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Land rights controversy shakes up Indonesia’s capital relocation plan


There are allegations that a number of prominent figures stand to benefit from the relocation of Indonesia’s capital to East Kalimantan.

JAKARTA – Nusantara, the 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 the 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.

Dio Suhenda

The Jakarta Post

Published : February 10, 2022