Ilyas, Anshori and Hamzah. “Administrative Land Conflicts and Reforming
State-Owned Enterprises in Indonesia,” Hasanuddin Law Review 8 no. 2
(2022): 186-193. DOI: 10.20956/halrev.v8i2.2362

HasanuddinLawReview
Volume 8 Issue 2, August 2022
P-ISSN: 2442-9880, E-ISSN: 2442-9899
This work is licensed under a Creative Commons Attribution 4.0 International License

Administrative Land Conflicts and Reforming StateOwned Enterprises in Indonesia
Anshori Ilyas1, Hamzah2
1 Faculty of Law, Hasanuddin University, Indonesia. E-mail: anshoriilyas@yahoo.com
2 Faculty of Law, Hasanuddin University, Indonesia. E-mail: hamzah@unhas.ac.id

Abstract: Land control and ownership contain the emergence of legal norms including authority,
rights, and obligations, as well as power. In juridical, it is a system aiming to protect and encourage
values that are strongly embraced by the community. This study presents an up-to-date survey on the
conflict between state-owned enterprises (SOEs) and the community in Indonesia. Normative and
empirical approach were used in this study. The results showed that state-owned enterprises are more
subject to institutional pressures that arise from a weak authority of “state ownership”. This weak
authority is developed through the combination of ideological conflicts, perceived threats to national
security, and claimed unfair competitive advantage. The results not only extend the institutional
theory to explain differential effects on entrants but also demonstrate how foreign investors of
idiosyncratic origins proactively build authority in host countries.
Keywords: Administrative Law; Land Reform; Land Conflict; State-Owned Enterprises

1. Introduction
In host countries, state-owned enterprises are more subject to institutional pressures
that arise from the weak authority of 'state ownership'.1 This weak legitimacy is
developed through a combination of ideological conflicts, perceived threats to national
security, and claimed unfair competitive advantage. The State as a powerful organization
has the authority to make arrangements regarding human and land relations.2
Concerning land tenure, authority is categorized into two parts including general and
special. The general part is the holder authorized to directly use their land in line with the
legislation, while the special is the holder authorized to use the land for the interests of
agriculture, plantations, fisheries, and husbandry.3
Land control and ownership contain the emergence of legal norms including authority,
rights, and obligations, as well as power. In juridical, it is a system aiming to protect and
1
Meyer, Klaus E., Yuan Ding, Jing Li, and Hua Zhang. "Overcoming distrust: How state-owned
enterprises adapt their foreign entries to institutional pressures abroad." In State-Owned Multinationals,
pp. 211-251. Palgrave Macmillan, Cham, 2018.
2
Li, Tania Murray. "Commons, co-ops, and corporations: assembling Indonesia’s twenty-first century
land reform." The Journal of Peasant Studies 48, no. 3 (2021): 613-639.
3
Santoso, Urip. Hukum Agraria dan Hak-hak atas Tanah, (Jakarta: Kencana Prenada Media Group,
2010), p. 82.

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encourage values that are strongly embraced by the community. Sociology views land
control and ownership as the authority to use land which is limited by the public interest.
Therefore, it is an authority that provides a person or group the right to manage land.
The non-fulfillment of these values tends to trigger problems such as inequality,
perceptions, and conceptions of land, as well as incompatibility of legal products that
arise due to pragmatism and sectoral policies.4 This is in line with Cohen’s view5 that legal
relations bring about cooperation and conflict. Cooperation occurs when the agrarian
subject is willing to formulate an agreement regarding different interests and claims over
the objects. Meanwhile, conflict occurs when there are overlapping claims regarding
agrarian objects.6
Several efforts to avoid issues are carried out through the formation and renewal of laws
that serve as a reference in organizing land control and ownership. State-owned
enterprises have led to an imbalance or triggered the birth of conflicts that occurred in
South Sulawesi Province, Indonesia. This includes;
a. The conflict between PT. Perkebunan Nusantara (PTPN) XIV and Gowa & Takalar
regencies.
b. The conflict between PT. Perkebunan Nusantara (PTPN) XIV and East Luwu.
c. The conflict between PT. Perkebunan Nusantara (PTPN) XIV and Wajo regency
d. The conflict between PT. Perkebunan Nusantara (PTPN) XIV and Enrekang
Prolonged conflict between PT. PTPN IV with several districts in South Sulawesi, Indonesia
shows that no resolution mechanism meets the principles of justice, legal certainty, and
benefits for the parties to keep the land for agrarian purposes. In the Basic Agrarian Law,
the affirmed legal substance is not capable of resolving the issue due to reality
abandonment.7 Government Regulation No. 10 of 2010 strengthens state-owned
enterprises to provide inequality related to land tenure that deviates from the people's
greatest prosperity.8 The issue that later emerged was the inability of the legal substance,
structure, and culture to protect Indonesian land.
Litigation and non-litigation which failed to provide resolution with legal certainty are
other phenomena related to the state-owned enterprises' assets. However, conflict
resolution creates uncertainty through the courts as the last action that is performed by
the community. This is indicated from the Supreme Court Decision No. 4008 K/PDT/2001
in the case of PT. Pelabuhan Indonesia I Belawan against Sakdymah and colleagues. The
4

Collins, Ngan, Sari Sitalaksmi, and Russell Lansbury. "Transforming employment relations in Vietnam
and Indonesia: case studies of state‐owned enterprises." Asia Pacific Journal of Human Resources 51, no. 2
(2013): 131-151.
5
Astami, Emita W., Greg Tower, Rusmin Rusmin, and John Neilson. "The effect of privatisation on
performance of state‐owned‐enterprises in Indonesia." Asian Review of Accounting, 18 (1) (2010): 5-19.
6
Sitalaksmi, Sari, and Ying Zhu. "The transformation of human resource management in Indonesian
state-owned enterprises since the Asian Crisis." Asia Pacific Business Review 16, no. 1-2 (2010): 37-57.
7
Assagaf, Aminullah, Etty Murwaningsari, Juniati Gunawan, and Sekar Mayangsari. "Estimates model
of factors affecting financial distress: evidence from indonesian state-owned enterprises." Asian Journal of
Economics, Business and Accounting 11, no. 3 (2019): 1-19.
8
Sakai, Minako. "Land dispute resolution in the political reform at the time of decentralization in
Indonesia." Antropologi Indonesia 68 (2002): 40-56.

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case cannot be implemented by the District Court of Medan because the object to be
executed is state-owned enterprises' assets. It is difficult to expect legal certainty in
resolving land conflicts when the decision failed to be executed through mediation. There
is an absence of a concept to resolve issues over the state-owned enterprises' asset that
was controlled by the community. Therefore, this study aims to examine land conflicts
over State and Regional-Owned Enterprises assets.

2. Method
This study is normative-legal because it uses statute, case, and conceptual approaches. 9
Data were analyzed through a descriptive qualitative and content method. A qualitative
method was used to generate words rather than numbers.10 An observation and
interpretation approach was used to make these phenomena observable. Therefore, this
study provides information on the latest trend.

3. Asset Status of State-Owned Enterprises: Record-Keeping and
Legalization of State Assets
The State has two forms of wealth including separated and non-separated assets. The
separate one is the use of money sourced from the State Revenue and Expenditure
Budget as well as contracts grants/donations based on statutory regulations or court
decisions. This form of asset is obtained through equity participation in State-Owned
Enterprises or other Limited Liability Companies or Government Legal Entities. The
separated one can come from the State budget or outside such as loan capitalization. 11
Based on the two forms of assets explained above, the State acts as regulator and
executor. In Indonesia, the presence of state-owned enterprises cannot be separated
from the long history of configuration and principles that have developed since the 20 th
century. There is a development of the welfare state due to the transition from
rechtsstaat with the principle of nachtwacherstaat (night watch state) which uses
staatsonthouding or restrictions on governmental roles in the political field. The less
government becomes the best because of the principle of laissez faire and laissez aller,
which prohibits the State from interfering in the economic life of the community.
This principle negatively affects people’s lives in terms of misery and it triggers the
development of a concept to enable the government to become fully responsible for the
community's welfare. Staatsbemoeinis is the principle used because it requires the State
to be actively involved in the economic and social life.12 According to Friedmann, the
9
Irwansyah. Penelitian Hukum: Pilihan Metode dan Praktik Penulisan Artikel. (Yogyakarta: Mirra
Buana Media, 2020), p. 162-164.
10 Patton, M.Q., and Cochran, M. (2007). A Guide to Using Qualitative Research Methodology,
Medecins Sans Frontieres, UK.
11 Sihombing, B.F. Evolusi Kebijakan Pertanahan dalam Hukum Tanah Indonesia. (Djambatan: Jakarta,
2005). p. 45
12 Kamal, Miko. "Corporate governance and state-owned enterprises: a study of Indonesia's code of
corporate governance." J. Int'l Com. L. & Tech. 5 (2010): 206.

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governmental role in promoting the community's welfare is closely related to four
functions including the State as a provider, a regulator, an entrepreneur, and an umpire.
The presence of state-owned enterprises becomes a concretization of the State's
function as entrepreneurs. It shows that this enterprise serves as a means for the
government in realizing social welfare. Therefore, the implementation of equity becomes
an integral part of achieving goals such as justice and the Welfare State. 13
The use of the State’s assets through equity is one of the governmental efforts in
achieving social welfare. This shows capital participation becomes an effort to realize
social justice with a populist dimension when it is related to the theory of justice
emanated by John Rawls. The role of the State as a regulator through equity shows that
Indonesian land can truly realize the people's greatest prosperity. Furthermore, the
separation of the State’s assets affects the administrative changes in land control and
ownership. The government becomes a shareholder through equity participation when
it owned the property.14 Land abolition is the transfer of full authority to state-owned
enterprises to manage the land and ensure it contributes to developmental goals. Asset
legality through the issuance of land rights certificates to state-owned enterprises is one
of the efforts to realize certain goals. This gives the enterprises the same obligations as
humans as rights holders in land ownership and control. The true nature of legal certainty
lies in the strength of these certificates as proof of ownership.
In Indonesia, there are several land statuses, including customary land rights, Swapraja,
and ex. Swapraja, as well as State land. The Basic Agrarian Law specifies that land rights
are granted to provide certain guarantees through registration performed on the status
of the assets. To be granted a right, state-owned enterprises need to comply with the
proper procedure and ensure their usage does not conflict with the National and Regional
Spatial Plans. This is in line with the increase in the human population which causes a high
demand for land.
The realization of legal certainty guarantees for land rights certificates is influenced by
the subjects of rights.15 The certainty of the subject plays an important role in showing
the party that has the land ownership control. Therefore, the elements to be investigated
are related to the identity of the subject, domicile, occupation, citizenship, and others.
From the aspect of legality, the holder of the rights listed in the certificate is a legal entity.
This is different from the registration of land rights for the State’s assets where the holder
is the Indonesian government. The differences clearly show that the land is not an asset
of the State. Furthermore, physical control is a determining factor in the relationship
between land and the subject of its rights.

13

Kim, Kyunghoon. "Using partially state-owned enterprises for development in Indonesia." Asia
Pacific Business Review 25, no. 3 (2019): 317-337.
14 Nurdin, Iwan. "Resolving agrarian conflict through implementation of land reform by collaboration
of CO and local government in Indonesia." In World Bank Conference of Land and Poverty, Washington DC.
2014.
15 McLeod, Ross H. "The struggle to regain effective government under democracy in
Indonesia." Bulletin of Indonesian Economic Studies 41, no. 3 (2005): 367-386.

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In terms of administrative, legality, and physical control, the state-owned enterprises'
assets are not owned by the State. These types of assets can be used as an abandoned
land subjects because they are confiscated by the court.

4. Mechanism of Land Conflict Resolution for State-Owned Enterprise
Assets in Community Control
Conflict is an undeniable condition that has occurred in various forms. It is also a land
dispute involving several parties and has the potential to have a wide impact.16 Stephen
P. Robbins17 argued that conflicts arise because there are antecedent conditions. These
conditions are categorized into 3 including communication, structure, and personal.
Conflict is always centered on goals to be achieved, allocation of shared resources,
decisions taken, and the behavior of each party involved.
In South Sulawesi Province, issues over state-owned enterprises' assets have occurred for
years and are yet to reach a settlement that can provide a major role in achieving legal
objectives. Several conflicts over land have occurred between the community and PTPN
XIV. Examples are:
1. Conflict asset of PTPN XIV in Wajo regency. This conflict occurred in HGU No.
00001/Wajo due to an overlapping location of PTPN XIV with UPT Bekkae covering
an area of 795 Ha. The Head of the Land Office of Wajo specified that the
settlement failed to reach the common ground because the number of subjects
that had changed made it difficult in identifying land control at the location of
PTPN XIV. Currently, the steps being taken include the coordination of local
governments, the Ministry of State-Owned Enterprises, the Ministry of Villages,
and the Development of Underdeveloped Regions and Transmigration.
2. Conflict asset of PTPN XIV in Jeneponto regency. The conflict occurred in HGU No.
01 covering an area of 1,601.88 Ha.
3. Conflict asset of PTPN XIV in Gowa regency. This conflict covers an area of
1,601.88 Ha due to PTPN land control by the community. The Head of the Land
Office of Gowa regency explained that the problem of PTPN XIV assets become
the object of a case.
4. Conflict asset of PTPN in Enrekang regency. This conflict covers an area of 5,230
Ha due to the use of the land that belongs to the former HGU PTPN XIV based on
the Regent Decree.
This study observes that there are several forms of conflict over state-owned enterprises'
assets. First, ownership by the community for land whose certificate has been issued to
state-owned enterprises, second, the control of the former State land, and third, control
by the community on land that is yet to have a certificate.
16
17

Sumardjono, Maria W. Reorientasi Kebijakan Pertanahan. (Jakarta: Kompas, 2011). p. 65
Limbong, Benhard. Konflik Pertanahan. (Jakarta: Margaretha Pustaka, 2008). p. 10

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Generally, several theories associated with conflicts between state-owned enterprises
and the community in South Sulawesi were observed due to inconsistent positions. This
inconsistency is referred to as the position of the community as a weak party against the
PTPN XIV.
Chart 1. Data on Disputes, Conflicts, and Land Cases

Source: Ministry of Agrarian and Spatial Planning of the Republic of Indonesia, 2021

The community view land whose rights have expired and ceased to have a legal
relationship with the rights holder. Meanwhile, the state-owned enterprises believe the
land acquired will always remain under their control. These different views became more
complicated because other parties explain the state asset cannot be released without the
House of Representatives' approval. The land belonging to state-owned enterprises tends
to lead to criminal law implications when a transfer is made.
Based on the land assessment, the main objective is to find out the factors causing the
conflict and provide an idea as resolution.18 The first step is to examine and analyze data
on the current issue. Based on the analysis result, the main issues can be mapped and
this makes it easier to find the right format in the resolution stages. This assessment
becomes the legal review of land conflicts based on juridical, physical, and other
supporting data. The results of this study are reviewed for the implementation of the law
to handle conflicts. In Indonesia, land issues over state-owned enterprises occur yearly.
The following is data on disputes, conflicts, and land cases in the country from 2015-2020.
Assets control is an integral part of the implementation and management of state-owned
enterprises to achieve their objectives. Juridically, all forms of control are subject to laws
and regulations in the land sector, State, and Limited Liability Companies.
18

Luke, Belinda. "Examining accountability dimensions in state‐owned enterprises." Financial
Accountability & Management, 26, no. 2 (2010): 134-162.

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Recently, public finances are not only meant for the State’s function but also extend to
regular and continuous activities serving their needs. It is an architectural building
consisting of state, regional, legal entity, and personal finances with each having different
rechtcharacter and rechtsstatues. This shows the State’s authority (authority, gezag)
becomes high and less when there is an increase in public and private sectors
respectively.19
In principle, the protection of state-owned enterprises' assets is a form of implementing
regulations to enable the State to take direct action against the overall security.
Therefore, the government’s land still requires legal requirements that are more
comprehensive and factual. This caused the law to become an important supporter of
the state's good and integrated land. However, the government's position as a
shareholder makes them control all assets of state-owned enterprises. This is indicated
in several laws and regulations, providing uniqueness to these assets that cannot be
confiscated. Moreover, actions detrimental to state-owned enterprises are categorized
as criminal acts of corruption.

5. Conclusion
In host countries, state-owned enterprises are more subject to institutional pressures
than private firms. Land status is not a State asset because its control is based on transfer
with capital participation that is followed up through abolition. The following are the legal
means to resolve land conflicts of state-owned enterprises controlled by the community.
First, legal harmonization between the laws and regulations that make the assets belongs
to the government, second, the regulation of customary law as a means of resolution,
and third, through agrarian reform.

References
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"Estimates model of factors affecting financial distress: evidence from indonesian
state-owned enterprises." Asian Journal of Economics, Business and Accounting 11,
no. 3 (2019): 1-19.
Astami, Emita W., Greg Tower, Rusmin Rusmin, and John Neilson. "The effect of
privatisation on performance of state‐owned‐enterprises in Indonesia." Asian
Review of Accounting, 18 (1) (2010): 5-19.
Collins, Ngan, Sari Sitalaksmi, and Russell Lansbury. "Transforming employment relations
in Vietnam and Indonesia: case studies of state‐owned enterprises." Asia Pacific
Journal of Human Resources 51, no. 2 (2013): 131-151.
Dian Puji N. Simatupang. Paradoks Rasionalitas Perluasan Ruang Lingkup Keuangan
Negara dan Implikasinya Terhadap Kinerja Keuangan Pemerintah. Jakarta: UI Press,
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19 Dian Puji N. Simatupang. Paradoks Rasionalitas Perluasan Ruang Lingkup Keuangan Negara dan

Implikasinya Terhadap Kinerja Keuangan Pemerintah. (Jakarta: UI Press, 2011), p.213

192

Hasanuddin Law Rev. 8(2): 186-193

Irwansyah. Penelitian Hukum: Pilihan Metode dan Praktik Penulisan Artikel. Yogyakarta:
Mirra Buana Media, 2020.
Kamal, Miko. "Corporate governance and state-owned enterprises: a study of Indonesia's
code of corporate governance." J. Int'l Com. L. & Tech. 5 (2010): 206.
Kim, Kyunghoon. "Using partially state-owned enterprises for development in
Indonesia." Asia Pacific Business Review 25, no. 3 (2019): 317-337.
Li, Tania Murray. "Commons, co-ops, and corporations: assembling Indonesia’s twentyfirst century land reform." The Journal of Peasant Studies 48, no. 3 (2021): 613-639.
Limbong, Benhard. Konflik Pertanahan. Jakarta: Margaretha Pustaka, 2008.
Luke,
Belinda.
"Examining
accountability
dimensions
in
state‐owned
enterprises." Financial Accountability & Management, 26, no. 2 (2010): 134-162.
McLeod, Ross H. "The struggle to regain effective government under democracy in
Indonesia." Bulletin of Indonesian Economic Studies 41, no. 3 (2005): 367-386.
Meyer, Klaus E., Yuan Ding, Jing Li, and Hua Zhang. "Overcoming distrust: How stateowned enterprises adapt their foreign entries to institutional pressures abroad."
In State-Owned Multinationals, pp. 211-251. Palgrave Macmillan, Cham, 2018.
Nurdin, Iwan. "Resolving agrarian conflict through implementation of land reform by
collaboration of CO and local government in Indonesia." In World Bank Conference
of Land and Poverty, Washington DC. 2014.
Patton, M.Q., and Cochran, M. (2007). A Guide to Using Qualitative Research
Methodology, Medecins Sans Frontieres, UK.
Sakai, Minako. "Land dispute resolution in the political reform at the time of
decentralization in Indonesia." Antropologi Indonesia 68 (2002): 40-56.
Santoso, Urip. Hukum Agraria dan Hak-hak atas Tanah. Jakarta: Kencana Prenada Media
Group, 2010.
Sihombing, B.F. Evolusi Kebijakan Pertanahan dalam Hukum Tanah Indonesia.
Djambatan: Jakarta, 2005.
Sitalaksmi, Sari, and Ying Zhu. "The transformation of human resource management in
Indonesian state-owned enterprises since the Asian Crisis." Asia Pacific Business
Review 16, no. 1-2 (2010): 37-57.
Sumardjono, Maria W. Reorientasi Kebijakan Pertanahan. Jakarta: Kompas, 2011.

193