17 December, 2019
Overview
Over the past years, the Minister of Agrarian Affairs and Spatial Planning/ Head of the National Land Agency (“Minister”) has issued several regulations on location permits due to the progressive system established by the government for the ef ciency of investments and licensing. After the Online Single Submission (“OSS”) system became applicable, the Minister issued Regulation No. 14 of 2018 on Location Permits (“Regulation 14/2018”), as the rst regulation on location permits accommodating the OSS system.
As the OSS system is continuously being developed, which is the OSS version 1.1 has been introduced since 11 November 2019, and in order to improve ef ciency in the Location Permit procedure, the Minister recently issued Regulation No. 17 of 2019 on Location Permits (“Regulation 17/2019”/”New Location Permit Regulation”), replacing Regulation 14/2018.
Regulation 17/2019 still recognizes the two types of Location Permit:
(i) Location Permits with Commitments; and
(ii) Location Permits without Commitments.
The New Location Permit Regulation emphasizes the difference between these two types of Location Permits. Although in general, a lot of provisions remain the same, several adjustments in the new regulation are noteworthy.
Key Provisions of the New Location Permit Regulation
The Scope of Regulation 17/2019
According to Article 3 of Regulation 17/2019 the new regulation covers:
(i) the objects and subjects of Location permits;
(ii) the licensing procedures and term of a permit;
(iii) the rights and obligations of Location Permit holders; and
(iv) monitoring and evaluation.
Subjects of Location Permits under the New Location Permit Regulation
Regulation 17/2019 clarifies the subjects of location permits, who are now defined as business actors who need to use land for their business or activities but do not yet own or possess the land and include:
(i) legally capable individuals;
(ii) non-individual business actors, specifically:
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limited liability companies;
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publi ccompanies;
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region-owned public companies;
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other state-owned legal entities;
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broadcasting agencies;
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enterprises established by foundations;
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cooperatives;
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limited partnerships;
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rm partnerships;
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civil partnerships.
As a note, previously, limited partnerships, rm partnerships and civil partnerships were not included as subjects of Location Permits.
III. Location Permits with Commitments
Regulation 17/2019 clari es the subjects of location permits, who are now de ned as business actors who need to use land for their business or activities but do not yet own or possess the land and include:
(i) Licensing Procedure
Similar to the licensing procedure under the previous regulation, under Regulation 17/2019, the licensing procedure for a Location Permit with Commitments is the following:
Please click on the tables to enlarge.
Under Article 15 of Regulation 17/2019, the holder of a Location Permit with Commitments can only acquire the land acquisition after the Location Permit becomes effective. The land to be acquired is limited to that approved under the Location Permit.
(ii) Validity and Expansion
The validity of the Location Permit remains the same, ie 3 (three) years as of its effective date extendable for another 1 (one) year if the land acquisition has reached at least 50% of the initial acquisition target.
If the business actor wishes to acquire land that it has not yet acquired during the term of the Location Permit, it can apply for a new Location Permit within 1 (one) year of the expiry date of the Location Permit at the earliest, under 2 (two) conditions:
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the business actor has used the acquired land for its approved business activities;
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no other party is quali ed to engage in business activities on that land.
IV. Location Permits with Commitments
(i) Licensing Procedure
The criteria for a business actor be able to apply for a Location Permit without Commitments remain the same under Article 7 (2) of Regulation 17/2019. A Location Permit without Commitments is deemed effective upon its issuance by the OSS Agency and therefore its holder can acquire the land in accordance with the Location Permit.
(ii) The Utilization of the Land by the Holder of a Location Permit without Commitments
One of the most signi cant changes in Regulation 17/2019 is regarding the utilization of the land by the holder of the Location Permit without Commitments. Under Article 15 (2) of Regulation 17/2019 in utilizing the land, the holder of the Location Permit without Commitments must comply with the spatial plan.
Previously, under Article 11 (3) of Regulation 14/2018, if the holder of a Location Permit without Commitments wished to utilize the land, it still needed to apply for a technical consideration to the Land Of ce. Now, the New Location Permit Regulation no longer requires the holder of a Location Permit without Commitments to apply for a technical consideration before it can use the land.
(iii) Validity and Expansion
The validity and expansion of the Location Permit without Commitments is the same as in III (ii) above.
Regulation 17/2019 has been in force since 20 September 2019. Any plot of land acquired before Regulation 17/2019 came into effect must be registered within 1 (one) year of the expiry of the current Location Permit or Extended Location Permit.
For further information, please contact:
Anastasia Anggita, Makarim & Taira S
anastasia.anggita@makarim.com
