New Local Government Law

Review of the New Local Government Law:
What are the new distribution of functions and authority between national and local governments for natural resource management?

rubber_smallest New Local Government Law


In September 2014, the Indonesian government enacted the new Local Government Law, Law No. 23/2014 that replaced the old Local Government Law, Law No. 32/2004. Although it recentralizes some authority back to the central level, the new law provides clearer guidance related to the distribution of governmental functions between the central and local governments. This article summarizes the legal analysis of the old and new Local Government Laws. Specifically, this article will analyze the shift of authority and distribution of governmental functions among the central, provincial, and district governments, especially with regards to land-based sectors, including forestry, land, agriculture, and spatial planning.

The analysis finds that there are a number of significant changes to the distribution of governmental functions and authority with regards to the aforementioned sectors. In the forestry sector, the central government retains the authority over state forest areas, which includes the planning and licensing process, the implementation of forest management and monitoring. Specifically at the implementation level, the authority for the forestry sector is closely related to the authority for Forest Management Units (FMU). The authority, which was previously distributed among district/municipal or provincial governments, has now been allocated solely to provincial governments. In the land sector, the new law devolves most of the authority for land functions to the provincial or district/municipal governments. With regards to spatial planning, there is no significant change in the distribution of governmental functions between the old and new Local Government Laws. in terms of licensing, according to the new law, a district/municipal government has the authority to issue more permits than the central government, while, a provincial government does not even have any licensing authority regarding spatial planning.

The implementation of the new law will depend on a number of operational regulations, one of which is the revision of Government Regulation No. 41/2007 on Local Organizational Apparatus, which is under the auspices of the Ministry of Home Affairs. In the absence of such regulations, this article suggests different scenarios that may be applied by the national government to implement the Law.

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