NEWS DETAIL

04 Mar 2021
Indonesias Electronic Land Registration to Boost Ease of Doing Business and Enhance Legal Certainty

 

The National Land Agency (Badan Pertanahan Nasional / “BPN”, Indonesia’s national land registry) is currently in the process of rolling out a raft of new electronic-based land and title registration services. Initially, in 2020, BPN commenced the digitization and integration of 3 formerly conventional services:  electronic charge/mortgage registration (abbreviated as HT-El); land title searches (through the issuance of Land Registration Status Declarations (Surat Keterangan Pendaftaran Tanah / SKPT); and the provision of information on land values through the land-value zone (ZNT) mechanism.

 

As part of this process, on 12 January 2021 the Ministry of Agrarian Affairs (of which BPN is a unit) issued a new regulation (“Reg. 1/2021”)[1], which addresses the following aspects: 

 

  1. Electronic land registration;
  2. Electronic land certificates (“ELCs”);
  3. Recognition of ELCs as legally admissible evidence.

 

Electronic Land Registration

 

Reg. 1/2021 provides that the land registration process will be gradually automated, with ELCs henceforth to be issued for land registered for the first time or where old paper certificates are exchanged for their digital counterparts.

 

Ultimately, it is expected that all data, information and documentation related to land, such as scale diagrams (gambar ukur), land parcel maps (peta bidang tanah), spatial maps (peta ruang) and ELCs will be processed and stored electronically.

 

ELCs

 

Under Reg. 1/2021, once a plot of unregistered land is made subject to: (i) a land title (hak atas tanah), (ii) management right (hak pengelolaan), (iii) strata title (hak milik atas satuan rumah susun), (iv) a charge or mortgage (hak tanggungan), or (v) waqf (land bequeathed or donated for charitable purposes under Islamic law), the land will be registered electronically and an ELC issued for it.

 

Paper certificates (issued prior to Reg. 1/2021) may be exchanged for an ELC upon application to the National Land Agency.

 

An ELC will be issued if the physical and legal data contained in the land book and paper certificate conform to that held in BPN’s electronic records. Once granted, paper certificates will be scanned and retained in BPN’s database.

 

ELC as Legally Admissible Evidence

 

Reg. 1/2021 confirms that electronic land documents (and printouts thereof) are legally admissible evidence in court. 

 

ABNR Commentary

 

As anyone who follows Indonesian affairs will know, the country’s land registration system has long left a lot to be desired, with complaints of egregious forgeries of land certificates and all manner of frauds and shady dealings regularly making the headlines. Thus, the switch to e-land services is likely to be universally welcomed, except, of course, by those unscrupulous operators who benefit from the inefficiencies of the existing system.

 

Overall, the initiative should afford significantly greater legal certainty, ease and convenience for all involved, and thus help to further boost Indonesia’s ease-of-doing-business ranking.

 

However, as always, the potential for new forms of fraud is ever present. For example, the accuracy of ELCs will be entirely dependent on adequate verification prior to their issuance. So, once again, the human factor will play a significant role in determining the success of the system. 

 

Further, what appears on the pages of the laws and regulations and what happens on the ground can often be too very different things in Indonesia. So, while e-land services will no doubt quickly become available in Jakarta and other big cities, it might take considerably longer for them to reach more remote parts of the country as a result of budgetary and human-resources constraints. Thus, in order for the system to be truly effective, secure and capable of operating nationwide, the provision of significant funding and training will be of the utmost importance.

 

By partners Ms. Rita Tyastuti Taufik (rtaufik@abnrlaw.com) and Mr. Ayik Candrawulan Gunadi (agunadi@abnrlaw.com), and senior associate Mr. Rio Armando Girsang (rgirsang@abnrlaw.com).  

 

[1] Minister of Agrarian Affairs and Spatial Planning / Head  of the National Land Agency Regulation No. 1 of 2021 on Electronic Land Certificates (Peraturan Menteri Agraria dan Tata Ruang/ Kepala Badan Pertanahan Nasional No. 1 Tahun 2021 Tentang Sertipikat Elektronik)

 

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.