Saturday 19 May 2012

Some Observations on UNTAET Regulation No 27 of 2000 on the Temporary Prohibition of Transactions in Land in East Timor by Indonesian Citizens not Habitually Resident in East Timor and by Indonesian Corporations

Original Citation: 2004 ETLJ 3

Introduction and Background
This regulation was enacted by the Transitional Administrator on 14 August 2000. As the title suggests, it temporarily prohibits transactions in land in East Timor by Indonesian citizens not habitually resident in East Timor and by Indonesian corporations.

During the Indonesian occupation of East Timor which began with the full-scale invasion on 07 December 1976 until the the administration of the territory was granted by the United Nations Security Council to UNTAET (United Nations Transitional Administration in East Timor), the Indonesian State granted about 40 000 land rights under its Basic Agrarian Law; many of which grants were made to Indonesian citizens and corporations. In the lead up to the Popular Consultation which occurred on 30 August 1999 and in the wake of the destruction of the country by the Indonesian military and militia groups, most Indonesians fled East Timor and abandoned their properties. Many of the Indonesian citizens who fled subsequently sold or leased their land to either East Timorese citizens or to the many foreigners and foreign businesses who entered East Timor once law and order had been restored by INTERFET (the International Force in East Timor led by the Australian military).

This was seen as unjust enrichment of of Indonesian citizens and corporations, who, although they may not have borne personal responsibility for the mass human rights abuses and the destruction of the country, were nonetheless citizens of an illegal and tyrannical occupier that had caused immeasurable pain, suffering and death to the East Timorese people and nation and which had no intention of making reparations for the massive losses of life and property during its brutal occupation.

This alone should have been enough reason to enact a law prohibiting the sale or lease of land in East Timor owned by Indonesians. The considerations in the preamble of this Regulation state that the Regulation was enacted "[f]or the purpose of ensuring that, pending the outcome of assets and claims discussions between UNTAET and the Government of the Republic of Indonesia, the legitimate claims of the people of East Timor against the Republic of Indonesia, Indonesian citizens, and Indonesian corporations, are not prejudiced."

Overview of UNTAET Regulation No 27 of 2000
Regulation No 27 therefore provided in Article 1 that:

Until decided otherwise by the Transitional Administrator, any contract or agreement, whether in writing or otherwise, by:
(a) a citizen of Indonesia not habitually resident in East Timor; or
(b) an Indonesian corporation,
to sell any interest in land in East Timor or any land right in East Timor, shall have no effect.

It further provided in Article 2 that:

Until decided otherwise by the Transitional Administrator, any contract or agreement,
whether in writing or otherwise, by:
(a) a citizen of Indonesia not habitually resident in East Timor; or
(b) an Indonesian corporation,
to grant any leasehold interest in land in East Timor, shall have no effect.

By Article 3, the Regulation also compelled the Courts of East  Timor not to enforce any such contract or agreement.

For the purposes of the Regulation, “Indonesian corporation” was defined as "a corporation that has been incorporated in Indonesia or a corporation in which an Indonesian citizen has a controlling or substantial interest."

Some Technical Deficiencies in the Drafting of the Regulation
It should be noted that there are several critical fundamental deficiencies in the drafting of the Regulation.

The first is that it failed to provide a definition of the term "habitually resident in East Timor"

The second is that there was no mechanism for determining whether a corporation was one in which an Indonesian citizen had a controlling or substantial interest. Most records of the incorporation of corporations operating in East Timor were either held in Indonesia (filed with the Ministry of Justice) to which the Indonesian government would no doubt have denied access, or, if there were records of incorporation in East Timor, most, if not all, would have been removed or destroyed. There is, furthermore, no definition of the term "controlling or substantial interest".

Thirdly, many East Timorese formally held Indonesian citizenship. They did not acquire East Timorese citizenship until the creation of the State of East Timor on 20 May 2002 and so any corporation in which an East Timorese person had a substantial or controlling interest (whatever that was intended to mean), would have been affected, unjustly, by the Regulation.

Fourthly, UNTAET created no implementing agency with responsibility for enforcing or monitoring the Regulation so it failed, in many cases, to ensure compliance.

Substantive Defect in Regulation No 27 Causing Injustice to East Timorese People
But the most profoundly astonishing, curious and unjust result of this regulation arises from its retroactivity. Article 5, the final article of the Regulation, provides that "[t]he present regulation shall be deemed to have entered into force as of 25 October 1999."

The Regulation was enacted 282 days after UNTAET was authorised to administer the territory. All transactions for the sale of land by the affected Indonesian citizens and corporations (the latter of which, in effect, meant all corporations, whether or not an East Timorese person held the controlling or substantial interest since such a person was also formally an Indonesian citizen) which were effected during that period were of no effect and unenforceable. This means that if an East Timorese person had purchased land from an affected Indonesian citizen or corporation and had thereby paid valuable consideration, he or she had lost the purchase price and had acquired no right. But worse still, the affected Indonesian citizen or corporation vendor had the purchase price in hand and yet still retained the title! There is practically no chance of recovering that lost purchase price because the transaction was not enforceable by the Courts of East Timor and even if it had been enforceable, execution in Indonesia of any order by an East Timorese court would be impossible.

The same problem arises in relation to any leases effected by affected Indonesian citizens and corporations and so any East Timorese (or foreigner of foreign legal entity which had lease land for the purposes of either residence or business found themselves to be in a most unenviable position by cause of this Regulation.

The problems arising from this Regulation were brought to the attention of the highest levels of UNTAET by the Land and Property Unit soon after it was enacted with a recommendation that the regulation be revoked or amended to resolve these problems. However, the administration ignored the recommendations.

Like so much of the UNTAET legislation, Regulation 27 was badly drafted and/or not enforced and left a legacy of new complex problems for the East Timorese in an area of the most critical importance - land.

Warren L. Wright BA LLB
Dili, 06 March 2004
Articles 2004

5 comments:

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Index

2011

1. The Rule of Law: Theoretical, Cultural and Legal Challenges for Timor-Leste

2010


2009


2008


1. Justice for Serious Crimes Committed during 1999 in Timor-Leste: Where to From Here?

2. Joint Command for PNTL & F-FDTL Undermines Rule of Law & Security Sector Reform in Timor-Leste

3. Criminal Justice in East Timor and the Constitution of East Timor

4. Commentary on the Draft Arms Law in Timor-Leste

5. Deleted

2007

1. The Law on Political Parties (No 3/2004) & the Decision of the Timor-Leste Court of Appeal in the case of Vitor da Costa & Ors v Fretilin

2. Ethnicity, Violence & Land & Property Disputes in Timor-Leste

3. East Timor: Reconciliation & Reconstruction

4. Legal opinion on the appointment of the Prime Minister and the formation of Government in Timor-Leste

5. A legal opinion on the Formation of an Unconstitutional Government in Timor-Leste

6. Commission for Truth Friendship East Timor Competing Concepts of Justice

7. 25th of May 2006 Massacre & War Crimes in Timor-Leste

2006

1. Some Land Tenure Issues in Post-Conflict East Timor

2. Extradition from Indonesia to East Timor & the Serious Crimes Process in East Timor 1999 - 2005

3. East Timor: Internal Security, States of Seige & Emergency: A Note on the Constitutional Provisions & the Internal Security Law 2003

4. East Timor: The Constitutional Process Governing the Dismissal of the Government

5. Guidelines for Preparation of Outgoing Requests by East Timor for International Judicial Assisstance - Extradition Requests & Letters Rogatory - A Practice Manual

6. Roles of the President and the Prime Minister in the Current Constitutional Crisis in East Timor

7. Institutions & the East Timorese Experience

8. An Early Warning System for Timor-Leste: A Framework Concept of the Need & Possibility of an Early Warning System for the Timorese People

2005

1. The Timor-Leste Maritime Boundaries Case

2. Deleted

3. On the occasion of the International Conference on Traditional Dispute Resolution & Traditional Justice in Timor-Leste

4. General Facts on the Timor Sea & Facts on the Negotiations on a Permanent Maritime Boundary between Timor-Leste & Australia

5. Deleted

6. Morality, Religion & the Law: Abortion & Prosititution in East Timor

2004

1. A Note on Land Rights in East Timor (Indonesian Government Regulation No 18 of 1991 on the Conversion of Land Rights in East Timor) & the Purported Suspension of Article 5 by Government Regulation No 24 of 1992

2. UNTAET Land Policy


3. Some Observations on UNTAET Regulation No 27/2000 on the Temporary Prohibition on Transactions in Land by Indonesian Citizens

4. Sandalwood & Environmental Law in East Timor

5. Some Observations on the Report on Research Findings & Policy Recommendations for a Legal Framework for Land Dispute Mediation in East Timor

6. An Overview of East Timor's Law No 1 of 2003 on the Juridical Regime on Immovable Properties

7. Report on Research into Adat Land Law in East Timor

8. Short Analysis of UNTAET Executive Order No 2 of 2002 on the Decriminalisation of Defamation

9. An Overview of the Constitutional Drafting Process in East Timor

10. Some Notes on East Timor Government Decree No 1/2004 on the Orthographical Standard of the Tetum Language

11. UNTAET Guidelines for the Administration of Public & Abandoned Property by District Administrations

12. Tara Bandu: The Adat Concept of the Environment in East Timor

13. Finding Ways of Resolving Land Problems in East Timor