Regulation Watch · Property and Construction · Indonesia. The law applies nationally to agrarian reform, land rights, plantation permits, forestry and other business permits, spatial planning, coastal and small-island land, land conflicts and redistribution. It directly affects land and permit holders whose parcels fall within the statutory categories or a future priority location or reform-object decision.
Agrarian Reform Law Adds HGU Surrender Duty
Law 10/2026 creates a national agrarian reform framework, requires HGU and plantation-business permit holders to surrender at least 20% of the HGU parcel, and introduces wider land-control limits, reform objects and criminal exposure.
- Published
- Law 10/2026 was enacted and promulgated on 30 September 2026 in State Gazette of the Republic of Indonesia 2026 No. 144, Supplement No. 7201. The official State Secretariat text and the official BPK legislation record each identify a 50-page instrument.
- Effective
- 30 September 2026, the promulgation date stated by the official legal metadata and Article 52. Article 51 states that the law does not apply retroactively to agrarian reform implementation.
- Added to Watch
- 6 November 2026
Who is affected
PT PMA and PT PMDN companies holding HGU, HGB, use rights, management rights, plantation-business permits, forestry permits or other business permits tied to land; plantation owners and operators; landowners, developers, property investors, landlords and tenants; holders of coastal or small-island land; foreign shareholders, directors and commissioners responsible for land and concession governance; Indonesian communities and customary communities in or near overlapping or disputed land; and legal, licensing, land, ESG, finance and project teams handling acquisitions, renewals, extensions, disputes and development approvals.
Practical impact
Law 10/2026 creates one national framework for priority locations, agrarian reform objects, conflict resolution, restoration of land rights and redistribution. It identifies as potential reform objects land that overlaps or conflicts with HGU, HGB, use rights, management rights, forestry or other business permits, rights or permits exceeding their granted or maximum area, abandoned land, absentee land, excess holdings, unfulfilled land-provision obligations and land voluntarily surrendered by the rights holder. A reform object still requires a decision by the new Agrarian Reform Implementation Institution, and a lawful rights holder or third party unrelated to the agrarian conflict is entitled to fair and proper agreed compensation under applicable law. Separately, Article 48 requires HGU and plantation-business permit holders to surrender at least 20% of the HGU parcel, while the procedure awaits a Presidential Regulation. The Government must also set aggregate maximum land-control and ownership limits for one business or affiliated businesses, with details to follow in a Government Regulation.
Indonesia enacted and promulgated Law 10/2026 on 30 September 2026. It took effect that day and establishes a national system for agrarian reform planning, priority locations, reform objects, eligible recipients, structural conflict resolution, restoration of land rights, redistribution, land-control limits and a new implementing institution.
The law is material for companies because its reform-object list reaches beyond abandoned state land. It includes community land that overlaps or conflicts with HGU, HGB, use rights, management rights or business permits; land rights and permits exceeding their maximum or granted area; specified community land overlapping forestry areas or state and regional assets; abandoned land; absentee land; excess holdings; unfulfilled land-provision obligations; and land voluntarily surrendered by its holder.
Inclusion in that list is not an automatic cancellation of every right or permit. The new Agrarian Reform Implementation Institution must identify, verify and formally designate a reform object. The designation must consider the land's legal status, function and permitted use. A lawful rights holder or third party that is unrelated to the agrarian conflict and has land designated as a reform object is entitled to fair and proper compensation based on agreement and applicable law.
Article 48 creates a direct sector obligation: holders of HGU and plantation-business permits must surrender at least 20% of the HGU parcel. The law does not set a separate transition period or a self-executing transfer procedure. A Presidential Regulation must provide the procedure, so affected companies should calculate and document the exposure now, reconcile any earlier land-provision performance and wait for the regulated process before attempting a transfer.
The Government must set minimum and maximum land-control and ownership limits. The maximum is to include cumulative holdings by one business and affiliated businesses, whether held through land rights or business permits. State-owned enterprises, regional-owned enterprises and cooperatives are excluded from the business cap. The detailed calculation and implementation must be set by Government Regulation.
The law adds a specific small-island and coastal control. An entire small island, or one parcel directly bordering the coastline, cannot be granted as one land-right unit to one person or one legal entity. Property and tourism projects in these locations should therefore review parcel configuration and title structure before acquisition, subdivision, renewal or development commitments.
Existing land, plantation, forestry, mining, spatial-planning, coastal and small-island rules remain effective only to the extent that they do not conflict with Law 10/2026. Existing agrarian reform and conflict-resolution processes continue but must be integrated into the new framework. The law is expressly non-retroactive, while ministries, state and regional enterprises, local governments and other public authorities must align relevant rights, permit and policy decisions with it.
All implementing regulations must be issued within one year, by 30 September 2027. That package is expected to define priority-location selection, the institution, land caps, transfer and asset-release mechanics, and the HGU surrender procedure. Companies should monitor the regulations without postponing the title, map, affiliate, occupation and dispute audit needed to respond when a location or parcel is formally reviewed.
Criminal exposure is linked to conduct, not simply to holding a title. Offences include falsifying or concealing the documents, data or maps used in reform decisions; obstructing the process through violence, threats, intimidation or engineered enforcement; remaining on a designated reform object without a valid legal basis; and controlling redistributed land above the maximum. Corporate fines can reach category VII for document and data manipulation and category VI for unlawful occupation or excessive control of redistributed land.
Required action
- Create a parcel-level register of every HGU, HGB, use right, management right, plantation-business permit, forestry permit and other land-linked business permit, including holder, affiliate, area, expiry, renewal status, actual use, spatial designation, community occupation, dispute history and supporting maps.
- For each HGU and plantation operation, calculate the 20% reference area, identify any land already provided or surrendered under earlier obligations and preserve the evidence, but do not make an unstructured transfer before the Presidential Regulation confirms procedure, recipient, valuation, mapping and registration mechanics.
- Test every parcel for the statutory reform-object indicators, including overlap with community or transmigration land, area beyond the granted or maximum limit, abandonment, absentee ownership, unfulfilled land-provision duties and occupation by communities in good faith.
- Map holdings across affiliated companies because the law requires an aggregate maximum for one business and affiliated businesses, then include the resulting exposure in acquisition, restructuring, financing and renewal decisions.
- Pause assumptions that a valid title or permit alone resolves a structural land conflict. For disputed or overlapping land, prepare title chains, permits, survey records, use evidence, community engagement records and compensation positions for the new institution's process.
- For coastal and small-island projects, confirm whether a parcel covers an entire small island or directly borders the coastline because the law prohibits granting the whole area as one land-right unit to one person or legal entity.
- Add agrarian reform review to land due diligence, title renewals, plantation and forestry compliance, spatial-planning checks, PBG or SLF project gating, environmental assessment and board reporting, and track the implementing regulations due by 30 September 2027.