Introduction

Agrarian and land management is one of the main sectors that have been significantly affected by the promulgation of the Law Number 6 of 2023 on the Determination of Government Regulation In Lieu of Law Number 2 of 2022 on Job Creation (”Job Creation Law”). One of the strategic issues requiring attention is the establishment of the Indonesia Land Bank Authority (“Land Bank”) as a special agency with special authority in land management and functions to carry out planning, acquisition, procurement, management, utilization and distribution of land.1 The existence of the Land Bank as a legal entity is structured by the Land Bank Structure consisting of the following:2

  1. The Committee;
  2. The Supervisory Board; and
  3. The Executive Agency.

Only the Supervisory Board and the Executive Agency are considered the Land Bank organs out of the three structural components of the Land Bank. Discussion The following provides further explanation regarding the Committee, Supervisory Board, and Executive Agency.

  1. The Committee In principle, the Committee is responsible for establishing the strategic policies of the Land Bank.3 In carrying out its duties, the Committee is assisted by the Committee Secretariat, which provides technical, administrative, and analytical support to the Committee.4 The organization of the Committee is composed of a chairperson and members, with the following explanation:5
    1. Chairperson (concurrently a member) is the Minister in charge of government affairs in the agrarian/land sector;
    2. Members consisting of:
      1. the Minister in charge of government affairs in the agrarian/land sector (concurrently a chairperson);
      2. the Minister in charge of government affairs in the financial sector;
      3. the Minister in charge of government affairs in the public works and public housing sector;
      4. Ministers/heads of other agencies that are appointed by the President as members.
        In carrying out its duties, the Committee is authorized to:6

        1. Determine the number of the Executive Agency Deputies;
        2. Appoint and dismiss the Head and Deputies of the Executive Imlementing;
        3. Provide approval and ratification of the long-term plan, medium-term plan, Annual Work Plan and Budget of the Land Bank;
        4. Receive and evaluate the Supervisory Board and Executive Agency’s accountability and performance reports;
        5. Ratify the annual and performance reports of the Supervisory Board and the Executive Agency;
        6. Deliver annual and performance reports of the Supervisory Board and the Executive Agency to the President;
        7. Proposing capital increase for the Land Bank to the Minister in charge of government affairs in the financial sector;
        8. Provide approval for establishing a business or legal entity supporting the Land Bank’s development activities;
        9. Approve loans to finance capacity building for Land Bank asset management as outlined in the Annual Work Plan and Budget;
        10. Provide approval to policies and/or the Head of the Executive Agency Regulations that have a significant impact on the Land Bank’s development;
        11. Stipulate the formulation of land-utilization rates in accordance with the proposal of the Executive Agency; and
        12. Stipulate the Committee Regulation.
  1. The Supervisory Board The Supervisory Board is the organ of the Land Bank and is responsible for supervising and advising the Executive Agency in carrying out the organization of the Land Bank.7 The composition of the Supervisory Board consists of a maximum of 7 (seven) individuals, consisting of 4 (four) individuals from professional elements and 3 (three) individuals from government elements appointed by the President on the Committee’s recommendation.8 It should be noted that the provisions governing the composition of the Supervisory Board leave a vacant space if the number of Supervisory Board members is less than 7 (seven). One (1) member of the Supervisory Board is picked to serve as Chairman (concurrently a member). Members of the Supervisory Board from professional and government elements are appointed for a term of 5 (five) years and are eligible for reappointment for 1 (one) additional term. In carrying out its duties, the Supervisory Board is authorized to:9
    1. Supervise the performance target of Executive Agency;
    2. Advising the Executive Agency on the organization of the Land Bank;
    3. Propose to the Chairperson of the Committee for the temporary dismissal and temporary replacement of the Head and/or Deputies of the Executive Agency in the event of a loss or risk that threatens the Land Bank;
    4. Appoint independent Public Accountant for Land Bank on recommendation of the Executive Agency.
    5. Approve the swap payment mechanism in the process of land utilization;
    6. Approve loans in excess of IDR 1,000,000,000,000.00 (one trillion rupiahs);
    7. Provide consideration for the revision of the Annual Work Plan and Budget;
    8. Provide consideration to the Committee on Capital Increase proposal;
    9. Access Land Bank-related data and communicate directly with the employees;
    10. Provide consideration with respect to the granting of financial rights and facilities;
    11. Provide approval over temporary capital subsciption and transfer;
    12. Ensuring the implementation of transparency and accountability in financial and non-financial reports and good governance;
    13. Monitor and ensure the effectiveness of governance, including the management of conflicts of interest; and
    14. Carry out the authorities delegated by the Committee.
  2. The Executive Agency The Executive Agency is the Land Bank’s organ that is authorized and fully responsible for Land Bank organization.10 In this context, “organization” refers to the Land Bank’s functions and duties in land planning, acquisition, procurement, management, utilization, and distribution.
    1. Duties and Authorities of the Executive Agency The Executive Agency plays a vital role in carrying out the organization of the Land Bank. The followings are the duties and authorities delegated to the Executive Agency. The Executive Agency’s Duties:11
      1. Conduct independent operational activities in managing assets, finances, and business activities;
      2. Creating a thematic map of land and areas belonging to or potentially belonging to the land bank;
      3. Managing human resources, including appointment, termination, and employee rights and obligations;
      4. Implementing effective governance, risk management and internal control systems;
      5. Develop long-term plans, mid-term plans, and the Annual Work Plan and Budget of the Land Bank;
      6. Responsible for asset management and the development of the Land Bank’s operational activities, with regular reporting;
      7. Develop the strategic plan for the activities of the Land Bank;
      8. Develop, examine, or revise the Master Plan;
      9. Provide ease of doing business/approval in the implementation of land utilization agreements;
      10. Conduct land procurement either directly or indirectly through the stages of land procurement;
      11. Stipulating the scope of agrarian reform and social concerns;
      12. Providing land for agrarian reform agenda and housing matters for low-income communities;
      13. Conduct Land Bank business activities in the form of:
        1. transfer of inventory assets to other parties;
        2. provide recommendations for the encumbrance of security title on inventory assets submitted by land title holders;
        3. provide recommendations for the extension and renewal of land title submitted by the holders of land title;
        4. other business activities related to the Land Bank’s operations; and
        5. conduct investment activities.
      14. Conducting the organization of the Land Bank with the principles of ethics, responsibility, integrity and sustainability;
      15. Represent the Land Bank in and out of the Court;
      16. Conduct Executive Agency Meetings for decision-making; and
      17. Conduct any other duties delegated by the Committee and/or the Supervisory Board.
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The Executive Agency’s Authorities:12

  1. Stipulate regulations for human resource and organizational management
  2. Stipulate regulations for the procurement of goods and services in order to carrying out land bank duties that adhere to the the principles of transparency, accountability, efficiency and effectiveness;
  3. Stipulate business governance regulations, including land planning, land acquisition, land procurement, land management, land utilization, land distribution, and cooperation;
  4. Stipulate regulations on the number of land-utilization rates and cooperation framework;
  5. Establish business or legal entities to support the land bank’s organization;
  6. Stipulate regulations for financial and reporting governance systems;
  7. Formulate and establish a financial accounting system;
  8. Stipulate investment-related regulations;
  9. Develop loan proposal plan;
  10. Stipulate a mechanism for the extension and renewal of land titles that can be granted simultaneously in accordance with the land-utilization cooperation agreement; and
  11. Regulating land-utilization rates regarding the extension and renewal of land titles;
  1. Organization Structure of the Executive Agency The Executive Agency consists of a Head and Deputies.13 In carrying out its duties, the Executive Agency is supported by the Secretary of the Executive Agency and the Internal Supervisory Unit (ISU).
  2. Term of Office of the Head and Deputies of the Executive Agency The Head and Deputies of the Executive Agency are appointed for a five-year term and are eligible to be reappointed for one additional term.
  3. Decision-making mechanisms of the Executive Agency There are two known decision-making mechanisms within the Executive Agency:
    1. The Executive Agency Meeting, as the primary decision-making mechanism within the Executive Agency; and
    2. Circular Resolution, which refers to decision-making mechanisms aside from the Executive Agency Meeting that can be held in “certain circumstances”.
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Closing The structure of the Indonesia Land Bank Authority consists of the Committee, the Supervisory Board, and the Executive Agency. In carrying out its duties, each Land Bank body structure is supported by other supporting units, such as the Committee Secretariat, the Secretary of the Executive Agency, and the Internal Supervisory Unit, which are integral to the organizational structure of the Indonesia Land Bank Authority.

Avaya Ruzha Avicenna 

Sources

  1. Article 125 of Law Number 6 of 2023 on Job Creation (hereinafter referred to as Job Creation Law); Article 1 paragraph (1) of Government Regulation Number 64/2021 on Land Bank Authority (hereinafter referred to as GR 64/2021)
  2. Article 31 paragraph (1) of GR 64/2021
  3. Article 1 point 5 of GR 64/2021; Article 31 paragraph (2) of GR 64/2021
  4. Article 8 paragraph (3) of Presidential Regulation 113/2021 on Structure and Organization of Land Bank Authority (hereinafter referred to as Presidential Regulation 113/2021)
  5. Article 131 paragraph (1) of Job Creation Law; Article 32 paragraph (1) of GR 64/2021;  Article 4 of Presidential Regulation 113/2021
  6. Article 5 paragraph (2) of Presidential Regulation 113/2021
  7. Article 31 paragraph (4) of GR 64/2021
  8. Article 33 paragraph (3) of GR 64/2021; Article 9 paragraph (2) of Presidential Regulation 113/2021
  9. Article 19 paragraph (2) of Presidential Regulation 113/2021
  10. Article 1 point 7 of GR 64/2021
  11. Article 28 paragraph (2) of Presidential Regulation 113/2021
  12. Article 28 paragraph (3) of Presidential Regulation 113/2021
  13. Article 34 paragraph (1) of GR 64/2021; Article 23 of Presidential Regulation 113/2021