Laws and Selling of Islands in Indonesia

IN DECEMBER 2007 an advertisement that put on sale Pulau Panjang (33 hectares) and Pulau Meriam Besar (5 hectares) in West Nusa Tenggara, Indonesia, appeared on a website, The ad invited strong protests from various parties because Indonesia’s laws prohibit anybody to sell any island within the Indonesian territory. In August, a similar case came up. reported that three tiny islands in Mentawai Islands, off West Sumatra, were put on sale. They were Pulau Makaroni (14 hectares), Pulau Silinak (24 hectares) and Pulau Kandui (26 hectares), which respectively were priced at US$4 million, $1.6 million and $8 million.

Beside showing a map of Indonesia, the ads also contained a number of photos to illustrate the country’s beauty, complete with tempting description about the islands. Pulau Makaroni, for example, not only has seawaters with beautiful colors. It also has a number of bungalows built along its beaches. Meanwhile, Pulau Siloinak and Pulau Kandui also look so beautiful. Although their pictures were taken from quite a distance, the two islands spark beauty.

They are also part of Mentawai Islands. The ads incited strong reactions from various parties. The Ministry of Home Affairs, through its spokesperson, Saut Situmorang, stressed that selling any Indonesian island was never justifiable. He said, in line with existing laws and regulations, selling Indonesian islands can never be justified because it is related to the sovereignty of the Indonesia state. A strong reaction also came from the chairman of the House of Representatives (DPR), Agung Laksono, who said that offering Mentawai islands to buyers humiliated the Unitary State of Indonesia and its people. He urged the authorities to arrest the culprits.

In response to those protests, the Mentawai district government in West Sumatra said it had not sold the islands. What had actually happened was the islands had been offered as investment locations only. They had not been offered for sale, the Mentawai government argued. The spokesperson of the West Sumatra provincial government, Dedek Nuzul Putra, even said that at the moment one of the three islands, Pulau Makaroni, was managed by an entrepreneur from Jakarta.

The other two islands also had been offered for similar cooperation. So none of the three islands had been sold in the real sense of the word. Meanwhile, Sora Lokita, a researcher on border zones said that the term ‘for sale’ in the websites did not at all mean that the islands would be sold in the real sense of the word. Instead, they were offered for investment and management only. “The term ‘for sale’ only means control over investment or management (when they are bought by foreigners). It will never change the islands’ status. They will remain in the sovereignty of NKRI (Unitary State of Indonesia),” said Sora Lokita.

Lokita argued that selling land or islands in Indonesia to foreigners violates existing laws. In 1960, with the issuing of Law 4 Prp/1960 on Agrarian Affairs, Indonesia declared what are called base lines of Indonesian islands. The base lines were later amended with government regulations, PP No. 38 Year 2002 and PP No. 37 Year 2008.

The significance of the laws and regulations is that the whole territory of Indonesia, including its land, sea and air that are located in the inner part of the base lines of Indonesian Islands fall under the sovereignty of NKRI, and this is in accordance with national and international laws. Foreigners who wish to buy islands in Indonesia will only obtain Right to Build (Hak Guna Bangunan) and Right to Use (Hak Pakai), whose form will be similar to capital investment if the islands are to be managed.

Certainly, all this must follow existing laws and regulations, national and local. Lokita stressed that investing capital on Indonesian islands or ‘buying’ them can never change their status as part of NKRI. It is a management issue that is separate from the issue of state sovereignty. As an example Lokita took 5-star resorts in Lagoi on Bintan Island in Riau Islands. More than 2,000 hectares of land on Lagoi are fully managed with foreign investments.

This fact has not automatically changed the ownership of the island. It remains part of NKRI. Lokita said however media reports on the alleged selling of Indonesian islands could provide a momentum for the public to learn that there is no doubt about the territory of Indonesia. Managing remote islands for business purposes is a good move, rather than letting them idle. But, their management has to go in accordance with national and international laws. Indeed, Indonesia is the world’s largest archipelagic state. It is an undeniable reality.

According to available data, Indonesia has no less than 17,500 islands. Not surprisingly, many of them have no name. In 2007, the Indonesian government gave a list of 5,500 names of new islands to the United Nations. As such, the total number of Indonesian islands that have got names reaches 13,000 islands while there are still 4,500 islands with no name. Honestly, when asked to develop the so many islands at the same time, the government will surely cannot do it because it has limited funding. The only way that Indonesia can follow is bring in foreign investments for developing the islands.

As a matter of fact, Law No. 27 Year 2007 on the Management of Coastal Areas and Small Islands through Hak Penguasaan Perairan Pesisir (HP-3) is adequate as a ‘legal umbrella’ for inviting foreign investors to come to Indonesia. In its implementation, however, it has often collided with other laws and regulations like Decree of the Minister of Marine Affairs and Fishery No. 5 Year 2008, which was revised to become Decree of the Minister of Marine Affairs and Fishery No. 12 Year 2009 on Fish Catching Businesses, especially its provisions that deals with Fishery Cluster.

Those regulations will cause impoverishment in coastal areas and widespread environmental damages. The government needs to immediately settle regulation overlapping so as to ensure legal certainty for investors, without causing losses to the Indonesian people. Even, government regulations on investment to be issued in the future must go in line with the government’s mission of improving the welfare of its people. If the government can do so and can prove its ability to improve the welfare of the Indonesian people, there will be no more people’s resistance against foreign investors managing islands in Indonesia. (Deddy H. Pakpahan)