Since Law Number 5 of 1960 concerning Principle Provisions of Agrarian (“UUPA”) was promulgated, it has been affirmed under Article 2 paragraph (1), that based on the provisions in Article 33 paragraph (3) of the Indonesian Constitution and matters as referred to in Article 1, the land, the waters, and the natural resources within shall be under the powers of the State, as the organization of power for all people. Then, the controlling right from the State referred to in paragraph (1) authorizes:
- regulate and carry out the designation, use, supply and maintenance of the earth, water, and space;
- determine and regulate legal relations between people and earth, water and space;
- determine and regulate legal relations between people and legal actions concerning the earth, water, and space.
Based on that, the State as an organization of power for all people has the right to regulate and carry out the allotment of rights to the surface of the earth called land. Hence, the government promulgated Law No. 24 of 1992 concerning Spatial Planning which was later revoked by Law No. 26 of 2007 concerning Spatial Planning (herein after called “Spatial Planning Law”) which was previously regulated under the City Establishment Ordinance (Stadsvormingsordonnantie Staatsblad Year 1948 Number 168).
Government Authority for Spatial Planning
Article 3 of the Spatial Planning Law stipulates that the State holds the task to organize spatial planning to the greatest extent possible for the prosperity of the people and in the implementation of it grants authority to the Government/Regional Government. In its administration, the State still respects the rights of people by the provisions of the legislation.
The authority of the Government in organizing spatial planning covers the regulation, guidance, implementation, and supervision of the implementation of national, provincial and district/city spatial planning. In implementing spatial planning, the government through the regional government has the authority to plan regional spatial planning.
Spatial planning is carried out to produce a general spatial plan and a detailed spatial plan. The preparation of the detailed plan is intended as the operationalization of the general spatial plan and as a basis for the determination of zoning regulations which are provisions governing spatial use requirements and control provisions and are compiled for each block/zone of designation for which zones are stipulated in the detailed spatial plan. Therefore, one form of determining the authority of government spatial planning is to issue a zoning regulation.
Zoning Regulations and Developmental Rights
Based on the Government Regulation of the Republic of Indonesia No. 15 of 2010 concerning the Implementation of Spatial Planning, zoning arrangements consist of directions for national system zoning regulations, provincial systems, and zoning regulations in district/city areas, each of which contains provisions concerning: (i) types of activities that are permitted, permitted on some conditions, and not allowed, (ii) intensity of spatial use, (iii) minimum infrastructure and facilities, and (iv) other requirements needed.
The intensity of the use of space as a form of provisions in a zoning regulation at least consists of:
- maximum building coefficient (“KDB”);
- the maximum floor coefficient (“KLB”);
- maximum building height; and
- minimum green base coefficient,
then with the authority to regulate zoning as well as the intensity of spatial use, developmental rights are limited to fulfill these conditions. Development in certain locations can be charged with the provisions of a more stringent use of space that can be difficult for developers.
Furthermore, the Spatial Planning Regulation regulates incentives and disincentives as a form of controlling spatial use. Incentives and disincentives in spatial planning are created to increase spatial use control efforts and to facilitate spatial use activities to be in line with spatial planning and to enhance partnerships of all stakeholders in the spatial use framework that is in line with spatial planning.
Incentives are provided for spatial use activities in areas that are encouraged to develop, which can be in the form of fiscal and/or non-fiscal incentives. Incentives from the government to the public can be in the form of: (i) tax relief, (ii) compensation provision, (iii) reduction of retribution, (iv) compensation, (v) rent of space, (vi) endownment of shares, (vii) provision of infrastructure and facilities, and/or (viii) licensing convenience. While disincentives are given for spatial use activities in areas that are restricted in development, which can be in the form of physical disincentives and non-fiscal disincentives.
In this case, developers who comply with zoning regulations and spatial planning, but their developmental rights have been reduced since the development area is determined by the government as a space that is encouraged to be developed, then they may receive incentives. For example, a land parcel is located in a zone with maximum provisions of KLB 6. There are also other buildings affected by building preservation regulations so that the building owner cannot fully use the developmental rights over the KLB provisions. Hence, the building owner can get incentives in the form stipulated in the PP Spatial Planning.