Many Expats in Bali and Lombok where unsettled and frightened by the prospect to be possibly subject to legal proceedings and/or maybe even losing their investment following the Minister’s statement. I would like to say: The dust has settled,- maybe for good?
Because since the initial statement, legal experts in Indonesia and overseas, as well as the Indonesian Government, had time to think –and we haven’t heard anything from them since. It is indeed fair to assume that the Ministry of Agraria is in detail considering the implications of the proposed action, because -
- They might have realized that the private investor mood would be seriously hit. There are more than just a handful of foreigners operating substantial businesses here, almost all of them established and living on private property too.
- Next, how to go about finding out which properties, registered under Indonesian names would in fact be related to foreigner’s interest? Would Notaries be summoned to disclose any Nominee agreement ever made? This seems highly improbable and in any case would lead to an administrative nightmare and a legal disaster, because the net would have big holes due to the nature of things being frequently (mis)-organized.
- Furthermore we heard that the Indonesian law does not provide a legal base to criminalize the involved parties. (read more in the following comments).
- Finally, the Minister was softening up his strong position by saying that everyone has a chance to rectify their legal situation, before any Government action will be taken. There was talk of a grace period of 18 month, leading to mid 2016.
I remember that in 2009 there was a similar announcement made by the Indonesian Land Department, albeit more mild in the wording, but meaning the same: Foreigners are not allowed to own or control freehold property in Indonesia, and have to stop at once trying to circumvent the law. - Then for the following 5 years nothing was heard again.
However, this time around it could be different. The new ministers were selected by President Jokowi for their active and successful roles in past professions or organizations. Also the stronger nationalist factions may insist on pushing the move ahead, which then may well grind to a halt, due to political differences.
In order to find out what our clients and in general foreign investors have to expect, I made in March an appointment for April with the office of the Secretary of the Minister of Agraria, Ferry Mursyidian Baldan, to clarify things there in Jakarta.
The idea was to understand what is in the Governmental pipeline and at the same time to ask about when to receive clarification on several issues, e.g. the Governments intentions after 70 years of Hak Pakai ownership have passed (at present the law is silent on this) and to raise awareness of the challenges to the Government should there be a ’go ahead’ in following up on nominee agreements in order to restore lands back to the state.
On seconds thoughts I later cancelled the visit.
The reason: If the dust may have settled for good, why risk waking the dogs?
Too many foreigners interest are at stake. No dust cloud.
My promise to you: As soon as we hear anyone (Government, Notaries, Chamber of Solicitors, etc.) talking about any new related development, you’ll be the first to know by email.
Following I picked up some interesting opinions on the issue. Some comments have been cut short, but again, this is not about offering new facts, this is about keeping us all on our toes and remind you to look out for news (if any).
