Law Number 5 of 1960 concerning Basic Regulations on Agrarian Principles, commonly referred to as the Undang-Undang Pokok Agraria (UUPA), serves as the foundational “umbrella act” for all land and natural resource governance in Indonesia. Enacted on September 24, 1960, the UUPA was designed to dismantle the colonial dualism of land law, which previously bifurcated the legal landscape into Western land rights (governed by the Dutch Burgerlijk Wetboek) and Adat land rights (governed by unwritten customary law). The UUPA effectively revoked the Agrarische Wet of 1870 and the Agrarisch Besluit of 1870, establishing a unified national land law based on Adat law, provided such customary principles do not conflict with national interests or the provisions of the UUPA itself.

Constitutional Basis and the Right of Control by the State

The UUPA derives its legal authority from Article 33, Paragraph (3) of the 1945 Constitution of the Republic of Indonesia (Undang-Undang Dasar 1945), which stipulates:

“Bumi dan air dan kekayaan alam yang terkandung di dalamnya dikuasai oleh negara dan dipergunakan untuk sebesar-besar kemakmuran rakyat.” (The earth and water and the natural resources contained therein are controlled by the state and used for the greatest prosperity of the people.)

Under Article 2 of the UUPA, this constitutional mandate is operationalized as the “Right of Control by the State” (Hak Menguasai Negara or HMN). The HMN does not constitute ownership in a civil law sense; rather, it empowers the State, as the representative of the Indonesian people, to:

  1. Regulate and implement the use, allocation, availability, and maintenance of earth, water, and space;
  2. Determine and regulate legal relations between persons and the earth, water, and space;
  3. Determine and regulate legal relations between persons and legal acts concerning the earth, water, and space.

The Principle of National Unity and the Nationality Principle

Article 1 of the UUPA establishes that the entire territory of Indonesia—including the earth, water, and the natural resources contained therein—constitutes the “common inheritance” of the Indonesian people. This principle of national unity dictates that the relationship between the Indonesian people and the land is eternal.

Flowing from this is the “Nationality Principle” (Asas Nasionalitas) codified in Article 9, which mandates that only Indonesian citizens (Warga Negara Indonesia) may possess a full and complete relationship with the land. Article 21, Paragraph (1) reinforces this by stating:

“Hanya warga-negara Indonesia dapat mempunyai hak milik.” (Only Indonesian citizens can have the right of ownership.)

While legal entities (Badan Hukum) and foreign nationals may hold specific derivative rights such as Hak Guna Bangunan or Hak Pakai (subject to separate chapters in this volume), the UUPA reserves the core Hak Milik (Right of Ownership) exclusively for natural Indonesian persons, with limited exceptions for specific religious and social legal entities designated by Government Regulation.

The Social Function of Land

A central doctrine of the UUPA is the “Social Function of Land” (Fungsi Sosial Hak atas Tanah). Article 6 of the UUPA states:

“Semua hak atas tanah mempunyai fungsi sosial.” (All land rights have a social function.)

This doctrine implies that any land right, regardless of its holder, must be utilized in a manner that balances individual interests with the interests of the community and the state. This principle serves as the legal justification for state interventions, including:

  1. The obligation to use and maintain land actively;
  2. The prevention of land speculation or “neglected land” (tanah terlantar);
  3. The state’s authority to revoke land rights for public interest, provided compensation is paid (as further regulated under Law No. 2 of 2012).

Unified Land Rights System

The UUPA replaced the colonial classification of land with a single hierarchy of rights. Article 16, Paragraph (1) lists the primary land rights recognized under the national system:

  1. Hak Milik (Right of Ownership);
  2. Hak Guna Usaha (Right of Cultivation);
  3. Hak Guna Bangunan (Right of Building);
  4. Hak Pakai (Right to Use);
  5. Hak Sewa (Right of Lease);
  6. Hak Membuka Tanah (Right to Clear Land);
  7. Hak Memungut Hasil Hutan (Right to Collect Forest Products).

The UUPA also recognizes “other rights” not specifically named that may be established by law, as well as temporary rights such as Hak Gadai (Right of Pledge) and Hak Menumpang (Right of Lodging), though the UUPA expresses an intent to phase out these temporary Adat-based rights due to their potential for exploitation.

Prohibition of Land Monopolies and Absentee Ownership

To prevent the concentration of land in the hands of a few, Article 7 and Article 17 of the UUPA authorize the government to set maximum and minimum limits on land ownership. This is further detailed in Law No. 56/Prp/1960 concerning the Determination of Agricultural Land Size. These regulations prohibit “absentee” ownership, particularly for agricultural land, requiring owners to reside in the district where the land is located to ensure productive use.

Conversion Provisions (Ketentuan Konversi)

The UUPA included transitional provisions to convert colonial-era rights into the new system. Under the “Conversion Provisions” (Ketentuan Konversi), rights such as Eigendom held by Indonesian citizens were converted into Hak Milik. Eigendom held by foreigners, and other colonial rights like Erfpacht and Opstal, were converted into limited-term rights such as Hak Guna Bangunan or Hak Guna Usaha, with specific expiration dates to force the transition into the national legal framework.

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