Constitutional Court Ruling on IKN Land Rights Creates Uncertainty

Background and Decision

The Indonesian Constitutional Court (MK) has annulled the previously implemented double cycle land rights scheme for investments in Nusantara Capital City (IKN), creating new uncertainty in the investment landscape ¹

. This decision effectively reinstates the previous limitation on land use rights, with Hak Guna Usaha (HGU) and Hak Guna Bangunan (HGB) restricted to a single extension, resulting in a maximum total tenure of 95 years ¹

Source 1

https://nasional.kontan.co.id/news/mk-batalkan-skema-hak-atas-tanah-ikn-investor-cemas-ketidakpastian-hukum

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Government Response and Rationale

Despite investor concerns about potential negative impacts, the government remains confident that this ruling will not deter investment in IKN ²

. Minister of ATR/Head of BPN, Nusron Wahid, stated that the Constitutional Court's decision actually strengthens legal certainty by aligning with the national constitution ²

Source 2

https://finance.detik.com/infrastruktur/d-8213868/pemerintah-pede-investasi-tak-terhambat-meski-hak-guna-lahan-ikn-batal

. The ruling is seen as consistent with Article 33 of the 1945 Constitution, which emphasizes state control over natural resources.

Impact on Investment and Legal Certainty

The decision has sparked mixed reactions. While investors are concerned about the potential negative impact on investment psychology due to perceived legal uncertainty ¹

, government officials argue that the ruling enhances legal certainty and is in line with constitutional mandates ²

Source 2

https://finance.detik.com/infrastruktur/d-8213868/pemerintah-pede-investasi-tak-terhambat-meski-hak-guna-lahan-ikn-batal

. The administration of President Prabowo Subianto has emphasized commitment to maintaining a fair, transparent, and modern development process for IKN.

Implementation and Adjustments

The government has assured that ongoing land rights processes will continue with necessary adjustments to comply with the Constitutional Court's ruling ²

. This development highlights the complex balance between attracting investment and maintaining constitutional adherence in Indonesia's capital city development plans.