Property owners want fair compensation for land acquired for Indonesia’s new capital

For nearly two decades, Kamarudin tended to his 2.8-hectare (7-acre) plantation in East Kalimantan province, nurturing rows of rubber trees, oil palms, and fruit crops. 

He inherited the land in Maridan, a village located 15.4 kilometers (9.56 miles) from the site of the project to build Indonesia’s new capital that will replace Jakarta. 

Kamarudin used to earn a steady monthly income of about 4 million rupiah (U.S. $260) from farming the land. 

But his life took a sudden turn in early 2023 when the central government’s Land Bank Authority– without warning – cleared large sections of his farm, causing yet another dispute around land and the preservation of livelihoods tied to the nation’s future capital, Nusantara. 

“I was furious when I saw what they’d done,” Kamarudin, 62, told BenarNews, recalling the morning his plantation was razed. 

The government compensated him 1 billion rupiah ($63,000) for the land five months after clearing it, but he said he hadn’t yet been paid for his crops.

“The land bank stole it,” said Kamarudin, holding up a 2017 land certificate affirming his family’s management rights dating back to 1955.

However, the state agency has the power of eminent domain, allowing it to acquire land for public use from private owners without their consent, as long as it compensates the owners.

The Land Bank Authority was set up in 2021 to streamline land acquisition for public projects, including Nusantara. 

Kamarudin’s case is symptomatic of the challenges the Indonesian government faces in balancing large-scale development with the rights of local communities, activists say.

In East Kalimantan alone, the agency manages more than 4,000 hectares, much of which is being repurposed for infrastructure such as the new city’s airport and toll roads.

Nusantara is envisioned as a solution to Jakarta’s overcrowding and environmental woes. The $35 billion project initiated by former President Joko “Jokowi” Widodo aims to create a sustainable and smart city.   

The new city is intended to accommodate 1.9 million people on a 260,000 hectare expanse of Borneo island, with completion targeted for 2045.

While construction has accelerated in recent years – roads, bridges, and government offices are nearing completion – the project has been mired in challenges. 

In addition to land disputes, a lack of investment, and fears over the ecological impact on Borneo’s biodiversity have dogged its progress.

The head of Indonesia’s Land Bank Authority, Parman Nataatmadja, defended the agency’s work.

“We are here to provide a solution for resolving agrarian conflicts,” Parman said in a written statement to BenarNews. 

“For investors, we guarantee that the land is clean and clear, while respecting community rights,” he added, essentially saying the agency tried to provide land not subject to any legal disputes.  

He acknowledged that the agency was facing challenges in executing its mandate. 

“There are gaps in understanding between the agency and local communities, requiring constant communication to align perceptions,” he said.

‘Persuasive methods’

Activists and observers, however, question the land agency’s approach. 

Husen Suwarno, an activist with the East Kalimantan Coastal Working Group, said the Land Bank’s actions amounted to state-sanctioned land grabbing. 

He argued that land disputes had arisen because communities were displaced by projects that the Land Bank Authority supports, such as the Nusantara airport and a toll road connecting Nusantara to Balikpapan, the nearest city. 

“In practice, they are seizing land in the name of the state through the Land Bank Agency,” Husen told BenarNews.

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In late November, dozens of residents from Pemaluan, a village near Nusantara’s administrative center, gathered at the local office to protest what they said was unjust compensation for the land acquired from villagers for two toll road sections. 

Compensation rates offered by the government ranged from 145,000 rupiah to 218,000 rupiah ($9.30 to $14) per square meter (10.76 feet).

Many locals said the rate was too low and did not reflect the value of the land or its agricultural productivity.

“We don’t agree with the offered price,” said Abdul Kahar, head of the local neighborhood association. 

He said residents had been pressured into accepting the terms through threats of legal action, which could be complex and expensive.

“When they mention court proceedings, people just comply,” Kahar added.

However, the land agency head Parman said the agency had implemented monitoring systems, including inventory and mapping of land use, to prevent misuse or overlapping claims. 

“If conflicts arise, we resolve them through persuasive methods,” he said.

However, the land agency head Parman said the agency had implemented monitoring systems, including inventory and mapping of land use, to prevent misuse or overlapping claims. 

“If conflicts arise, we resolve them through persuasive methods,” he said.

Yet disputes remain. 

Experts said that the government must adopt a more equitable approach to land acquisition. 

Trubus Rahadiansyah, a public policy analyst at Trisakti University, called for independent assessments to determine compensation at market value rather than government-determined rates.

“This is essentially a sale and purchase process,” he said. “There must be negotiations, not confiscations.”

Meanwhile, Kamarudin, the farmer, said he was struggling to rebuild his life and did not know when – or if – he would receive the promised compensation for his crops. 

Even if he was compensated, Kamarudin said he feared he would spend the money on daily necessities amid the bloated cost of living, and not to invest in new farmland.

“They said it would be paid in stages,” he said. “But there has been no news about it.”

Pizaro Gozali Idrus in Jakarta contributed to this article.