The Guthrie deal: Land laundering
Your editorial Guthrie deal finally closed (March 9, 2001) misses the point somewhat.
If (some of) the lands for the plantations were taken without the agreement of the original owners, then the Salim Group never obtained legal title. Therefore, the Indonesian Bank Restructuring Agency (IBRA) had no authority to sell the land on the group's behalf and consequently Guthrie has acquired ... nothing. In fact, Kumpulan Guthrie Bhd. could cancel the deal and sue IBRA for damages resulting from misrepresentation.
Under Indonesian law, there is no contract if there is no full agreement between parties. If, in a land sale, there is no agreement on the purchase price, legal title to the land cannot pass to the buyer. The buyer can never become owner if he is aware (bad faith) that the purchase was not based on true consensus, even if the sale is registered at the land office ("negative" land registration system) or after years of possession.
Usually such "buyers" claim that the protesting farmers were merely squatters on state land. In most countries, people who occupy unclaimed land for, say, 20 years, can become true owners. In Indonesia such provisions were abolished. Farmers who had occupied land for 40 years or 50 years could still be evicted as squatters to make way for plantations, golf courses, etc. However, government regulation 24/1997 on Land Registration again states (article 24:2) that occupation of land for 20 years or more is equal to ownership, provided one truly believes that one has acquired the land legally (good faith), and no objections are raised by others (including by government) during that time.
Ministerial regulation (No. 5/1999) acknowledges the communal land rights of traditional communities (generally known as hak rakyat) and the principle that communal land can only be used with the approval of the community. The regulation implies an obligation to give land back to communities after it has been abandoned by the temporary user/investor.
The Jakarta Post praises the Guthrie deal, but considers none of these issues, although the legacy of stolen land looms over a large portion if IBRA's assets. Ignoring people's grievances will damage "investor confidence" much more than a called-off deal with Guthrie. No investor wants to discover that he is doing business on disputed land.
If the farmers are right, then part of the US$387 million should be used to compensate them. That would repair the legal flaw underlying the deal, protect Indonesia's reputation and restore faith among all the people whose land rights were ignored during Indonesia's past era of rapid growth.
PIETER J. EVERS
Jakarta