition for Development in the Public Interest, which should be read together with Law No. 2 of 2012 and its amendments introduced through the Job Creation Law.
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