A 150-year old obstacle to land rights

Main photo: Protestors calling for land reform, Jakarta, September 2019 / Dhemas Reviyanto / ANTARA FOTO

This year marks the 150th birthday of one of the most consequential laws in Indonesian history. In 1870 the Dutch adopted the Agrarische wet or undang undang agraria. This law contains the provision that would become known as the domein verklaring: ‘all land not held under proven ownership, shall be deemed the domain of the state’. With this ‘domain declaration’ the Dutch colonial rulers claimed ownership of most of the land in Java. This ownership would later extend beyond Java. This domain declaration is important because it has facilitated the colonial exploitation of Indonesia by weakening Indonesian control of their land. Western plantation and mining companies are able to acquire access to land without having to buy it from rural Indonesians.

The domein verklaring is also important because it lives on. The principle established by the domein verklaring – that state interests are prioritised over the land rights of Indonesian citizens – still guides the character of land tenure in most parts of Indonesia. The state’s outsized control over land still bedevils Indonesia’s politics and economy.

The domein verklaring lives on

When the Dutch were thrown out in 1945, the newly independent government maintained the state’s control over land. For example, article 33 of the 1945 constitution states that ‘the earth and water and natural resources contained therein are controlled by the state and used for the greatest prosperity of the people’. This article contained a new legal concept of ‘state right of control’ (hak menguasai negara) that provided a new legal basis of state control over land and natural resources.

In 1960 Indonesia come close to abolishing the domein verklaring with the adoption of the Basic Agrarian Law (BAL). This law explicitly aimed to address the injustices created by colonial laws. This law also recognised customary land rights.

The New Order regime (1965-1998), however, changed course and reinstated the state’s control over land. The New Order again prioritised state control over the customary land rights of rural communities through reinforcing the principle of hak menguasai negara – claiming that the state should use the land ‘for the welfare of the nation’.

In 1967 the regime adopted a new forestry law reintroducing the domein verklaring principle. This law designated 143 million hectares – almost 75 per cent of Indonesia’s territory – as forest land (‘kawasan hutan’). Suharto decreed that this land was controlled by the state (via the Ministry of Forestry), and could not be owned by Indonesian citizens.

While the total amount has since been reduced, the Indonesian state still designates about 63 per cent of Indonesia’s territory as forest estate. Much like its colonial predecessor, the Indonesian state is using this control over land to award land concessions to companies. The government’s data shows that until 2017, 95.76 per cent of forest concessions were allocated for corporations, while only 4.14 per cent were under community management. These concessions give companies the legal right to take the land away from local people living and working on that land. In that sense, the domein verklaring lives on.

A troublesome heritage

This restriction on land ownership continues to have a pervasive impact on the quality of life of many Indonesians, as the roots of conflicts, social inequality and poverty.

The widespread land conflicts affecting all Indonesian provinces are one such example. Throughout Indonesia rural communities are engaging in demonstrations, land occupations and lawsuits to protest against oil palm, mining, agri-business and forestry companies taking their land. Local newspapers are full of such reports: according to the latest count by Konsorsium Pembaruan Agraria, there are currently 410 such conflicts mainly in Sumatera, Java and Kalimantan, involving 87 thousand families.

At the root of these conflicts is the control of the Indonesian state over large tracts of land and the weak recognition of traditional land rights. As rural Indonesians struggle to obtain or prove their legal ownership of land, it has been relatively easy for incoming large-scale plantation or mining companies with concession permits to claim that land. The consequences are protracted conflicts and significant local economic and social damage.

The state’s control over land also prevents upward mobility. A certificate proving land ownership can enable people to access credit from banks; without proof of land ownership, such loans are more difficult to obtain. In this sense the state’s control over land is having a negative economic impact: restricted land ownership is preventing people from obtaining loans that they could then use to start a business, invest in agricultural production, including the purchase of farm equipment and so on.

The state’s control over land is also making people poorer in another way: it is preventing people from benefiting from the natural resources on or under that land. For example, inhabitants of forest areas often find themselves in conflict with forestry officials over the right to extract timber and non-timber forest products to fulfil their needs. These officials invoke the state’s control over forest land to claim that only they can fell and sell trees growing on forest land, something which inhabitants resent and consider unfair. Not unfrequently people are arrested for logging trees on land which, in their mind, is theirs. In a similar, manner state officials regularly prevent people from engaging in mining, cultivation or harvesting on ‘forest’ land.

Half-hearted reforms

This damage to the well-being of rural Indonesians caused by the state’s control of land has not gone unnoticed. Over the years, activists and (some) law-makers have engaged in various attempts to abolish the domein verklaring principles and to curtail the excessive state-control over land and natural resources. A prominent example of a reform initiative was the adoption of the decree of the People’s Consultative Assembly (TAP MPR) No. IX/2001 on agrarian reform and natural resource management. The motion aimed to give people more control over land by pushing the agrarian reform agenda, however his initiative, among others, has still not yet been implemented.

In 2012 a lawsuit filed by the non-government organization (NGO) AMAN led to a famous constitutional court ruling that mandated the state to formally recognise communal land rights. In theory thereby altering the state’s control over forest land. However, again, the implementation of this ruling remained limited. In 2020 the formal recognition of customary forests remains restricted to 65 customary law communities and covers only a very small area of 35,150 hectares.

In recent years, the Jokowi administration has implemented TORA (Tanah Objek Reforma Agrarian: Land Object Program of Agrarian Reform), an ambitious program to hand out land titles and redistribute land to communities. Yet the program avoids the most vexing issue. So far these land titles are mostly given to people whose land ownership is well-documented and (mostly) located outside forest areas, thereby not affecting large parts of Indonesia.

Over the last twenty years Indonesia’s parliament has adopted several new laws that have further cemented the state’s control over land, including the natural resources law of 2004, the plantation law of 2004 and the mining law of 2009.

In this vein, the proposed Omnibus Law, which is currently being debated by the Indonesian Parliament (DPR), seeks to extend the land leases for companies to 90 years and aims to set up a state institution (the bank tanah) with the mandate to acquire, manage and distribute land to the benefits of investors and state projects.

In short, despite a long history of activism and legal reforms, the expansive control of the state over land has barely shifted.

Land and oligarchy

Why have these reform efforts been so unsuccessful? Apart from the considerable complexities of designing effective land reform it must be acknowledged that a structural problem exists. The primary reason why the domein verklaring continues to have influence is because political and economic elites profit considerably from the state’s control over land.

During the Suharto era, the ruling elites accumulated their wealth by cooperating with domestic and international logging companies. Since the fall of Suharto, corruption cases regularly show that political and bureaucratic elites are using the state’s capacity to award land concessions to make large amounts of money. Frequently an elected district head, governor or DPR member is found to have used his influence to direct concessions to companies owned by family members or friends. Available surveys of the sources of wealth of ruling elites illustrate the importance of the state’s control over land for Indonesia’s elites. The personal wealth of many political leaders themselves, stem from natural resource extraction and palm oil companies and rests on the concessions to land granted by the state.

The sad irony is that those with the power to enact laws to change the state’s control over land have the greatest interests in maintaining it.

Will the domein verklaring be abolished?

This year it is not only 150 years since the Dutch adopted the domein verklaring. It is also (almost) twenty years since Indonesian parliamentarians passed the TAP MPR resolution calling for land reform. Considering the observed negative impacts to the land rights and wellbeing of millions of Indonesians, it would be fitting to celebrate the domein verklaring’s 150th birthday by finally abolishing this colonial heritage.

Ahmad Dhiaulhaq (ahmad.dhiaulhaq@gmail.com) is a postdoctoral researcher at KITLV/Royal Netherlands Institute of Southeast Asian and Caribbean Studies. Ward Berenschot (ward.berenschot@gmail.com) is professor in Comparative Political Anthropology at the University of Amsterdam and a senior researcher at KITLV.