LAND ACQUISITION AND RESETTLEMENT FRAMEWORK. INO: Flood Management in Selected River Basins Sector Project

Transcription

1 LAND ACQUISITION AND RESETTLEMENT FRAMEWORK Document Status: Draft May 2015 INO: Flood Management in Selected River Basins Sector Project Prepared by the Ministry of Public Work and Housing through the Directorate General of Water Resources for Asian Development Bank.

2 ii CURRENCY EQUIVALENTS (as of 15 May 2015) Currency unit = rupiah (Rp) Rp1.00 = $ $1.00 = 13,159 AA ADB AH AP BAL BAPPEDA BAPPENAS BPL BPN BWS CBFRM COI CWZ DED DGWR DMS EA EIA EMA FMSRBSP GOI HH HUP IA ICWRMP IEC IFM IOL IP IR Km LA LAIT LARF LARP LRP MAPPI MFF MOA MOHA NJOP ABBREVIATIONS Appraisal Agency Asian Development Bank Affected Household Affected Person Basic Agrarian Law Badan Perencanaan Pembangunan Daerah (Provincial / District Development Planning Agency) Badan Perencanaan Pembangunan Nasional (National Development Planning Agency) Below The Poverty Line Badan Pertanahan Nasional (National Land Agency) Balai Wilayah Sungai (Center for River Basin) Community-Based Flood Risk Management Corridor Of Impact Construction Works Zone Detailed Engineering Design Directorate General of Water Resources Detailed Measurement Survey Executing Agency Environmental Impact Assessment External Monitoring Agency Flood Management in Selected River Basins Sector Project Government of Indonesia Household Harga Umum Pasar general market price Implementing Agency Integrated Citarum Water Resources Management Investment Program Information, Education, and Communication Integrated Flood Management Inventory Of Losses Indigenous People Involuntary Resettlement Kilometer Land Acquisition Land Acquisition Implementation Team Land Acquisition Resettlement Framework Land Acquisition Resettlement Plan Livelihood Restoration Program Masyarakat Profesi Penilai Indonesia - Indonesian Professional Appraiser Association Multitranche Financing Facility Ministry of Agriculture Ministry of Home Affairs Nilai Jual Object Pajak (Tax object selling price)

3 iii NTP PBHTP PCMC PIB PIC PIU PNBP PPAT RCS ROW RWG SES SLIC SOE SPS SPPT TOR WS Notice To Proceed Biaya Perolehan Hak Atas Tanah dan Bangunan (Cost for the Acquisition of the right Land and / or Buildings) Provincial Project Coordination Monitoring Committees Project Information Booklet Project Implementing Consultant Project Implementation Unit Non-Taxes of State Revenue Pejabat Pembuat Akta Tanah (Land Deed Official) Replacement Cost Study Right-Of-Way Resettlement Working Group Socioeconomic Survey Subproject LARP Implementation Team/Committee State-Owned Enterprise Safeguards Policy Statement Surat Pemberitahuan Pajak Terhutang (Government notification of outstanding tax) Terms Of Reference Wilayah Sungai (district)

4 iv DEFINITION OF TERMS Affected Residents / Population / Entitled Persons Entitled party Land Acquisition object Census of affected persons Compensation Construction Works Zone Corridor of Impact Impact Cut-off date Refers to any person or persons, customary community, private or public institution who are physically displaced (relocation, loss of residential land, or loss of shelter) and/or economically displaced (loss of land, assets, access to assets, income sources, or means of livelihood) as result of i) acquisition of land; ii) restriction on land use or on access to legally designated parks and protected areas. The affected populations are parties who control or posses an object land acquisition. Party that controls or posseses land acquisition objects Land, space above ground and below ground, buildings, plants, objects related to land, or any other objects that can be assessed The census is a count of all displaced persons irrespective of their titled or non-titled land ownership status. Its purpose is to accurately document the number of displaced persons and to create an inventory of their losses finalized on the basis of a DMS. A census describes the persons who are displaced, their livelihoods and income sources, and what they are likely to lose because of the project. Proper and equitable replacement provided in the form of cash or other agreed in kind at replacement cost to the affected person / entitled party in the process of land acquisition / resettlement for the assets and livelihoods lost or affected by the project. A CWZ shall be a designated zone defined during detailed design and clearly identified in the LARP update that will divide the canal/river into convenient stretches for construction implementation Area, which is impacted by civil works in the implementation of any subproject of the FMSRBP. It is important in two particular respects: (a) Legally as the area within which AHs will be entitled to compensation and other measures for any loss of land, structures or land use and occupation and of livelihoods and (b) Operationally as the agreed and demarcated area within which construction activities will take place. Extent of social and economic impacts resulting from the implementation of an activity. In land acquisition / resettlement, the degree of impact will be determined by (a) scope of economic loss and physical displacement / relocation; and (b) vulnerability of the affected population / entitled party. Impact can be positive or negative. The cut-off-date for eligibility to Project entitlements refers to the date when the Land Acquisition Implementation Team (LAIT) led by Land Agency posts the result of the detailed measurement survey (DMS) that include the list of the entitled parties and the losses in public places (e.g village office, district office, and the location of the land acquisition).

5 v Detailed Measurement Survey Eminent domain/ Compulsory Land Acquisition Entitlement Income restoration Inventory of Losses Resettlement Land acquisition The cut-off date sets the time limits to determine eligibility of persons living and/or with assets or interests inside the project areas. Should they be adversely affected, they will be entitled to compensation for their affected assets, including rehabilitation measures as needed, sufficient to assist them to improve or at least maintain their pre-project living standards, income-earning capacity and production levels. Those who encroach into the project area, or any of its subprojects, after the cut-off date will not be entitled to compensation or any other assistance. The cutoff date will be made known to entitled parties and other stakeholders.. With the use of approved detailed engineering drawings, this activity involves the finalization and/or validation of the results of the IOL, severity of impacts, and list of APs done during the preparation of this land acquisition and resettlement plan (LARP). The updating will be carried out during land acquisition implementation phase undertaken by the land acquisition team led by land office. The right of the state using its sovereign power to acquire land for public purposes. National law establishes which public agencies have the prerogative to exercise eminent domain. Refers to a range of measures of compensation and other forms of assistance provided to displaced/ entitled persons in the respective eligibility category. This involves rehabilitating the sources of income and productive livelihoods of severely affected and vulnerable APs to enable income generation equal to or, if possible, better than earned by displaced persons before resettlement. This is the listing of assets as a preliminary record of affected or lost assets during the preparation of this LARP where all fixed assets (i.e., land used for residence, commerce, agriculture; dwelling units; stalls and shops; secondary structures, such as fences, tombs, wells; standing crops and trees with commercial value; etc.) and sources of income and livelihood inside the COI are identified, measured, their owners identified, their exact location pinpointed, and their replacement costs calculated. The severity of impact on the affected assets and the severity of impact on the livelihood and productive capacity of the Affected Persons or entitled parties are likewise determined. It is the displacement of people, not of their own volition but involuntarily, from their homes, assets, sources of income and livelihood in the Corridor Of Impact (COI) in connection with the Project. Land Acquisition activity by way of giving compensation and other measures adequately and at replacement costs for damages / loss to the entitled parties / affected populations in order to reduce adverse social impacts due to the project. Land acquisition and resettlement are conducted involuntary for the benefit of the project.

6 vi Relocation Relocation Assistance The physical displacement of an AP from his/her pre-project place of residence and/or business. Support provided to persons who are physically displaced by a project. It may include transportation, transitional assistance (food, shelter, and social service) that is provided to the displaced persons in connection with their relocation. Replacement cost Land Acquisition and Resettlement Plan (LARP) Severely affected persons Vulnerable groups Amount in cash or in kind needed to replace an asset in its existing condition, without deduction for transaction costs or depreciation, at prevailing market value, or its nearest equivalent, at the time of compensation payment A time-bound action plan with budget, setting out the resettlement objectives and strategies, entitlements, activities and responsibilities, resettlement monitoring, and resettlement evaluation. This refers to Affected/ displaced Persons who will i) lose 10% or more of their total productive assets, ii) have to relocate, and/or iii) lose 10% or more of their total income sources due to the project. These are distinct groups of people who might suffer more or face the risk of being further marginalized due to the project and specifically include: i) households that are headed by women, ii) household heads with disabilities, iii) households falling under the regional poverty line, and iv) elderly household heads. 1 This land acquisition and resettlement framework is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the terms of use section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. 1 This definition is in line with Law No. 39/1999 (Article 5 elucidation) on Human Rights. Vulnerable populations include the elderly, children, the poor, pregnant women and people with disabilities.

7 vii TABLE OF CONTENTS CURRENCY EQUIVALENTS... ii ABBREVIATIONS... ii DEFINITION OF TERMS... iv TABLE OF CONTENTS... vii LIST OF TABLES... viii I. INTRODUCTION... 1 A. Overall Project Description... 1 B. Field Interventions... 3 C. Core Subproject Structural Interventions Description... 3 D. Anticipated Involuntary Resettlement... 4 II. OBJECTIVES, POLICY FRAMEWORK, AND ENTITLEMENTS... 6 A. Objectives and Scope of the LARF... 6 B. Legal Framework... 6 C. Principles of Land Acquisition and Resettlement Policy for the Project D. Subproject Screening and Minimizing Involuntary Resettlement E. Entitles Parties, Eligibility, and Cut-Off Dates III. SOCIOECONOMIC INFORMATION A. Census of entitled party B. Socioeconomic Survey C. Inventory of Losses and Detailed Measurement Survey D. Replacement Cost Study and Assessment IV. CONSULTATION, PARTICIPATION, AND DISCLOSURE A. Consultation and Participation B. Institutional Roles in the Conduct of Consultations C. Disclosure V. COMPENSATION, INCOME RESTORATION, AND RELOCATION A. Compensation B. Relocation/Replacement Land and Income and Livelihood Improvement C. Unanticipated Impacts D. Additional Measures VI. GRIEVANCE REDRESS MECHANISMS A. General Flow of Grievance Redress B. Specific Grievances VII. INSTITUTIONAL ARRANGEMENTS AND IMPLEMENTATION A. Project Related Institutions and Their Role B. Institutions and Land Acquisition Process C. Institutions and Capacity Strengthening D. Project Implementation Specialist Consultants VIII. BUDGET AND FINANCING IX. MONITORING AND REPORTING A. Monitoring Arrangements B. Monitoring Indicators C. Reporting and Disclosure D. Assessment and Evaluation... 56

8 viii Appendix 1. Outline of a LARP Appendix 2. Subproject LAR Screening Checklist Appendix 3. Guide to Socioeconomic Survey (SES) with Dummy Tables Appendix 4. Sample and Template for the Consultation and Participation Plan Appendix 5. Negotiated Land Acquisition Form Appendix 6. Voluntary Land Donation Form Appendix 7: Term of Reference for Verification of Voluntary Donation Appendix 8: Specific for Subprojects with Land Clearing Function of the Resettlement Working Group Appendix 9. Sample of TOR for External Monitoring and Post Evaluation Appendix 10. Guide to Developing Monitoring Indicators Appendix 11. Internal Monitoring and Reporting Template LIST OF TABLES Table 1. Project Components per Output... 3 Table 2. Anticipated Impacts: Types of Losses... 4 Table 3. Some Gaps between Land Acquisition Law and Regulations with ADB SPS and Proposed Project Principles Table 4. Assessment Approaches According to Indonesia Valuation Standards Table 5. Entitlement Matrix For Land Acquisition and Land Clearing Table 6. Criteria and Guidance Notes on Voluntary Donation Table 7. Land Acquisition Process and Activities and Agencies and Timeframe under Law No. 2/2012 and ADB SPS Table 8. Cost Items for Land Acquisition Budget... 53

9 LAND ACQUISITION AND RESETTLEMENT FRAMEWORK A. Overall Project Description I. INTRODUCTION 1. Rationale. Indonesia is highly prone to flood hazards due to its climate and topography. 1 Flooding is a growing annual occurrence throughout most of the country imposing as much as $430 million per year in economic losses. 2 From 2003 to 2013, the country s average annual flood impact included: (i) 1.58 million affected persons; (ii) 350 casualties and 13,640 injured; (iii) 223,000 homes fully or partially damaged; and (iv) 168,000 hectares (ha) of crops inundated. 3 The floods sever vital transport arteries and often disrupt access to ports and airports, restricting the transfer of goods and services. In 2013, the Ciujung river flooding affected 19,674 households, displaced 50,527 people, and disrupted the traffic along the Jakarta-Merak toll road that connect Java to Sumatra island. 4 Despite its location in a drier region, in 2013, Ambon suffered from flash floods resulting in 59 destroyed and 45 damaged houses, 10 dead and 5 missing persons and 7,212 displaced people. 2. Flood impacts have worsened during the past 30 years. Deforestation and inappropriate agricultural practices, which result in erosion and increased sediment loads in waterways, 5 ultimately reduce the capacity of rivers to accommodate higher flows resulting from intense rainfall events. Expanding population combined with past lapses in spatial planning and land management has permitted substantial development in flood-prone areas, escalating the danger and damages from flooding. Urbanization increases area of impervious surfaces, causing greater peak flood flows. 6 Weak hydrological data acquisition and management, flood forecasting and climate risk modeling, and lack of integrated decision making processes among government agencies limit the ability to optimize the investment planning and maximize their returns. Incompleteness of investment and neglected operation and maintenance of flood protection infrastructure accentuate the adverse impacts of floods. In the absence of appropriate awareness and preparedness, the communities are highly vulnerable and at greater risk of loss of life and asset from frequent floods. 3. Climate change, manifested through an increasing frequency of intense rainfall events and rising sea levels, is expected to further exacerbate flooding risk. The impacts of intense and frequent flood events combined with the lack of economic and social capital to manage, and response to flood risks further limit the ability of many communities to come out of poverty. 7 Climate change is also expected to produce stronger and more frequent El Nino/La Nina events and will exacerbate floods and droughts, thereby leading to increased food and water insecurity. 1 Indonesia is prone to two main type of flooding: (i) long-lasting riverine floods in large river basins having steep slopes in upper part and long, flat and low floodplains (often influenced by tides) - these are characteristic of the large islands such as Java, Sumatra, Kalimantan or Iran Jaya; and (ii) flash floods, of short duration and high intensity, which occur in small and steep mountainous river basins, such as in small islands of Eastern Indonesia. 2 Centre for Research on the Epidemiology of Disasters (CRED). EM-DAT: The OFDA/CRED International Disaster Database. (accessed April 2014). 3 National Disaster Management Agency (BNPB). Indonesian Disaster Information and Data (DIBI). (accessed April 2014) National Agency for Disaster Management (BNPB). (accessed March 2015). 5 Degraded land in Indonesia is about 78 million hectare, consists of slightly degraded (48 million hectare), degraded (23 million hectare), and highly degraded (7 million hectare). ADB Indonesia Country Water Assessment. Manila. (PATA 8432-INO). 6 World Bank. May Java Water Resources Strategic Study has estimated that, at current trends, the urbanized area in Java will double within 30 years. 7 The total population in Banten and Ambon xxx poverty xxx

10 2 4. Indonesia adopted the integrated water resources management (IWRM) approach, which is being promoted through (i) the establishment of river basin management organizations (RBOs), 8 and (ii) the formulation of strategic basin plans (Pola) as a prerequisite to basin development plans (Rencanas). The Rencanas form the basis for the public investment in water resources management with an horizon of 20 years, including flood management. Implementation of the IWRM and participatory river basin management is still hampered by inadequate planning, investment, capacity and coordination. RBTs targeted by the Project are not an exception. There is a growing need for integrating structure and non-structural measures address the flood challenge holistically. 5. Water security is a central pillar of the Government s National Medium Term Development Plan (RPJMN), and promotes flood risk management (FRM) to reduce impact and damages of floods. FRM embraces a range of measures that address the three key components of flood risk management including (i) managing flood hazard, (ii) minimizing exposure to flood hazard, and (iii) reducing vulnerability of people and property exposed. Managing flood hazard involves physical modification of water flow such as river infrastructure works, and catchment management measures such as controls over forestry and agricultural practices. Managing exposure to floods involves property acquisition, land use zoning, building codes, planning development controls, and elevated building. Managing flood vulnerability involves non-structural measures such as community awareness, flood forecasting and warning, preparedness, emergency response, post-flood early recovery strategies, and flood insurance. 6. The Project will promote FRM to balance infrastructure investment with software measures. The Project will finance subprojects in two RBTs: (i) the Cidanau Ciujung Cidurian (3 Cis) in Banten Province, and (ii) the Ambon Seram in Maluku Province. The 3 Cis and Ambon Seram RBTs 9 - respectively affected by the two main type of floods, the riverine and flash floods have been selected to demonstrate the FRM approach as part of the operationalization of the RPJMN. The investment will help the Government to accelerate the implementation of the river basin plans (Rencanas) in those RBTs. Project interventions will (i) enhance data and information, management and institutional coordination for managing floods; (ii) upgrade and develop flood protection infrastructure; (iii) reduce erosion and improve watershed conditions; and (iv) prepare communities to manage floods. 7. Impact and Outcome. The impact will be reduced economic and social losses from flood events in selected river basins. The outcome will be reduced flood risks in Project river basins. 8. Components per Outputs. The project will have the following sub components grouped under four outputs 8 Sixty three river basin territories are under the responsibility of the central government, while 53 and 15 falls under the responsibility of the provincial and district agencies respectively. 9 The 3 Cis RBT covers an area of 4,125 km2 with a population of 3.63 million and lies mainly within the Banten Province, the most westerly province of Java. The Ambon Seram RBT is located on the islands of Ambon and Seram, in Maluku Province in eastern Indonesia with a population of 278,108 and an area of 18,625 km2.

11 3 Table 1. Project Components per Output Component Output 1: Enhanced knowledge base for flood risk management 1.A Enhanced basin data and information and preparation of flood risks management (FRM) plans for the 3 CIs RBT and Ambon Seram RBT (BBWS 3 Cis and BWSM) 1.B Institutional strengthening, planning and coordination for the implementation of FRM plans in 3Cis RBT and Ambon-Seram RBT (MOHA) Output 2: Improved land management and upgraded flood infrastructure 2.A Farmland management and sustainable agriculture practices in the Ciujung river basin (MOA) 2.B Improved runoff and erosion control in 3Cis RBT and Ambon-Seram RBT (MOHA) 2.C Detailed engineering design (DED) (including Environmental Impact Assessment (EIA), social safeguards, economic analysis, tender documents and river operation and maintenance plans) and Construction Supervision for the 3 CIs RBT and Ambon-Seram RBT (DGWR, BBWS 3 Cis and BWSM) 2.D Civil works for the 3 CIs and Ambon-Seram RBTs (Priority works, rehabilitation of flood control embankments, drainage system and associated control structures information) (BBWS 3 Cis and BWSM) Output 3: Enhanced capacity for community-based flood risk management (CBFRM) 3.A Enhanced capacity for community-based flood risk management in the 3Cis RBT and Ambon- Seram RBT (MOHA) Output 4: Effective project implementation 4.A Project Management (DGWR - MPW) 4.B Independent Monitoring, Evaluation and Strategic Coordination BAPPENAS (IME) BBWS 3CIs = Balai Besar Wilayah Sungai Cidanau-Ciujung-Cidurian, BWSM = Balai Wilayah Sungai Maluku, DGWR = Directorate General of Water Resources, MOA = Ministry of Agriculture, MOHA = Ministry of Home Affairs, MPW = Ministry of Public Works and Housing. B. Field Interventions 9. Of the four Project outputs, Output 2: Improved land management and upgraded flood infrastructure will result to activities that require land acquisition and resettlement (LAR): (i) 2.A Farmland management and sustainable agriculture practices in the Ciujung river basin (MOA) and 2.B Improved runoff and erosion control in 3Cis RBT and Ambon- Seram RBT (MOHA), with a participatory approach, through active involvement of farmers and communities. Activities will include (a) rainfall harvest, flood attenuation and erosion control micro dams in the tributaries and on the open slopes, water ponds for household uses, slope stabilization including terracing in the farm lands; and (b) agroforestry in public land area. (ii) Civil works for the 3 Cis and Ambon Seram RBTs (Sub Component 2.D). Under this component, a range of water infrastructure (new or rehabilitation) works will be implemented including, river bank, spill way, river widening, river and reservoir dredging, retention area, check dam, drainage improvement. Those activities under the BBWS 3 CIs and BWSM, will be implemented by contractors. Detailed engineering designs will be prepared to minimize LAR impacts. C. Core Subproject Structural Interventions Description 10. Ciujung River Basin. The Ciujung River is one of three main rivers and is the national river basin, including the Cidanau-Ciujung-Cidurian (3 Cis), which has a total area of 5,000 km 2. The catchment area of the Ciujung River is 1,860 km 2 (38% of the total district). Ciujung River consists of several tributaries that merge in upstream of Rangkasbitung (about 43 km from the river mouth), and flooding is reported to occur on the relatively flat floodplain along virtually the entire length of the river reaches downstream to the sea. Sediment deposition in the main river channels has reduced the discharge capacity of the Ciujung. Hydraulic modeling done during Project preparation shows that capacity of the lower reaches and mouth of the Ciujung has been severely reduced due to excessive sediment deposition, well below the average flood flows (Q2) that could normally be expected.

12 4 Flooding along the Ciujung frequently causes considerable damage and disruption. The flood in January 2013 caused extensive damage in the basin. In Lebak District along fifteen sub districts were often affected by the floods and landslides, and the flood depth reached over 3 meters leaving in some areas many families homeless. 11. Ciujung core sub project s structural interventions involve construction of new river dikes to retain 25 return period floods within the existing main river channel for an 11.8 km stretch downstream of the existing Pamarayan weir in an area where there are no existing river dikes The location of dike construction covers 5 sub-districts and 9 villages, located in the Serang district, as follows: (i) Panosogan, Katulisan, Gandayasa, and Penyabrangan villages in the Cikeusal sub district; (ii) Nagara village in Kibin sub district; (iii) Malabar and Blokang Bandung sub district; (iv) Dukuh village in Kragilan sub district; and (v) Kampung Baru village in Pamarayan sub district. Project and design alternatives have been developed to minimize involuntary resettlement. The location of borrow areas (borrow pits) are chosen from those located near or in the project area. Borrow pit 10 is required for the retrieval of soil material for embankment. Based on the initial investigation of the potential of the borrow pit located in 13 locations in Serang. Location selection of the 13 borrow pits is based on laboratory test results on the soil suitability. 12. Future Potential Subprojects. There are several potential projects that will be implemented in the future, such as activities to be carried out by BBWS 3Cis in Rangkasbitung region (covering 3 tributaries located upstream of the Pamayaran weir). The proposed subproject consists of: restoration of the river, embankment, parapet wall and pump along the 10.5 km of the river that flows through the city Rangkasbitung for which the DED, environmental impact assessment (AMDAL) and draft LARP will be prepared, has been identified as potential subproject by BBWS 3CIs. The BWSM confirmed the concept for the priority river basins using river restoration approach as developed in Semarang. The upgrading of the existing check dam and constructions of small check dams in the upper Batu Merah to (i) reduce flood peak; and (ii) retained sediment, will also be further assessed. The full list of potential subprojects is presented in Appendix 4 of the PAM. Future subprojects will be appraised, selected and prepared during project D. Anticipated Involuntary Resettlement 13. Based on the social assessment conducted at project preparation anticipated impacts specific to Output 2 were determined and summarized in Table 2. Table 2. Anticipated Impacts: Types of Losses Activities Under Output 2 Anticipated IR impacts Mitigating measure (i) Civil works for the 3 CIs and Maluku: Priority (i) Permanent or temporary loss of land (agricultural, Project management will ensure: works, check dams, residential, public, rehabilitation of flood forest); control embankments, (ii) Total or partial loss of retention basin, drainage system and associated control structures information structures (houses, shops, public buildings, others); (iii) Total or partial loss of crops and trees; (iv) Restriction of access to common property resources (i.e., river itself); (v) Loss of income. (vi) Loss of small portion of land and land revenue, if any, as it was donated (i) Meaningful consultations will be conducted with affected communities and interested groups from the early stage of the project planning phase of the project and will be carried out continuously throughout the project phases. (ii) Participation of affected persons or their duly appointed representatives in the preparation and implementation of the LARP (specifically to include: conduct of social assessment, monitoring, and disclosure).\ (iii) Promote transparency and information sharing with partners and affected communities. (iv) Capacitate implementers on culturally acceptable and gender sensitive approaches to 10 Borrow pit is a term used in construction and civil engineering. Describing a place where material (usually soil, gravel or sand) is excavated for use in other locations. It can be found close to the project site. For example, the soil excavated for the construction of embankments and highways.

13 5 Activities Under Output 2 Anticipated IR impacts Mitigating measure for the watershed consultations. rehabilitation and management program (v) Preparation of LARP that ensure APs/ entitled or sustainable parties are better off or at least at par with their agricultural land pre-project living standards and compliant with management program ADB SPS and Indonesia s laws and regulations; work complementary with other agencies in supporting social services and activities for vulnerable people and APs. Farmland Program, sustainable agriculture practices and watershed rehabilitation; requires a voluntary donation of land (small-scale) of the community. No IR (vi) Preparation of social action plan (SAP) in collaboration with the local governments to restore the income sources and livelihoods of vulnerable and severely households affected by the project activities. (i) Perform verification to ensure that the voluntary contributions are completely voluntary through information conveyed verbally or in writing, and through an independent third part. (ii) Ensuring that donations do not have a negative impact on the standard of life of affected persons and provide them benefits

14 6 II. OBJECTIVES, POLICY FRAMEWORK, AND ENTITLEMENTS A. Objectives and Scope of the LARF 14. The principal objectives of this LARF are to: (i) Avoid involuntary resettlement wherever possible; (ii) Minimize involuntary resettlement by exploring project and design alternatives; (iii) Enhance, or at least restore, the livelihoods of all displaced persons in real terms relative to the pre-project levels; and (iv) Improve the standards of living of the displaced poor and other vulnerable groups. 15. This LARF covers both physical and economic displacement as a result of (i) involuntary acquisition of land; or (ii) involuntary restrictions on land use or restrictions on access to and from the parks and protected areas as set by law. Displacements can be full or partial, permanent or temporary. Per ADB-SPS 2009, physical displacement refers to relocation arising from the loss of residential land or loss of shelter while economic displacement refers to loss of land, assets, access to assets, income sources, or means of livelihoods. Restrictions on land and resource use refer to the imposition of involuntary restrictions on the use of resources on people who live around or within such areas. 16. The LARF was prepared by the Directorate General of Water Resources, Ministry of Public Works and Housing as the executing agency of the project. The LARF establishes basic principles and guidelines that should be adhered by the implementing agencies in the selection of subproject, screening and categorization of sub-projects, resettlement assessment, preparation and implementation of Land Acquisition and Resettlement Plan (LARP) for the future sub-projects. Appendix 1 provides an outline of the preparation of LARP. B. Legal Framework 1. National Laws of the Government of Indonesia 17. Indonesia recently enacted a new land acquisition law for development in the public interest, 11 Law No. 2/2012 and its implementing regulations i.e. (i) President of the Republic of Indonesia Regulation No. 71/2012 and President of the Republic of Indonesia Regulation No. 40/ on the Amendment to the President of the Republic of Indonesia Regulation No. 71 of 2012; 13 ; (ii) Head of National Land Agency No. 5/2012; 14 (iii) Ministry of Finance 11 Public Interest means the interest of the people, state, and society that must be realized by the government for best prosperity of the people. Please see Law No. 2/2012, General Elucidation. 12 President of the Republic of Indonesia Regulation No. 40/2014, changes the content of Article 121 of President of the Republic of Indonesia Regulation No. 71/2012 stipulates that, in the context of efficiency and effectiveness, land acquisition for public purposes of no more than 5 hectares can be implemented directly by the agency requiring land with the land rights holders, by way of sale or exchange or other means agreed upon by both parties. 13 It further regulates provisions under the land acquisition law that include i) land acquisition planning that include required information to be included in the land acquisition document; ii) land acquisition preparation that covers preparatory team and it tasks, stages and detailed activities for the project location determination; iii) land acquisition implementation by National Land Agency that include detailed provisions on land acquisition implementation team, preparation of land acquisition implementation, inventory of identification of losses, determination of independent appraiser, deliberations on the forms of compensation, delivery of compensation payment, delivery of compensation in the special circumstances, deposit compensation payment, release of the land acquisition objects, termination of rights between the entitled parties and land acquisition objects, recording and administrative data; iv) transfer of acquired land,; v) other provisions that include monitoring and evaluation, source of fund for land acquisition, negotiated land acquisition for small plot of land (less than 1 hectare; vii), tax incentive for entitled parties except who make claims on the decision on the location determination and decision on the amount of compensation. 14 It provides technical guidelines on land acquisition implementation by Land National Agency.

15 7 Regulation No. 13/PKM.02/2013; 15 and (iv) Ministry of Home Affairs Regulation No. 72/2012). The law and regulations were issued to ensure land acquisition for the implementation of development for the public interest, with the emphasis on the principles of humanity, democratic, and equitable. These legal provisions replaced previous land acquisition laws and its implementation regulations (President of the Republic of Indonesia Regulation No. 65 of 2006; President of the Republic of Indonesia Regulation No. 36/ 2005; BPN Head Regulation No. 3/2007). 18. Law No. 2/2012 provides a clear procedure and timeframe for land acquisition involving all stakeholders with a clear procedures and time frame. The implementation of land acquisition considers balance between development interest and the interests of the community and by way of giving appropriate and equitable compensation. The objective of land acquisition is to make land available to improve the welfare and the prosperity of the people, state, and society by ensuring the legal interest of the entitled parties. The provision of the transitional law stipulates that the land acquisition started before the enactment of the new law will be completed in accordance with the rules or regulations applicable previously, while the land acquisition implemented after the enactment of the new law will be conducted under the provisions of the law No 2/ The President of the Republic of Indonesia Regulation No. 71 of/2012 stipulates that the previous regulations will still apply if (i) the planning document on land acquisition has been prepared prior to the law promulgation; or (ii) land acquisition will be completed prior to 31 December The Project is considered as a development for public interest, the land acquisition for the project is undertaken after the promulgation of the land acquisition law so that the land acquisition is implemented in reference to the Law No. 2/2012 and its implementing regulations. The law stipulates that government should undertake development for the public interest and the land belongs to the government or regional government or State Owned Enterprises while the development in the public interest is the responsibility of the government and it can cooperate with State-Owned Enterprises, Regional-Owned Enterprises, and Private Owned Enterprises. 20. Based on Law No. 2/2012, the government should undertake land acquisition by involving all entitled holders (pihak yang berhak) and concerned. The entitled parties shall be those who control or own the object of the land acquisition, inter alia: (i) the holders of land rights; (ii) the holders of land rights to manage; (iii) nadzir for the waqf land; 17 (iv) the owners of former customary rights secured land; (v) indigenous people/customary communities; (vi) the parties occupying the state land in good faith; (vii) land tenure holders; and/or (viii) the owners of buildings, plants or other objects related to the land. The object of land acquisition includes: (i) land; (ii) over ground and underground space; (iii) plants; (iii) buildings; (iv) objects related to land; and (v) other appraisable loss that include non-physical loss such as loss of business, loss of job, cost of change of location, cost of change of profession, and loss of the remaining property (residual property that is no longer viable). 18 Land acquisition implementation is handled by the National Land Agency, conducted by providing fair and adequate compensation. The Law 2012 recognizes that a location determination will be required prior to land acquisition. 19 Acquisition of land for public interest less than 1 hectare 15 It stipulates on operational and support costs for land acquisition implementation (planning, preparation, implementation, and land transfer phases) that come from the government budget. The regulation provides a detailed guidance on maximum cost for land acquisition preparation and implementation. 16 For the land acquisition being done and there is remaining land that will not be able to be completed by 31 December 2013, hence the remaining land should be acquired using provisions under the new land acquisition law and its implementation regulations. Please see Presidential Decree No. 71/2012 article Waqf - an inalienable religious endowment in Islamic law, typically donating a building or plot of land or even cash for Muslim religious or charitable purposes. The donated assets are held by a charitable trust or waqf organizer. 18 Elucidation of Article 33, Law No. 2/ Article 19 (5) specifies that "After the agreement referred to in paragraph (4), Agency requiring land must apply to the government for confirmation of the location".

16 8 can be conducted by the institution needing the land through sale transaction, exchange, or other means acceptable to both parties Compensation for losses in terms of land acquisition and resettlement activities as stipulated in the provisions of Law Number. 2/2012 now covers Other appraisable loss. 21 Losses in terms of restriction/limitation or restriction to access to natural resources such as marine-fishery resources that can impact on the economic activities of people are now categorized as losses by the new Law and may be valuated for compensation purposes and may be in any of the following forms (Article 36): (i) money; (ii) substitute land; (iii) resettlements; (iv) shareholding; or (v) other forms as agreed upon by both parties. 22. Law No. 2/2012 and its implementation regulations are applicable to the activities of land acquisition for the construction for the public interest 22 carried out by government with appropriate and equitable compensation. Various discussions with institutions that have the authority to provide an explanation of the provisions of the law, such as the AGO and BPN asserted that Law No. 2/2012 only applicable to land acquisition, where the object to be acquired are the property of other party and not owned by institutions requiring land. Acquisition of land belonging to the institution requiring land is regarded as a land clearing. In this context, the Government Regulation in lieu of Law Number 51 of 1960 on the prohibition of land use without the consent of the entitled party or his proxy is still applicable. Nevertheless, the Government Regulation in Lieu of Law Number. 51/1960 is deemed not provide protection to the entitled party and therefore is not widely implemented. 23. In many areas, practices of land clearing of asset or occupation of other parties (nonland rights holders) are conducted by giving a kadeudeuh money (allowance) or replacement of the assets acquired and resettlement assistance in the West Tarum Canal Rehabilitation Project in return for the land clearing, compensation was granted on the affected assets, loss of business income, as well as relocation assistance. This compensation scheme is set forth in the Decree of the Governor as its legal basis. In some other projects (Road Rehabilitation Project 2) of the Ministry of Public Works and Housing, compensation, either in cash or resettlement provision is also given to people occupying state land for their loss of assets, and income. While various projects in Jakarta, the Government of Jakarta provide resettlement facilities and means required to restore economic income of the displaced residents. 24. Other relevant laws, regulations and provisions are: (i) Related to IP/Customary/Adat a) Law No. 5/1960 concerning Basic Agrarian Affairs acknowledges customary rights of Indigenous Peoples (IPs). b) Law No. 32/2004 concerning Local Government establishes state respect of customary and traditional rights and laws, devolves authority to village or customary governance systems and empowers them to promulgate customary village rules that may affect projects e.g. levying land transaction tax. c) Law No 38/2004 Concerning Streets/Roads. Article 58 of Law 38/2004 says that land acquisition for road development for public use is carried out based on City/ district spatial management plan and the project must be informed to the affected people. Further, land right holder or state land user or customary law community whose land is needed for development are entitled for compensation that will be carried out 20 See Regulation of the Number 40/2014 an amendment to Article 121 of the President of the Republic of Indonesia Regulation No. 71/ Per Article 33 of the Land Law 2012 means nonphysical loss equivalent to money value, for example, loss due to loss of business or job, cost of change of location, cost of change of profession, and loss of value of the remaining property. 22 Public interest is the interest of the nation, state, and society that must be realized by the government and used as much as possible for the prosperity of the people. Law No. 2/2012, General Elucidation.

17 9 through consensus. d) Law No 27/2007 Concerning Management of Coastal Areas and Small Islands. Article 61 declares that government recognizes, respect, and protect customary rights, traditional community and local wisdom over coastal areas and small islands that have been utilized e) Law of the Republic of Indonesia No. 1/2014 on the Amendment to Law Number 27/2007 on Management of Coastal Areas and Small Islands. f) Constitutional Court Decision (MK) canceled the provisions of the Forestry Law No. 41/1999 on indigenous forests, which establishes that indigenous forest is state forest in the area of indigenous peoples. This Decision excluded indigenous forest within the state forest. (ii) Related to compensation and Improvement of living standards a) Law no. 41/1999 Law on Forestry regulates land acquisition in forests, requiring compensation land to be acquired for afforestation in a ratio of 2:1 b) Law No.11/2005 on the Ratification of the International Covenant on Economic, Social and Cultural Rights. This Act protects people rights of economy, social, and culture including right to live descent and protection of culture. As stated in Article 11 of the Convention that the state recognizes the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The State will take appropriate steps to ensure the realization of this right, recognizing the importance of international cooperation based on free consent and proclaimed previously. c) Act No.41/2009 on Protection on Agricultural Land for Sustainable Food stipulates special compensation if a project impacts sawah (wet rice) land, which is important to food security. d) Head of BPN Regulation No. 1/2010 on Standard of Land Service and Regulation regulates the time frame for certification of the remaining land after compensation payment. e) Presidential Decree No. 34/2003 on National Policy on Land- regulates authorities of national and local governments on land. It stipulates that the authorities of local government on land include; (i) undertake land acquisition for development; and (ii) provide compensation and allowance (santunan) for land acquisition. The Indonesian Government Regulation No. 38/2007 about the distribution of state activities between the Central Government, Provincial Government, and district/ municipality government. Government regulations set the state activities that must be conducted by the provincial government and district / municipality government related to basic services 23 including among others land issues. 24 f) Indonesia Valuation Standards 306 (SPI 306) on the Assessment of Land Acquisition for Development for the Public Interest. The Indonesia Professional Appraisers Society (MAPPI) formulated the standards by adopting the development of international standards (IVS 2011). Standards 306 provides guidelines for 23 Article 7 Paragraph Compulsory activities reference to Article 7, Section 2 includes a. education; b. health; c. the environment; d. public works; e. spatial planning; f. development planning; g. housing; h. youth and sport; i. capital investment; j. cooperatives and small and medium enterprises k. demographic and civil registry; l. employment; m. food security; n. empowerment of women and protection of children; o. family planning and family welfare; p. transportation; q. communication and informatics; r. land; s. national unity and internal political; t. regional autonomy, public administration, regional financial administration, the regional equipment, personnel, and coding; u. empowering communities and villages; v. social; w. culture; x. statistics; y. archives; and z. library.

18 10 assessment of land acquisition object for compensation in land acquisition for development for the public interest. Assessment includes the adequate replacement value of property and land. Assessment standards are also associated with other standards, such as scope of assignment, land property and structures valuation, farmland property valuation, valuation of property with particular business, business valuation, and inspection of cases under consideration. (iii) Related to Water Resources Management a) Regulation of the President of the Republic of Indonesia No. 12/2012 on Determination of the river basins between Regional and National Authority. b) Government regulation (PP) No. 38/2011 with regard to river management; Ministry of Public Work no. 63/ 1993 with regard to river bank. Regulate riverbank (Bantaran) use, river and Sempadan right of way and benefits derived from the rivers/streams. The integrity of the riparian function is a key consideration in any review for status quo. (iv) Related to Vulnerability and Severity Assistance a) The Law No. 11/2009 on Social Welfare and its implementing regulation Ministry of Social Welfare Decree No. 39/2012 on Delivery of Welfare. b) Law No. 39/1999 On Human Rights (Article 5, elucidation), describes the vulnerable groups include the elderly, children, the poor, pregnant women and people with disabilities. c) Vulnerable / severely affected people are identified as early as possible through the Social Impact Assessment of AMDAL as referred to in the Environmental Law no. 32/2009 on Environmental Protection and Management; Indonesia Government Regulation on the Environmental Permit, Ministry of Environment Regulation No. 17/2012 with regard to participation guidance of local community in order to obtain AMDAL and Environmental Permit Issuance. Decree of the Head of Environmental Impact Management Agency No. 299/1996 on Guidelines for the Technical Assessment on Social Aspects in Preparation of the Environmental Impact Analysis. (v) Related to Tax Incentive a) Income Tax Rate of Land and / or Building ownership transfer b) Basic Law: Government regulation (PP). 48/1994 jo; PP. 27/1996 jo; PP. 79/1999 jo; PP. 71/2008. On the Third Amendment to Government Regulation No. 48/ ADB Safeguards Policy Statement of The objectives of the ADB social safeguards policy are to avoid involuntary resettlement whenever possible; to minimize involuntary resettlement by exploring project and design alternatives; and to enhance, or at least restore, the livelihoods of all displaced and vulnerable persons in real terms relative to pre-project levels; and to improve the standards of living of the displaced poor and other vulnerable groups. The policy indicates four important elements in involuntary resettlement: (i) (ii) (iii) (iv) Avoid the need for involuntary resettlement by exploring project and design alternatives; If avoidance is not possible, compensate for lost assets and loss of livelihood and income of displaced / affected population so that their livelihood will be enhanced or at least equal or restored to the pre-project level; Assist in relocation including provision of relocation sites with appropriate facilities and services; and Enhance the living standards of the poor and other vulnerable affected/ displaced groups.