The East Timor Land Law Program: Four Years On - Still No Land Law

Citation: 2010 ETLJ 2 The East Timor Land Law Program: Four Years On - Still No Land Law

The USAID Land Law Program in East Timor produced draft legislation 4 years ago this month and there is still no land law in East Timor.
There has now been more than a decade for reforms to be made to the land law in East Timor but successive governments have failed to come to terms with the most complex of social problems in this country: land law and policy concerning the indigenous and colonial land rights systems that have operated in this jurisdiction over the last 4 centuries of its recorded history and the violent and unsettled land disputes that are largely the result of the colonial occupations.

This social problem - which ultimately stems from uncertainty surrounding land ownership and the lack of a just dispute resolution mechanism to deal with the multitude of land conflicts - is not just a matter of the technicalities of legislative drafting but revolves around more complicated social, political and economic exigencies. They have proven to be too difficult to confront.

This uncertainty erodes the integrity of the civil peace and economic development and the longer the government sticks its head in the sand about land problems, the more serious and destabilising these problems will become.

The following is a report from the East Timor Legal Information Site legal news archive from June 2006 about the East Timor Land Law Program which to date has failed to provide any properly informed framework for the articulation of the requisite policies and laws - notwithstanding considerable donor aid and the mobilisation of numerous international experts.
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02 JUNE 2006 USAID Land Law Program II East Timor: Final Report Published - The final report on the USAID-funded East Timor Land Law Program has been published. The Land Law Program, implemented was undertaken by the the Ministry of Justice through the National Directorate of Land and Property.

"On the legislative drafting front, LLP II worked with government and prepared the main land bill entitled Juridical Regime of Immovable Property - Part III: Property and Transfer Systems, Land Registration, Pre-Existing Rights and Title Restitution. This bill addresses the themes related to the new immovable property and land registration systems to be implemented in the future, the provisions for the resolution of land claims and title restitution of pre-existing freehold rights and the compliance with the Constitution by non-national claimants of land rights. Numerous work sessions with high-level government officials and a special committee designated for the review of the bill took place. Advocacy for the passage of the law was carried out to the fullest extent possible. The submission of the bill to the Council of Ministers is pending.

The law drafted previously by LLP II on Leasing between Private Parties was passed by Parliament. A draft decree-law for the regulation of illegal constructions and informal settlements was prepared and delivered to the Ministry of Justice. The first debate of the bill at the Council of Ministers took place in December 2005.

A bill on Land Taxation and Expropriation was also delivered to government in mid-March 2006 for the future debate of these matters and to be considered only after the main land bill is passed and the land registration system is fully functional. In addition, the DNTP Organic Law was drafted and accepted by the Ministry of Justice for consideration along with ministerial decrees on lease tender processes, contract preparation, and delegation of responsibilities by the Minister of Justice to DNTP." First published on the East Timor Law and Justice Bulletin on  23 June 2010

Community land in East Timor - A New Tragedy of the Commons?

2010 ETLJ 1 Community land in East Timor - A New Tragedy of the Commons?

The East Timor Law and Justice Bulletin has previously published analyses pointing out certain fundamental deficiencies in the draft land law’s provisions pertaining to indigenous land tenure systems in East Timor. To reiterate briefly, the draft would confer no juridical status on either customary land tenure systems or the individualised traditional rights that have emerged from those systems; it confers no juridical status on the customary managers of the land and makes no provision for just compensation for the diminution or extinction of customary land rights. Furthermore, the draft land law would impose a mere obligation on the government "to consult" with local communities when it is making decisions about the use or alienation of the land in their territory. The protection of community lands is left entirely in the hands of the executive.

As East Timor witnessed when it was part of Indonesia, customary peoples and their lands were the subject of exploitation, dispossession and destruction under a legal regime that paid no respect to the indigenous land systems. Similarly, in Australia, during the colonisation process, aboriginal lands were systematically appropriated without compensation and granted to the invading Europeans; leaving hundreds of indigenous communities in oblivion. In fact, the aboriginal people were the subject of a land-induced genocide of the most horrifying dimensions; leaving “a legacy of unutterable national shame”, as the High Court of Australia stated in the history-shattering case of Mabo v The State of Queensland (No 2) that overturned centuries of legal lies and restored the rightful juridical status of indigenous lands in that country. It is to such extremes that failures on land law and policy inexorably lead - to epic suffering, grief and loss; something of which the people of East Timor have had far more than their fair share.

One of the constitutive causes of the law has, at least in Western jurisprudence, been to define and protect property rights since they are essential to individual liberty, economic and political autonomy as well as social development. Land rights are a most quintessential vector in the entrenchment and maintenance of the relationships of power and organisation in all human communities.

When the law fails in this core function, it has failed the most central tenets of democracy and capitalism and injustices and conflicts arise which have the potential to destabilise the civil peace. East Timor policy-makers, administrators and researchers know all too well of the potentiality for violence, chaos and disorder when land issues are not properly managed.

Regrettably, the stage has already been set in East Timor for further problems that are rooted in the complexities of land law and policy; and in particular those relating to indigenous land tenure systems confronting intrusions from both domestic and foreign capital as well as the state.

In a recent article (Justice for the Poor Briefing Note November 2009 Volume 3 Issue 3 entitled Contracts, Land Tenure and Rural Development in Timor-Leste) Rod Nixon refers to some examples of the granting of rights and concessions over community lands in East Timor which have already taken place even though the draft land law is yet to be enacted and even while there is no other substantive legal regulation of community lands in that country.

Nixon recites 2005 survey data that shows that about 3% of rural land in Timor-Leste appears to have been alienated from customary tenure. Since then, of course, there have been several significant interventions by the state granting rights over community lands to private capital.

Nixon notes that other cases  include the 12 hectare East Petroleum site in Liquica and the 2008 Memorandum of Understanding between the GoTL (Government of East Timor) and GTLeste Biotech concerning a renewable 50 year lease for 100,000 hectares 'of unproductive land'. Another case is a lease issued by the GoTL to Timor Global in 2005 for 3000 hectares of coffee plantation at Fatubesi (Ermera district).

Nixon’s observations on this latter case are that “[a]lthough formally state land, Timor Global discovered that the lease provided an insufficient basis for the company to commence crop improvement and management activities. Before the company could begin work, it had to negotiate with community leaders and agree to provide benefits including employment opportunities and security arrangements. Timor Global has now commenced work on a 60 hectare section and employs around 80 members of the local community (including 30 said to have connections to the resistance movement)."

Timor Global is also active in Baucau district where the company has leased 1,500 hectares of community land and is introducing intensive cultivation methods on sites in three villages totalling up to 100 hectares.

Nixon tells us that "benefits including employment opportunities and security arrangements" were negotiated in one case - which would be an extraordinary form of compensation not known to the land law since the international standard is current market value for the interest in the land that is diminished or extinguished by a resumption and it seems that no other compensation was offered. Past experience informs us that when a customary community is dealing with private capital which has the power and, if necessary, the force of the state standing behind it, and there are no clearly defined legal entitlements, rights and benefits for the appropriation of property rights, one thing is certain: that the negotiation process is not adequate nor is the compensation just.

There have been other cases of problems being caused by an inappropriate approach to customary land tenure systems in East Timor. And one which highlights the dangers of conflict and violence threatening to break out from the mismanagement of the problem is the resumption of community lands for the Metinaro base of the East Timor Defence Forces. This appropriation occurred during the UNTAET period and was personally witnessed by the present writer. When the land was being surveyed by cadastral offices of the National Directorate of Land and Property (DNTP), local men appeared armed with weapons. The Defence Force itself had to provide security and oversee the process. Armed military personnel attended the handover of compensation which was some rice. Some rice for the land that this community had occupied since time immemorial. The suppression of resistance to the unjust taking of community lands works for a while but social discontent simmers away because of the injustice thereby rendered.

It is worth noting Nixon’s comment that “[w]hereas the GoTL, with USAID support, is addressing the critical area of property rights in urban and peri-urban areas through the Ita Nia Rai program, this initiative will not cover the vast amount of the country over which customary systems of authority predominate.”

Ultimately, this is a misrepresentation on both counts that needs to be corrected.

Firstly, given the criticisms of the draft land law that has been produced under the Ita Nia Rai program - and not just those in relation to the provisions on community land but the broader questions of whether possession or restitution is the ultimate goal of the draft as well as the appalling lack of adequate or meaningful public consultations on the draft, the question remains whether this draft is really going to “address the critical area of property rights” or whether it is something more insidious than it appears.

Secondly, it is wrong to state that the land law program “will not cover the vast amount of the country over which customary systems of authority predominate” because the draft land law clearly would impact on and would directly regulate (or purport to regulate) community land. It does this in the manner described at the beginning of this analysis and in the articles recited below, by ignoring the substantive legal and policy issues and subjecting community land to the pure will of the executive; without recourse to judicial review of government decisions that affect those lands. The draft authorises – poorly and improperly - the government to make decisions on the use and occupation of community lands (Article 26(2)), and in that decision-making process, the government needs only to consult with the community. No mention of the legal status of those rights. No mention of compensation.

Nixon appears to endorse this position by reciting other authorities that suggest “that state-managed negotiation frameworks for accessing land for development can play a role in both facilitating economic development and reducing the risk of land conflict.” But such a state-dominated system only works in a democratic rather than an autocratic way and without consequential disputes and conflicts if the extant legal rights of the local communities over their lands are already enshrined in the law and there is a separation-of-powers inspired judicial review regime simultaneously in place. In East Timor, this is not yet the case. And it seems unlikely that it is intended to be the case.

Nixon’s obscurantism and obfuscations should not go unnoticed by those interested in the development of a rational, informed and experiential policy and legal regulatory framework for community land in East Timor. It is unfortunate that such an important debate is articulated in such a superficial way.

Warren L. Wright BA LLB
(former UNTAET Property Rights Adviser)

First published on the East Timor Law and Justice Bulletin on 21 February 2010

See also:

Negative Impact of Draft Land Law on Customary Land Tenure Systems in East Timor on the East Timor Law and Justice Bulletin

2009 ETLJ 13 Communal Land Tenure Systems in East Timor to have no legal status under new draft land law

Communal Land Tenure Systems in East Timor to have no legal statusunder new draft land law

Communal Land Tenure Systems in East Timor to have no legal status under new draft land law

The question of security of tenure for customary land tenure systems has been a crucial issue facing traditional communities throughout the world as they confront the forces of modernisation and global capital.

In many places - both in the developing world and in the history of the great western democracies - indigenous peoples' land has been seized by colonisers or confiscated by the modern State for natural resource exploitation and political and economic domination. Entire communities and their unique cultures have been annihilated in these processes and indigenous people have been powerless to challenge the intrusions and appropriation of their customary lands because their land tenure systems were not conferred with juridical status by the legal system. This left traditional communities vulnerable to extinction - along with their ancient land management and ownership customs and law.

In East Timor, traditional communities are about to face the full force of the state's assertion of control and ownership of customary land in East Timor. This was instituted by the 2002 Constitution which mandates the fundamental right of the state in relation to the land and resources in East Timor:

Article 139
(Natural resources)

1. The resources of the soil, the subsoil, the territorial waters, the continental shelf and the exclusive economic zone, which are essential to the economy, shall be owned by the State and shall be used in a fair and equitable manner in accordance with national interests.
2. The conditions for the exploitation of the natural resources referred to in item 1 above should lend themselves to the establishment of mandatory financial reserves, in accordance with the law.
3. The exploitation of the natural resources shall preserve the ecological balance and prevent destruction of ecosystems.

While this provision pays due regard to the environmental dimensions of natural resource management, it is silent on the cultural aspects which have existed since time immemorial over much of the land in East Timor.

This is so even though the Constitution also requires the state to respect the customs of the country by Article 2 (4) which provides that: The State shall recognise and value the norms and customs of East Timor that are not contrary to the Constitution and to any legislation dealing specifically with customary law.

It has been argued that this provision means that customary land tenure systems must be recognized by the state. But that is not the plain and ordinary meaning of the words of this provision which subject this state obligation to the proviso that the relevant norms and customs are not contrary to the Constitution. As noted above, the Constitution empowers the state to deal with natural resources in the “soil, the subsoil, the territorial waters, the continental shelf and the exclusive economic zone” of the country. This includes resources located within the territories of customary land tenure systems. In this way, the Constitution is the basis for the lack of juridical recognition of these land tenure systems that are based on the customs and norms of East Timor.

The new draft land law does not deviate from this policy in so far as it relates to what it defines as community land: “land in areas where a local community organizes the use of the land and other natural resources by means of norms of a social and cultural nature.”

Clearly, the constitutional state control of natural resources by Article 139 is inconsistent with if not contrary to the customary communal control of resources which must therefore fall in the face of the Article 139 leaving no basis for the assertion of the legal status of customary land tenure systems in East Timor.

The relevant provisions in the draft land law that touch on communal land tenure systems in East Timor are set out below.

CHAPTER V
COMMUNITY LAND

Article 23
(Definition)
1. Community land is considered to be land in areas where a local community organizes the use of the land and other natural resources by means of norms of a social and cultural nature.
2. The National Property Cadastre shall identify areas that are considered as
community land.

Article 24
(Local community)
Local community means a grouping of families and individuals living within a territory at the level of a village or smaller, which aims at safeguarding common interests through the protection of housing areas, agricultural areas, whether under cultivation or not, forests, sites of cultural importance, pasture land, sources of water and areas where there are natural resources, the use of which is shared.

Article 25
(Customary norms and practices)
1. On community land, local communities participate in:
a) The management of natural resources;
b) The resolution of conflicts relating to the use of natural resources;
c) The identification and definition of the boundaries of the lands they occupy.
2. In the exercise of the activities referred to in items a) and b) of No. 1 of the present article, the local communities utilize customary norms and practices.

Article 26
(Protection)
1. The State shall protect community land, preventing undue appropriations, the indiscriminate and unsustainable use of natural resources and real estate speculation.
2. The Government shall consult with the local community before authorizing third parties to use land in the community land areas.

The critical provision is proposed Article 26(2). The government’s constitutional authority and control is the basis of this provision which only requires it to consult with local communities over the exploitation of natural resources within customary land tenure territories. There is no obligation to pay compensation for the loss or despoliation of customary land. No juridical status is conferred on the local traditional authority structures or on the traditional land tenure systems.

This exposes traditional communities to the same type of treatment they received during the Soeharto dictatorship – violence and dispossession without just compensation. When the East Timor Defence Force base was being constructed at Metinaro, land belonging to the local community was resumed. This resumption did in substance if not procedurally comply with the applicable Indonesian law on the compulsory acquisition of land in that the only compensation paid was some bags of rice.

When cadastral officers of the then UNTAET/ETTA Department of Justice Land and Property Unit went to survey the land, local residents presented with machetes.

Consistent with the methods deployed during the illegal occupation by the Indonesian state, armed soldiers of the East Timor military and the police accompanied every development in this acquisition of traditionally-held lands on the outskirts of the capital.

This set the precedent for how community land was to be dealt with by the East Timorese state and this policy is continued and entrenched in the new draft land law.

Grievances caused by the unjust acquisition of land and property by the state do not go away even when the threat of deadly force is deployed by the state to suppress the conflict thereby generated. In fact, those grievances simmer on for many years - and down through generations. The government of East Timor and its policy advisers know this well. The most notorious land conflict in East Timor - the Watu Lari case - has caused the outbreak of violence and killings several times over the decades it has been developing with no resolution from the state.

In fact, such conflicts pose a grave danger for social stability, the civil peace and harmony between the community and the government as well as for the human rights of traditional communities.

More serious attention needs to be focused on the issue of customary land tenure systems in East Timor as the country tries to settle its many complex and long-standing land conflicts.

Warren L. Wright BA LLB

Former Property Rights Adviser to the United Nations Transitional Administration in East Timor (2000-2002) and International Land Law Adviser on the Indonesian Land Administration Project (1994-1996/1999)

First published on the East Timor Law and Justice Bulletin on 12 July 2009

Related Articles

2004 ETLJ 7 Report on Research into Adat Land Law in East Timor

East Timor Land Rights: Restitution Not Possession - A Comment on theDraft Land Law

Original Citation: 2009 ETLJ 10 East Timor Land Rights: Restitution Not Possession - A Comment on the Draft Land Law

Who owns East Timor? The East Timor Department of Justice is presently conducting public consultations on the draft new land law that is purposed to clarifying the vexed question of land ownership and to resolving the chronic violent conflicts over land.

Earlier information from the Ita Nia Rai (Our Land) land program in East Timor, which is funded by the United States Agency for International Development (USAID), indicated that the land law principle of possession would be the basis of the new law. In fact, this turns out to be a deception because rather than positing the land law principle of possession as establishing a lawful title to land, the central tenet of the draft is that possession will not be admitted against the most fundamental right of ownership of land.

Rather, possession will only apply to the lesser rights that are derived from the right of ownership or from a grant on state land. All of the hak milik and propriedade perfeita rights in East Timor are documentary or documentary-provable rights in respect of which no possession will be allowed.

The complete rights of ownership arose from the application of the Indonesian land law and are known as hak milik[1] (right of ownership) or which originated from land right grants effected under the Portuguese colonial land law and which are known as propriedade perfeita[2]. The lesser rights that will be susceptible to the possession rule are derived from the most complete rights of ownership or from state land.

These lesser rights that derived from either the Indonesian hak milik or from a grant of a right by the Indonesian state on state land are known as hak guna bangunan (right of use of structures; which can exist on both land the subject of hak milik or state land) and hak guna usaha (right of enterprise; which only existed over state land). Hak guna usaha was granted for enterprises such as forestry, plantations, quarrying and so on including the coffee plantations in East Timor whose original Portuguese-based land titles were converted to the Indonesian statutory right of hak guna usaha. Hak buna bangunan was granted for residential use purposes over both land the subject of a pre-existing private (documentary) full right of ownership or state land.

The derivative Indonesian land rights were of only limited duration; with the original grant being for a term of 25 years (extendable once at the state’s discretion for a further 25 years) in the case of hak guna usaha on state land and an initial term of 30 years for a hak guna bangunan extendable once for at most 20 years at the discretion of the hak milik owner or the state if the right is on state land.

The former Portuguese lesser right of aforamento[3] is the land right under Portuguese law in East Timor which arose from an agreement over State land where the Grantee of the right was given the authority to fully enjoy the use of the land with the obligation to pay to the State an amount of money referred to as “forro", which is evidenced by an “Alvara de Concessao Definitif” or in respect of which there was already a definitive decision of the Portuguese Government before the coming into force of Law No 7 of 1976 and the land has not been surrendered by the right holder or his/her legal representative.[4]

The lesser rights of hak guna bangunan, hak guna usaha and aforamento will be subject to the proposed 20 year possession rule thus allowing a current occupant of land the subject of those rights (or that occupant relying on his predecessors’ possession where the present occupant’s possession is less than 20 years) to exclude the documentary title holder of the lesser right (but not of the underlying full right of ownership) from the land whose title will be extinguished. The documentary title holder of the lesser right will be entitled to compensation for the historical value of the land which will be paid by the state that will then be entitled to recover the compensation debt from the possessor who has gained title.

What will be the practical effect of this rule? The first problem is that those rights (at least the Indonesian hak guna usaha and hak guna bangunan) are of only limited duration anyway. In the absence of an extension of the initial grant of those rights by the hak milik owner or the state (depending on whether the right was granted on private land or state land), the initial terms of 25 and 30 years will have almost expired by the time the period of possession has run against them leaving, at most, 5 or 10 years of ownership to the successful occupant.

After that, the land will revert fully to the documentary hak milik owner or the state. In regard to the state land, it is interesting to note that there is a general prohibition of possession against state’s public domain land in the draft as well so there is an internal contradiction in the draft on that point, at least, and it will be interesting to see how this contradiction will be resolved at the practical level when considering claims of occupation of hak guna usaha land which exist on state land or claims to hak guna bangunan land in respect of which the underlying full right is vested in the state itself.

Possession can only operate against the documentary holder of the hak guna usaha or hak guna bangunan. It can not operate against the documentary owner of the underlying full right of ownership or the state’s right to the land at the expiry of the term. It is not clear in the draft what the right gained by a successful occupant of hak guna bangunan or hak guna usaha will be.

A successful possessor can not gain the full right of ownership because that is vested in the owner of the full underlying right so a successful applicant could only ever gain something which is similar in nature to the original hak guna bangunan or hak guna usaha and to the extent that it can only be of a limited term. It will, in effect, be a type of lease only – which will eventually be lost in any event. So, it might be asked, what real advance is being rendered by this reform?

To return to the present purpose, the draft land law does not permit possession to operate against the documentary owners of hak milik or propriedade perfeita. It is only permitted against the lesser, derivative rights that were carved from the underlying full ownership right in the case of private land or from the state’s rights in the case of state land in respect of which the lesser right was granted.

Having regard to the limited operation of possession as set out in this draft land law, the most critical edict of this draft is that the owners of documentary title to the fundamental right of ownership in East Timor who were unlawfully dispossessed of their land at any time in the past will not be affected or encumbered by any possession except where there has been possession of any lesser right on the land the existence of which is entirely dependent on the master right of ownership. This will be so whether the possession has been in good faith for 20 or more years or not.

Most dispossessions occurred because the owners were killed or died during the illegal occupation by Indonesia or the owners fled their land and or East Timor itself in the face of violence or the threat of violence as the long conflict dragged on for 24 years or because of their political or ideological alignments. Even in the post independence period, dispossessions have taken place as late as 2006 because of internal political instability and violence[5].

Abandoned land was re-allocated (but not with any legal title) by the military in the early years of the occupation and this was continued by the National Land Agency when the Indonesian civil administration was established in East Timor and into the present era under UNTAET and by the independent state which has continued to administer private abandoned land. These allocations are the root of many disputes and conflicts over land in East Timor.

Many of the originally unlawfully occupied properties were transferred on to third parties but not with any formal legal title so these occupants or the last in a series of occupants will have no claim at all since they are not in possession of the lesser rights.

Some were fraudulently granted by the Indonesian National Land Agency (one of the most corrupt of all Indonesian bureaucracy). If the fraud can be proven, the otherwise lawful owner who relies on the original documentary title that was fraudulently extinguished, should be entitled to reclaim the land and that will be permitted to because no possession is admitted against the original lawful documentary owner of the hak milik or propriedade perfeita.

Many rights created during the occupation were lawfully granted to good faith purchasers. Their titles will not be disturbed by any long term possession because they hold the documentary title. This will be the case for the 40.000+ Indonesian land rights and any extant Portuguese colonial land rights (whose existence is doubtful anyway because Indonesian legislation converted them all to Indonesian statutory rights) - except the lesser ones described at the beginning of this analysis which will be the subject of possession. But again, the underlying documentary (or state) title will continue to exist and will arise fully and completely again in the hands of the original documentary owner when the term of the right that has been gained by possession expires.

And so, ultimately, no documentary title can ever be extinguished by possession and those who own the original documentary title to land in East Timor will have their entire property ownership rights in the land restored to them.

This is the juridical concept of restitution. It is the opposite of what the initial information issued by the East Timor government’s Department of Justice Ita Nia Rai land program stated and that was that possession would be the principle concept in the forthcoming land law reform.

Restitution is not a new idea. In South Africa, for example, with the end of the racist dictatorship, the South African constitution gave people and communities who had been dispossessed of land as far back as 19 June 1913 as a result of racially discriminatory laws or practices the right to restitution of that property or to fair compensation . People who had been dispossessed of their land had until December 1998 to lodge a claim for the restoration with a Land Claims Commission.

It is estimated that the total of 67 531 claims were lodged before the deadline (see this link for more information on this exercise in restitution in South Africa). Restitution was also implemented in post-communist states in Europe following the collapse of the socialist empire (see for example, the case of Bulgaria or Romania).

Land restitution programs link the past and the present, and may allow former landholders to reclaim lands which formed the basis of earlier identities and livelihoods. Restitution also has a moral weight that holds broad appeal; it is represented as righting injustice and healing the injuries of colonialism.

Restitution - not possession - is the principle concept of the draft East Timorese land law and the evident policy of the Government of East Timor.

This point needs to be the central message of the public consultations. The restitution of the documentary owner of the most complete rights of land ownership in East Timor is the critical issue that must be the subject of a complete and participatory consultation process.

The central tenet of the draft appears, therefore, not as the deployment of a flawed notion of possession in the limited circumstances described above, but the entire restoration of the documentary owners’ rights through the juridical principle of restitution. Although this is never expressly stated in the draft.

This reform highlights another important point and that is the repeal of the present applicable land law in East Timor that admits possession against the owner of the hak milik/right of ownership that is evidenced by a documentary title.

This applicable law is contained in Indonesian Government Regulation No 24 of 1997 on land registration which permits good faith 20-year possession against a hak milik (right of ownership) owner as well as the owners of lesser rights.

Government Regulation No 24 of 1997 includes the following provision:

Subsection 2
Evidence of Old Rights

Article 24

(1) The existence of a land right resulting from the conversion of an old right shall be proven with evidence in the form of written documents, witnesses’ information, and/or statements made by the party in question which are evaluated by the Adjudication Committee in the case of systematic registration or the Head of the Land Office in the case of sporadic registration as having an adequate content of truth for purposes related to the registration of the right in question, of the right holder, and of other parties’ rights which encumber it.

(2) In the case where there is not any evidence or there is no longer any evidence as meant in paragraph (1), the recording of the right in question can be carried out on the basis of the fact that the land parcel in question has been physically possessed for twenty (20) consecutive years or more by the person applying for the registration of the right in question and his/her predecessors, under the following conditions:

a. that the possession of the land parcel in question has been made in good faith and in a transparent way by the person in question as the party which is entitled to it;

b. that the possession of the land parcel in question was not questioned by the relevant adat law community or the relevant village/kelurahan community or other parties either before or during the period of announcement as meant in Article 26.

It is equally important that this point be clearly articulated in the public consultation process.

But, aside from the strict legalities of restitution of land titles to those dispossessed during the illegal occupation of the homeland by Indonesia, the restoration of the documentary land title owners in East Timor will have some fundamental impacts not just on the legislative landscape, but, perhaps more importantly, on the political, social and economic life of the country.

It will mean the restoration of the vast real estate holdings of the political and economic elite - those East Timorese aligned to either (or both) the Portuguese and Indonesian dominations – who for whatever reason, were unlawfully dispossessed of their land as the flow of political power in East Timor swung from the European colonists to the Indonesian occupiers and thence into the post-independence era. It will mean the dispossession of occupants of these lands or demands from the land owner for rent. Many fled the Indonesian invasion. Many gained land through their personal integration with the occupation. Still others lost their land because of internal political strife. Even in the post-independence period, lawful owners of land have been terrorised into leaving their homes because of their political affiliations to either Fretilin or the centre-left Gusmao political structures.

Documentary title holders whose titles will be confirmed will wish to resume occupation themselves or lease the land out for market-value rent or permit third parties to carry out residential or agricultural developments or other exploitations of natural resources such as quarries, mining, forestry, plantations and the like. If such developments are inhibited by conflicts over land or lack of legal clarity of land right ownership, that will have a considerable impact on economic development and poverty eradication which are critical objectives of the government and the international donor community.

But, the level of land conflicts will not be reduced nor will the great bulk of disputes be settled. Indeed, it may be that the restitution of documentary land titles in East Timor holds the potential to destabilise social harmony in land relations in East Timor (such as they are) by introducing a new element that is bound to inflame the situation. This new element is a clear statutory basis for dispossessed documentary title holders of the right of ownership to land in East Timor to reclaim their land.

Another feature of the draft is that it provides for mandatory payment of compensation by parties awarded a title based on possession to the dispossessed documentary title holder of the lesser rights mentioned above that will be subject to the possession rule. This state-imposed obligation on citizens in these circumstances is unusual. It has also been pointed out that compensation will not be for present market value but the value of the land at the time of the dispossession. This would violate the normal democratic "just compensation" principle of compensation of the current market value for the involuntary extinguishment of private land rights.

The fundamental purpose of the law of land is to provide security of tenure and certainty of title. These are essential ingredients of the civil peace and without them, order is under constant threat; as is the rule of law. Economic development and poverty alleviation are lost.

And that is what the new East Timorese draft land law will do to some extent. But it must be very clearly understood that land - and any land law - involves not just fine questions of law but turns attention to the fundamental social, economic and political structures in all human societies.

Property laws entrench private property – and inequality - as a fundamental basis of capitalist social relations. Socialist property laws, and some other developing countries’ laws (including the present basic land law of East Timor; the Indonesian Basic Agrarian Law) favour public or state ownership and or control of land – as well as a central role for the state and those who control the state apparatus and their relatives and cronies – in the economy.

The public consultation process must be honest and transparent. It must be participatory and conducted over a sufficiently long period of time to permit input from civil society and other stakeholders - and not merely take account of the interests of the landed class whose titles are about to be confirmed. The government is only proposing a few months of consultations but at least a year is needed.

Civil society in East Timor and the international community must ensure that they make heard the claims of the disempowered and vulnerable poor, of farmers, of traditional communities, women, the Church and the youth. Undoing the past injustices relating to land and property ownership and providing access to land and land equity through land reform and redistribution in the present and future, require a fully informed policy process that leads to a regulatory framework - not just one draft law - that pays due regard to human rights and the universal principles of justice, equity and fairness.

That should be focus of the land law reform program in East Timor. Instead, after many years, what appears to be a draft that is so limited in its consideration of the broader legal framework that needs to be developed for East Timor. A properly constructed land law reform program would be looking not just at the issue of the confirmation of documentary title holders of the full right of ownership of land in East Timor but an entire policy framework that seeks to address the whole range of central issues. A piecemeal approach is not really a sound solution.

The salient features of the draft need to be properly explained to the community and specifically to title holders and occupiers of land in East Timor.

The traditional communities of East Timor – each of which has its own customary land law – must also be properly informed by the government about the provisions of the law that do not confer legal status on East Timorese customary land tenure systems or the traditional individualised land rights that have existed in East Timor since time immemorial.

Due regard should also be had to the potential implications of this draft, should it become law, for land disputes and conflicts in East Timor. Once occupants realise that any rights they gain will not be long as they are extinguished by the effluxion of time, there will be instability. As the hak guna bangunan or hak guna usaha rights gained through possession on state land (if that can be permitted in light of the general prohibition of possession against state pubic domain land and this is where all of the limited term hak guna usaha exist) or private full ownership rights expire when the terms run out, the land will revert to the formal ownership of the state or to the underlying documentary-evidenced complete right of ownership holder in the case that the right existed on private land. These rights will be found over nearly all residential land in Dili and most district centres as well as the prime agricultural and coffee plantation lands.

Occupants who have relied on long-term possession will be liable to eviction or demands for the payment of rent by their new landlords.

Land relations will be destabilised because there is no complete policy solution. A half-hearted and misconceived attempt at land reform is hinted at in the draft but it goes nowhere near the existing applicable Indonesian land reform laws and regulations – which will be, conveniently, avoided. It places the burden of compensation in an inappropriate vessel. It does not permit long term possession against the vast majority of land rights in East Timor. The full rights of ownership evidenced by a documentary title – either hak milik or propriedade perfeita – will continue to have complete lawfulness and legitimacy without the risk of any possessory extinguishment. There lies the true policy behind this draft.

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Footnotes

[1] Article 20 of the Basic Agrarian Law of 1960 defines hak milik:

(1) A hak milik (right of ownership) is the inheritable right, the strongest and fullest right on land which one can hold, subject to the provision contained in Article 6.

(2) A hak milik can change hands and be transferred to other parties.

Hak milik is the Indonesian equivalent of the English common law’s fee simple.

[2] The best available English language definition of the propriedade perfeita is in Indonesian Government Regulation No 18 of 1991 on the conversion of land rights in East Timor in accordance with the Basic Agrarian Law where article 1(2) provides as follows: “The right of “Propriedade Perfeita” is the land right under Portuguese law in East Timor, the character of which is complete and absolute, namely, the right to enjoy the produce and use of the land in a full and unrestricted manner provided that it is not in contradiction with the provisions of the law and the rights of other persons, which is evidenced by an “Alvara de Propriedade Perfeita” or in respect of which there was already a decision of the Portuguese Government before the coming into force of Law No 7 of 1976.” It is interesting to note also that the draft ignores the prima facie fact that all of the old Portuguese colonial land rights were extinguished by conversion into the Indonesian statutory rights under the Basic Agrarian Law of 1960. 2004 ETLJ 1 A Note on Land Rights in East Timor [Government Regulation no 18 of 1991 on the conversion of land rights in east Timor] & the Purported Suspension of Article 5 by Government Regulation no 34 of 1992.

[3] Interestingly, the draft land law makes no reference to the other lesser Portuguese right; arrendamento. It is defined in Article 1(4) of Indonesian Government Regulation No 18 of 1991 as follows: The right of “Arrendamento” is the land right under Portuguese law in East Timor which arises from a lease agreement to enjoy the use of State land with certain limitations and with the obligation to pay rent to the State which rent is referred to as "renda", which is evidenced by an “Alvara de Arrendamento” or in respect of which there was already a decision by the Portuguese Government before the coming into force of Law No 7 of 1976 and the land is still controlled by the right holder.

The draft also omits reference to another of the lesser Indonesian land rights - hak pakai (the right of use)

[4] Article 1(3) of Indonesian Government Regulation No 18 of 1991.

[5] Those who have been excluded from their land because of their political beliefs in recent times – families have had to move from areas dominated by one or the other “ethnic regional” group – have a legal basis for resuming the full exercise of their property rights by seeking the eviction of unlawful occupants who have been there for less than 20 years. But few would dare.

Warren L. Wright BA LLB (former Property Rights Adviser to the United Nations Transitional Administration in East Timor) 09 July 2009 First published on the East Timor Law and Justice Bulletin

Land Policy in East Timor - The Cart before the Horse

Original Citation: 2009 ETLJ 10 Land Policy in East Timor - The Cart before the Horse

The government seems intent on finding out who owns the land in East Timor without there being the sound foundations of a reformed land law or land right registration decree law. (see also the following posts in the East Timor Law and Justice Bulletin: Government to start land data collection in Liquica and Manatuto, East Timor Nationwide land data collection to start in East Timor and East Timor Ministry of Justice & DNTPSC Launch National Property Cadastre)

The question that arises is why should the government proceed in such an exercise before there is legal clarity about the status of the 40000 odd land rights (over most of the most valuable land in East Timor) created during the Indonesian occupation, or about the abolition of the Portuguese land rights created during the colonial period, or, even, indeed, about the status of land rights that exist over most of the national territory by virtue of local customary law.

The data collection program seems to be an odd approach based on a misinformed policy. It ought to have been preceded by a comprehensive land law that resolved the legal problems and one that provided for a proper process for land right ownership determination and recording that incorporated the judicial system in the event of disputes and conflicts - frequent and violent occurrences in East Timor's cities and the countryside.

The data collection exercises bring no clarity or certainty to the legal ownership of land in East Timor. This program is not being conducted in accordance with the conventional land right registration policies and laws. There was already a national claims registration process some years ago. It is a shame that so much money and resources are being consumed in this way. It will be a greater shame if it results in the unjust entrenchment of unverified claims and that carries the risk of further disintegration in the social relations in East Timor that relate to land.

Warren L. Wright BA LLB

02 May 2009

A Note on Land Rights in East Timor [Government Regulation No 18 of 1991 On the Conversion of Land Rights in East Timor and the Purported Suspension of Article 5 by Government Regulation No 34 of 1992

Original Citation: 2004 ETLJ 1

Introduction and Background

Paragraph 4 of the General Elucidation of Law No 7 of 1976 on the Legalisation of the Unification of East Timor into the Unitary Republic of Indonesia states that, upon integration, the People of East Timor become People and Citizens of Indonesia and all legislation of Indonesia applies in the territory of East Timor.

One law of Indonesia is the Basic Agrarian Law of 1960 (Law No 5 of 1960 on the Basic Principles of Agrarian Affairs – hereafter “the Basic Agrarian Law”). The main intent of the Basic Agrarian Law was to abolish the Dutch colonial land law which had continued to operate in Indonesia since independence in 1942 and to replace it with Indonesia’s own national land law. It repealed all of the principle Dutch land law  and all of the provisions of Book Two of the Civil Code “insofar as [they] pertain to soil, water, and the natural resources contained therein, with the exception of the provisions concerning hypotheek (mortgage) which are still effective at the time this act comes into effect”.

The Basic Agrarian Law asserted a new basis for Indonesia’s land law – its adat (customary) law, confirmed the State’s rights in relation to the control and allocation of land  and created a new regime of statutory rights. It also included provisions which converted the old Dutch land rights into the new statutory rights. Rights under the Dutch colonial laws which were analogous or similar to the new Indonesian statutory rights were converted into the corresponding Indonesian statutory rights. The Dutch eigendom land right, which was the most complete and strongest Dutch colonial land right in Indonesia, was converted into the Indonesian statutory Right of Ownership. The erfpacht right on large plantations became the Right of Business Enterprise with a term of 20 years and the opstal right and the erfpacht right for residential purposes became the Right of Use of Structures with a term of 20 years. Certain conditions were imposed on the converted statutory rights which required foreigners who held the converted rights to either release them to the State or transfer them to citizens within one year of the enacted of the Basic Agrarian Law. If these conditions were not complied with, the land right was cancelled and the land forfeited to the State.

As an implementing regulation of Law No 7 of 1976 and the Basic Agrarian Law, Government Regulation No 18 of 1991 on Provisions on the Conversion of Land Rights in the Province of East Timor in accordance with the Basic Agrarian Law (hereafter PP18) was enacted on 13 March 1991 and came into force on 1 July 1991.

The Considerations in the preamble of PP18 state as follows:

a. that with the merger of East Timor into the territory of the Unitary State of Indonesia as well as the legalization of the unification of East Timor and the formation of the Province of East Timor by Law No 7 Year 1976, all legislation of Indonesia, including Law No 5 of 1960 on the Basic Agrarian Law has applied in the territory of the Province of East Timor;

b. recalling that land rights under the law in force before the application of Law No 7 of 1976 are different to the rights under the Basic Agrarian Law, then within the framework of the implementation of the Basic Agrarian Law in the Province of East Timor, there needs to be an enactment of provisions on the conversion of land rights under the law in force before the coming into effect of Law No 7 of 1976 to land rights in accordance with the Basic Agrarian Law with attention to the relevant individual land rights.

The General Elucidation of PP18 reads as follows:

With the enactment of Law No 7 of 1976 on the Legalisation of the Unification of East Timor into the Unitary State of Indonesia and the Formation of the Province of East Timor the territory of East Timor formally became a part of the territory of the State of Indonesia. In accordance therewith, since that time, all legislation of Indonesia, including Law No 5 of 1960 on the Basic Agrarian Provisions has legally been in force in the territory of East Timor. In this regard, it is understood that the system of government as well as the land system which applied in East Timor before its unification into the State of Indonesia was very different from the system which applies in the territory of Indonesia. Land rights which applied were very different to the land rights under the Basic Agrarian Law, in regard to their creation as well as the substance of each of the said rights. For land which is directly controlled by the State, that is, land which is not yet encumbered with a right, the provisions of the Basic Agrarian Law can be directly applied, however, for land which is already encumbered with a right before the coming into force of Law No 7 of 1976 ( on 17 July 1976), those which were granted based on Portuguese law as well as those which existed based on adat law, there needs to be adjustments made in order to realise legal unity in the entire territory of Indonesia while still paying regard to rights as well as the holders of rights which already exist. For that purpose, there needs to be issued provisions which regulate the conversion of and rights which existed prior to the coming into force of Law No 7 of 1976 to become land rights under the Basic Agrarian Law. Because the legislation which regulates the said conversion is an implementation of Law No 7 of 1976 and, at the same time, is an implementation of Law No 5 of 1960, then the appropriate form of law is a Government Regulation.

Overview of PP18

Chapter 1 of PP18 defines what conversion of land rights means and contains definitions of the old Portuguese land rights.

Article 1 provides as follows:

1. The conversion of land rights in the Province of East Timor is the change of land rights which existed according to the land law applied in East Timor before the coming into force of Law No 7 of 1976 to become land rights according to the Basic Agrarian Law.

2.  The right of propriedade perfeita  is the land right under Portuguese law in East Timor, the character of which is complete and absolute, namely, the right to enjoy the produce and use of the land in a full and unrestricted manner provided that it is not in contradiction with the provisions of the law and the rights of other persons, which is evidenced by an “Alvara  de Propriedade Perfeita” or in respect of which there was already a decision of the Portuguese Government before the coming into force of Law No 7 of 1976.

3.The right of aforamento is the land right under Portuguese law in East Timor which arises from an agreement over State land where the Grantee of the right is given the authority to fully enjoy the use of the land with the obligation to pay to the State an amount of money referred to as “forro”, which is evidenced by an “Alvara de Concessao Definitif” or in respect of which there was already a definitive decision of the Portuguese Government before the coming into force of Law No 7 of 1976 and the land has not been surrendered by the right holder or his/her legal representative.

4.The right of “arrendamento”  is the land right under Portuguese law in East Timor which arises from a lease agreement to enjoy the use of State land with certain limitations and with the obligation to pay rent to the State which rent is referred to as “renda”, which is evidenced by an “Alvara de Arrendamento” or in respect of which there was already a decision by the Portuguese Government before the coming into force of Law No 7 of 1976 and the land is still controlled by the right holder.

The elucidation of Article 1 of PP18 states that [g]enerally, evidence of land rights which were granted by the Portuguese Government were documents which were referred to as “alvara”. Nevertheless, the land rights themselves already existed at the moment the Government issued a definitive decision. Therefore, for the purposes of conversion under this Government Regulation the relevant land rights must be evidenced by reference to the “alvara” or other document which indicates that there was already a definitive decision issued by the government about the relevant right.”

The Conversion Provisions of PP18

Chapter II of PP18 contains the operative conversion provisions in relation to both the old Portuguese land rights and customary land rights in East Timor.

Part 1 The Conversion of Portuguese Land Rights

Part 1 of Chapter II deals with the conversion of the old Portuguese land rights. This regulation is an extension of the principle contained in the Basic Agrarian Law of the conversion of all former colonial land rights. As Parlingdungan notes, “In Indonesia, there is only one system of agrarian or land law which is applicable without exception as has already been applied in other parts of the State of the Republic of Indonesia to former Western land rights, all are covered by the Basic Agrarian Law according to its conversion provisions and there is no exception whatsoever in any area”

Propriedade Perfeita

Article 2 converts the Portuguese propriedade perfeita into several different Indonesian statutory rights depending on whether the holder of the right was a citizen, a foreigner, a legal entity, representative of a foreign state, an international agency recognized by the government of Indonesia or a religious or social entity.

A propriedade perfeita, the holder of which was a citizen of Indonesia or a Religious Legal Entity or other Legal Entity referred to in the provisions of Government Regulation No 38 of 1963 , was converted into the Right of Ownership. Under the Basic Agrarian Law, only natural persons who were citizens and a very limited class of legal entities are permitted to hold the right of ownership .

If the holder of a propriedade perfeita the holder was a foreign citizen or legal entity, it was converted into:

a. a 25-year Hak Guna Usaha  if the land was agricultural land;

b. a 20-year Hak Guna Bangunan  if the land was non-agricultural land.

The propriedade perfeita, the holder of which was a representative of a foreign state, an international agency which was recognized by the Government and which had representation in Indonesia, or a religious entity that used the land for the direct support of the observance of religious duties or religious activities of the relevant religion, was converted into a Hak Pakai  which was valid for so long as the relevant land was used for those purposes. In respect of religious entities, the propriedade perfeita could only be converted into a Hak Milik if the land was used, not merely for the support of religious observances or religious activities, but for “the direct needs” of the religion; such as church, mosque, shrine and the like. If the land were used for other activities such as schools, residences for its religious leaders, etc., then the land was converted into the lesser right of Hak Pakai.

[The Catholic Church is one religious entity affected by these provisions and the diminution of any propriedade perfeita which it held in East Timor which was not used for churches, seminaries, and the like.]

Aforamento

Article 3 deals with the conversion of the Portuguese aforamento right.

The aforamento was converted into either a Hak Guna Usaha with a time period of 25 years if the land was agricultural land or a Hak Guna Bangunan with a period of 20 years if the land was not agricultural land.

If the holder of the aforamento was held by a representative of a foreign state or an international agency which was recognized by the Government and had representation in Indonesia or a religious or social entity and the land is used for the direct needs of the observance of religious duties or religious activities of the religion or the social activities of the relevant entity, the aforamento was  converted into a Hak Pakai  with a validity “for as long as the land is used for [those] activities.

Although not stated in the regulation, the conversion of the aforamento into the Hak Guna Usaha or Hak Guna Bangunan only applied if the aforamento was held by a citizen or Indonesian legal entity. The provision does not deal with the situation of an aforamento held by a foreigner of foreign legal entity but is must be inferred that in these instances, the aforamento was converted into a Right of Use for so long as the land is used for the original intended purpose.

Arrendamento

Article 4 converts the arrendamento right.

The arrendamento was converted into a Hak Pakai if the holder of the arrendamento was an international agency which was recognized by the Government and had representation in Indonesia. The Hak Pakai remained valid only for so long as the land was used by that international agency.

If the arrendamento was held by a citizen of Indonesia, a foreigner resident in Indonesia, a legal entity which has been incorporated under Indonesian law and which is domiciled in Indonesia or a foreign legal entity which had representation in Indonesia, it was converted into a Right of Use with a term of 10 years.

Portuguese Land Rights No Longer Exist in East Timor

The fundamental result of these conversion provisions of PP18 is that the old Portuguese land rights no longer exist in East Timor. By this law, they were obliterated  and changed into the statutory rights under the Basic Agrarian Law as described above on the date that the regulation came into effect; namely, 1 July 1991. Where the Portuguese rights were converted into the statutory rights of Hak Guna Usaha and Hak Guna Bangunan with limited terms of 25 and 20 years respectively, those rights will expire by efflux ion of time on 30 June 2016 and 30 June 2011. The arrendamento rights converted into the Hak Pakai with a term of 10 years by Article 4(2) have already ceased to exist, having expired on 30 June 2001.

Requirement to Relinquish or Transfer certain converted Rights held by foreigners

Article 5 of PP18 is perhaps the most controversial of the provisions of PP18 although the Article itself merely reiterates the provisions of the Basic Agrarian Law. It restated the requirements in the Basic Agrarian Law that the Hak Guna Usaha and the Hak Guna Bangunan  which resulted from the conversion of the propriedade perfeita and the aforamento by Articles 2 and 3 of PP18. If those rights were held by a foreigner or foreign legal entity, they had to be relinquished to the State or transferred to a citizen or Indonesian incorporated legal entity within one year of the coming into force of PP18; that is, within one year of 1 July 1991. If those rights were not so relinquished or transferred, then they were cancelled and the land reverted to the State (land directly controlled by the State) subject only to the general qualification that “the rights of other parties which encumber it will be respected and regulated separately.”

Of course, this requirement was practically impossible to comply with since almost all foreigners or foreign legal entities had fled East Timor either during the civil war in mid-1975 or when Indonesia invaded in December 1975 and scarcely any, if any at all, would have returned to comply with this requirement, presuming that they had become aware of it because of the security situation in East Timor following the invasion. It would have been theoretically possible for those foreigners and foreign legal entities to grant a power of attorney to someone in Indonesia to effect the relinquishment or transfer.

The Purported Suspension of Article 5 of PP18

In the midst of the continuing intense international pressure and criticism of Indonesia over its invasion and integration of East Timor and accusations that the Indonesian government was nationalizing the assets of foreigners in East Timor, Government Regulation No 34 of 1992 was enacted to purport to suspend the provisions of Article 5 of PP18. However, Regulation No 34 of 1992 can not be an effective or awful regulation.

Article 5 of PP18 provides that:

(1) The Right of Business Enterprise and the Right of Use of Structures referred to in Articles 2 and 3, the holder of which is a foreign citizen or foreign Legal Entity must be surrendered or transferred to another party who fulfills the conditions for being the holder of the relevant land rights according to the Basic Agrarian Law within the time limit of one (1) year counted from the date of the coming into force of this Government Regulation.

(2) If the release of the right or the transfer of the rights referred to in paragraph (1) is not undertaken, the said land rights are void by force of law and the land will become land directly controlled by the State with the provisions that the rights of other parties which encumber it will be respected and regulated separately.

Government Regulation No 34 of 1992 on the Suspension of the Provisions of Government Regulation No 18 of 1991

Regulation No 34 of 1992 purported to suspend the operation of Article 5 of PP18. The Considerations section of this regulation stated that:

a. Government Regulation No 18 of 1991 has determined provisions on the Conversion of Land Rights in the Province of East Timor according to the Basic Agrarian Law;

b. to ensure that the implementation can be implemented smoothly and orderly, the implementation of it needs to be done in a staged way; and

c. in the framework of the staged implementation referred to above, it is necessary to delay the implementation of the provisions on conversion in relation to land in respect of which the right is held by foreigners or foreign corporations.

But the elucidation in Article 5 of PP18 explains that:

The provisions of this article are in accordance with the provision in Article 30 paragraph (2) and Article 36 paragraph (2) of the Basic Agrarian Law .

Under these provisions of the BAL, citizens who lost their Indonesian citizenship or who acquired a second citizenship were required to relinquish the rights to the State or transfer them to a citizen within one year of the loss of citizenship or the acquisition of a second citizenship.

Article 1 of PP34 provided that:

The provisions on the time limits for the conversion of land rights which are held by foreign citizens or foreign corporations as regulated in Article 5(1) of Government Regulation No 18 of 1991 Re Conversion Provisions for Land Rights in the Province of East Timor according to the Basic Agrarian Law are delayed until a time which will be further determined by Presidential Decision.

Invalidity of Article 1 of PP34

There are two fundamental and substantive problems with this provision. The first is that it refers to the “provisions on the time limits for the conversion of land rights held by foreign citizens and foreign corporations as regulated in Article 5(1)” of PP18. However, there are no such provisions in Article 5(1) of PP18. Article 5(1) deals with the issue of the requirement for foreigners or foreign legal entities who, as a result of the conversion of the Portuguese land rights they held at the time of the enactment of PP18 became rights which had to be surrendered to the State or transferred to an Indonesian citizen or legal entity which fulfilled the requirements imposed by the Basic Agrarian Law to hold those rights. Such surrenders or transfers had to be effected before 01 July 1992. The one year time period expired at the end of 30 June 1992 and if the surrenders or transfers had not been effected by then, then the rights were forfeited and the land became State land in accordance not only with Article 5 of PP18 but, more importantly, in accordance with the provisions in Articles 30 and 36 of the Basic Agrarian Law. So the drafting of Article 1 of PP34 of 1992 is completely and utterly erroneous and is, therefore, a meaningless and invalid provision.

But there is an even more critical aspect of Article 1 of PP34 which renders it a void provision. This article is contained in a Government Regulation which seeks to suspend not only the provisions of Article 5 of PP18 but also the substantive principles of the Basic Agrarian Law. A Government Regulation may amend another Government Regulation. But a Government Regulation can not operate to suspend the provisions of a higher level legislation such as a Law (Undang-Undang).

The general hierarchy of law-making instruments in the Indonesian legal system, in descending order of force, is as follows:

1. Constitution (Undang-Undang Dasar)

2. Law (Undang-Undang)

3. Government Regulation (Peraturan Pemerintah)

4. Ministerial Regulation (Peraturan Menteri).

Just as a Law can not override the provisions of the Constitution, neither can a Government Regulation override the provisions of a Law. Nor can a Ministerial Regulation override the provisions of a Government Regulation.

Accordingly, because Article 1 of PP34 of 1992 purports to suspend the operation of provisions of the Basic Agrarian Law, it is not a valid provision. PP34 is an unlawful provision because it is ultra vires and must be struck down. It was beyond the legitimate legislative competence of the President to enact this provision. The only way the provisions of Article 5, and, therefore, the provisions of Articles 30(2) and 30(6) of the Basic Agrarian Law could have been suspended would have been through a Law (Undang-Undang) enacted by the People’s Representative Assembly of Indonesia. It was beyond the President’s legislative powers to enact Article 5 of PP18.

Consequently, the provisions of Article 5(1) of PP 18 must be considered to be lawful and valid. As the elucidation of Article 5 states: “The provisions of this article are in accordance with the provision in Article 30 paragraph (2) and Article 36 paragraph (2) of the Basic Agrarian Law.” Therefore, any loss of rights by foreigners that occurred by the operation of this Article, or, more correctly, by the operation of Articles 30(2) and 36(2)  of the Basic Agrarian Law, occurred on 30 June 1992 and the land, upon that date, became State land.

An observation by a leading Indonesian land lawyer, Parlindgungan, about the purported suspension of Article 5 of PP18 was that “ the problem of the delay of the said Article may also be considered form the political aspect because there  are those parties who do not want integration raise the issue that the Government of Indonesia is implementing confiscation of land rights owned by foreigners or foreign legal entities as well as the Catholic church which owns a lot of assets in the form of land and feel that there is a change in their ownership which they have controlled for many years” .

Conversion not dependent on Registration

It should also be pointed out that the conversion of the old Portuguese land rights was not dependent on the registration of the conversion by the National Land Agency. Registration neither created the right nor conferred any additional substance or validity to it. Registration was a mere administrative act which generated evidence of the existence of a right and of the identity of the right holder.  That is also one of the reasons described above why Article 5 of PP18 was also defective. It was drafted in terms of the time permitted to foreigners to register the conversion. But the conversion of the old Portuguese rights occurred upon the coming into force of PP18 on 1 July 1991 by virtue of the operation of Regulation and had nothing to do with registration. Under the negative land right registration system adopted in Indonesia under Article 19 of the Basic Agrarian Law, registration had no other function – it was declarative only. This was confirmed also by several decisions of the Indonesian Supreme Court.

Is PP18 void for other reasons

The only other ground upon which it might be argued that PP18 is of no effect would have to be based on the exceptions to the application of Indonesian law in East Timor which was effected by UNTAET, the Constitution, Law No 2 of 2002 on the Interpretation of the Applicable Law as at 19 May 2002.

The applicable law of East Timor, as from 25 October 1999 is based upon the Indonesian law by Section 3 of UNTAET Regulation No 1 of 1999 on the authority of the Transitional Administration in East Timor , by Article 165 of the Constitution of the Democratic Republic of East Timor , Law No 2 of 2002 on the Interpretation of the Applicable Law as at 19 May 2002, and by Law No 9 of 2003 on the Interpretation of Article 1 of Law No 2 of 2002 and Sources of Law.

The exceptions to the Indonesian-based applicable law of East Timor are:

a. those laws of Indonesia which, by Section 3(1) of UNTAET Regulation No 1 of 1999 “conflict with the standards referred to in section 2 , the fulfillment of the mandate given to UNTAET under United Nations Security Council resolution 1272 (1999), or the present or any other regulation and directive issued by the Transitional Administrator”; and

b. those laws which are inconsistent with the Constitution  or the principles contained therein.

Nothing in the provisions of the Basic Agrarian Law, PP18 or the Constitution of RDTL falls within these exceptions. Under international law, a State may enact laws relating to the forfeiture of land rights in its territory held by foreigners provided that compensation is paid or an adequate opportunity is provided in the law for the foreigners to transfer the rights to a citizen of that State. This opportunity was provided for in Article 5 of PP18 and also exists in the relevant provisions of the Basic Agrarian Law.

Conclusion

Article 5 of PP18 is a valid provision; being a reiteration of the provisions of the Basic Agrarian Law and any right lost by foreigners under that Article are gone.

PP34 of 1992 is an unlawful regulation and its purported suspension of Article 5 of PP18 should be held to be of no effect.

Warren L. Wright

Dili, 28 February 2004