LAND CONTRIBUTION REGULATION AS AN INSTRUMENT FOR LAND CONSOLIDATION FINANCING: A COMPARISON OF INDONESIAN, JAPANESE, AND MALAYSIAN LAWS
Abstract
Land consolidation (land readjustment) depends on land contributions from participating owners, yet the legal regulation of these contributions as a financing instrument is rarely compared across jurisdictions. This article analyses the regulation of land contribution as a financing instrument for land consolidation in Indonesia, Japan and Malaysia through normative legal research with statutory, conceptual and comparative approaches. It examines the legal basis, competent institutions, forms and mechanisms of contribution (voluntary contribution and land deduction), owner consent, participation and compensation, and cost allocation, and it separates four functions that are often conflated: land provision, cost sharing, cost recovery and land value capture. The findings show that Indonesia (Ministerial Regulation of ATR/BPN No. 12 of 2019) is formally consent-based but obliges participants to surrender Tanah untuk Pembangunan (TP) once they join, ties the size of TP to financing needs without prescribing how it is determined, and leaves the accountability of jointly owned business land (TUB) unregulated. Japan (Land Readjustment Act 1954) embeds land deduction in a replotting procedure with statutory consent thresholds, value-based owner protection, a capped reserve-land mechanism and several public cost-sharing sources, yet projects remain only partly self-financing. Malaysia has no dedicated legal framework; surrender and re-alienation under the National Land Code is owner-initiated and state-authority-centred, and land readjustment pilots have stalled over funding, participation and legal gaps. The article concludes that Indonesia should specify the legal character of each financing function, the method for determining contribution, the accounting of reserve land and the protection of owners.
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