Land rights controversy shakes up Indonesia capital relocation plan

A computer-generated image of Indonesia’s future state palace in East Kalimantan, as part of the country’s relocation of its capital from slowly sinking Jakarta to a site 2,000 kilometers away in East Kalimantan. (AFP/Handout)

JAKARTA — Nusantara, the Indonesian government’s new capital city project, is facing more public scrutiny even after lawmakers passed a law formalizing the staggered move away from congested Jakarta, following allegations that a number of prominent figures stand to benefit from the relocation to East Kalimantan.

Concerns surrounding land rights and ownership over the 256,000-hectare site of the new capital have surfaced ever since President Joko “Jokowi” Widodo announced that the new city would occupy an area straddling the regencies of North Penajam Paser and Kutai Kartanegara.

Dozens closely linked to government were named in a 2020 report copublished by Trend Asia and the Mining Advocacy Network (Jatam) titled “For whom is the new capital?”.

But now, critics are focusing their attention on certain high-net-worth individuals, including conglomerate Sukanto Tanoto and politically wired businessman Hashim Djojohadikusumo.

Both came under recent scrutiny for their reported ownership of a portion of land on which the new capital will be built: Sukanto through his PT International Timber Corporation Indonesia (ITCI) Hutani Manunggal and Hashim through his ownership of the Arsari group.

During a webinar on Jan. 22, senior economist Faisal Basri speculated that Hashim’s close ties to the government had turned him into one of the so-called oligarchs who stood to benefit from the capital’s relocation through his water supply project.

Faisal also took issue with the lack of transparency over dealings between the state and concession owners like Sutanto, Hashim or even his brother, Defense Minister Prabowo Subianto, as well as with vendors appointed to provide materials for the construction of the new capital.

“There’s no such thing as a free lunch,” he said.

The Jakarta Post has reached out to Sukanto’s firm. which already stated in 2019 that the palm oil kingpin was prepared to return his portion of the land to the government.

Meanwhile, Hashim rubbished these claims, insisting that he had held onto the land rights since 2007, long before the location of the new capital was unveiled by Jokowi.

“I can say that [these allegations] are a huge lie, and also slander. There have been no political deals,” he told a press conference on Thursday, adding that only a small portion of his land overlapped with the Nusantara project.

According to Hashim, he had already made plans in 2015 to utilize his concession area for a reforestation project – geared for biofuel production and wildlife conservation – with the clean water initiative being only an add-on.

“The plan was ready for execution from 2016. It was meant to supply [clean water] to Balikpapan city, but then the government, through Bappenas [the National Development Planning Agency], asked me to prioritize [water supply] to the new capital,” he said.

“However, no contract has been signed yet.”

As a businessman, Hashim also funded his brother’s unsuccessful presidential campaign. Prabowo eventually turned into Jokowi’s coalition ally, and was tasked to manage land in Kalimantan under a food security project.

During one of their nationally televised campaign debates on agrarian reform in 2019, Jokowi deflected Prabowo’s criticism of his land distribution program by revealing that his rival owns 220,000 ha of land in East Kalimantan.

Prabowo acknowledged this as fact, but his party later hit back by noting that proceeds from these land concessions also contributed to Jokowi’s bid for the Jakarta governor’s post in 2021, regarded as a key milestone that heralded his rise to the presidency in 2014

Growing resistance

In addition to concerns over land concessions, the capital relocation project has also faced increased scrutiny by academics.

An online petition, created by a coalition of 45 members of academic institutions and civil society groups, has garnered close to 25,000 public signatures as of Tuesday. The petition urged Jokowi to call off the project for now, arguing that the government should focus state funding on pandemic mitigation efforts instead.

Senior Muslim scholar Azyumardi Azra, one of the 45 initiators of the petition, said he was unconvinced that the Jokowi administration would be able to relocate the capital before the President’s second term ends, and that he feared it might become a “burden” for successive leaders.

“It will be difficult to build a permanent and livable home [for people] in just two years – let alone a whole city. That is what we are essentially arguing for in the petition; now isn’t the right time [to relocate],” he was quoted by kompas.com as saying on Monday.

Another group, dubbed the National Axis for State Sovereignty (PNKN), meanwhile, filed a request for a judicial review of the New Capital Law at the Constitutional Court on Feb. 2, arguing that its speedy deliberation at the House of Representatives was unconstitutional – a callback to what also happened to the Job Creation Law.

Among the petitioners at the PNKN, there is former Corruption Eradication Commission advisor Abdullah Hehamahua and former regional councilor (DPD) Marwan Batubara, as well as 10 others.

The court has yet to grant the group’s request.

Construction continues

Touted as Jokowi’s future legacy to the nation, the capital relocation project has so far raised more eyebrows than it has funds.

Besides recent examples of its proneness to natural disasters, some economists believe that the multi trillion-rupiah project would put an unnecessary burden on state coffers, despite assurances from the government.

But officials insist on continuing with plans to kickstart construction by the second half of the year, beginning the official first phase of a project that spans until 2045.

“To complete it in 2024, we assume it is critical to start in the early second half of 2022,” Imam Santoso Ernawi, who heads the city’s planning and development task force at the Public Works and Housing Ministry, said last week.

According to him, the first phase of Nusantara’s construction, set to be completed before 2024, would focus on government buildings such as the state palace, ministries, civil servant housing and a state mosque.

Between 2025 and 2034, phase two of the project, the government will start searching for private vendors to develop the city. For the project’s last phase, the state will develop the new capital city further by resurrecting its surrounding cities and developing eastern Indonesia.

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