Document ofI nu W Oriu EkMIL

FOR OFFICIAL USE O-N-LY

ReportNo: 23684

IMPLEMENTATION COMPLETION REPORT(CPL-37920; SCL-3792A; SCPD-3792S)

ONA

LOAN

IN THE AMOUNT OF US$80 M[LLION

TO THE GOVERNMENT OF

INDONESIA

FOR A

LAND ADMINISTRATION PROJECT

06/19/2002

This document has a restncted distibution and may be used by recipients only m the pertormance of teirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 1993)

/. . lrT_:. _ n:T_m_UIU1., %OUL fL%UpaJI4L FPJ

Rp.1,000 US$ 0.475US$ 1 = Rp.2,105

Rp 2,200 (1994)Rp 2,308 (i995)Rp 2,383 (1996)Rp 4,650 (1997)Rp 8,025 (1998)Rp 7,100 (1999)Rp 9,675 (2000)RplO,100 (2001)

6O1FISCAL YEAR

Until March 31, 2000, April 1 -March 31Until December 31, 2000, April 1 - December 31From January 1, 2001, January 1 - December 31

ABBREVIATIONS AND ACRONYMS

AIDAB - Austualirnu inturnaioiai Develupment Assistance BureauAusAID - Australian Agency for International DevelopmentID A UDDT No C!_Neiwo DAAO-fD^;oooL,t.af.m ,S* SS*.FAAI r-- SSBS . - an

6s 8*9--'

BPN - Badan Pertanahan Nasional (National Land Agency)CR.q - Customer Relations and ServicesGIM - Graphic Index MappingGOI - Government of IndonesiaKABUPATEN - DistrictKEPRES - Presidential DecreeKPI - Key progress IndicatorLAP - Land Administration ProjectLASA - Land Administration Systems Australia (Technical Assistance Team)LOs - Land OfficesMoHiA - Mivnistry o Homne AffiairsMSUK - Management Support Unit Kanwil (Province)INOTTVW M.,f C.-... I,,, S..V....-pp. Dl-.:-- T .'.oArPe.-.

MSUP - Management Support Unit Pusat (BPN Central Office)PRBB rAnd TaxPUSDIKLAT - Centre for Education and Training (BPN)SAR - Staff Appraisal ReportSTPN - National Training Institute (BPN)UUPA - Basic Agarian (Land) Law

Vice President: Jemal-ud-din Kassum, EAPVPCountry Manager/Director: Mark Baird, EACIF

Sector Manager/Director Mark Wilson, EASRDTask Team Leader/Task Manager: William Cuddihyv FASRRD

FOR OFFICIAL USE ONLY

INDONESIALAND ADMINISTRATION

CONTENTS

Page No.

2. Principal Performance Ratings 13. Assessment of Development ObJeciuve and Design, and of Quality at Entry 14. Achievement of Objective and Outputs 45. Major Factors Affecting Implementation and Outcome 96. Sustainability 107. Bank and Borrower Performance 108. Lessons Learned 119. Partner Comments 1310. Additional Information 13Annex 1. Key Performance Indicators/Log Frame Matrix 14A.nnex 2. Prni,p. Cot netc Fintnt'cinc 15Annex 3. Economic Costs and Benefits 17A --- A 1D.-.L I... n^U-vx -4. D1WI& L-ap-* LU

Annex 5. Ratings for Achievement of Objectives/Outputs of Components 22Annex 6. Ratings of Bank and Borrower Performance 23Annex 7. List of Supporting Documents 24Annex 8. Beneficiary Survey Results 25Annex 9. Stakeholder Workshop Results 28Annex 10. Summary of the Government ICR 30Annex 11. AusAID ICR Summary 36

This document has a restricted distribution and may be used by recipients only inthe performance of their official duties. Its contents may not be otherwise disclosed

1,n +1t ut W,vur 1Rd nLt auithnr,zaonn

j Project ID: P003984 jProject Name: LAND ADMINISTRATIONTeam Leader: William L. Cuddihy TL Unit: EASRDICR Type: Intensive Learning Model (ILAM) of ICR IReport Date: June 20, 2002

1. Project Data

Name: LAND ADMINISTRATION LIC/TF Number: CPL-37920;SCL-3792A;SiC-iD3792S

Country/Department: INDONESIA Region: East Asia and PacificRegion

Sector/subsector: VM - Natural Resources Management

KEY DATESOriginal Res-v-e--Ac.uaI

PCD: 04/01/92 Effective: 11/18/94 11/18/94AppruaLul. IVIZ." 793 MAIn. 09/14i/9 I::10:9

Approval: 09/15/94 Closing: 09/30/2000 12/31/2001

Borrower/lImplementing Agency: GOI/BPN

."UL-- A..-ATT'% ~ ~ A. .....

L.hefr Pa-tnes: C A us ^ P',e:L Cofltr -naMX,irg USS:J r,..l:ion

STAF C-r t , o A, A--.'-Is0 LrL' %, Z1-%Lt%F IJ1CdbI

Vice President: J. Kassum R. Cheethamcountry M'anager: M. Bair,d M. Laug

Sector Manager: M. Wilson J. Hitchings (Acting)Team Leaerat ICR: . v'y. A-udd:l. A. Nisio

ICR Primary Author: W. Cuddihy

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=HighlyUnlikely, HU=Highly Unsatisfactory, H=High, SU-Substantial, M=Modest, N=Negligible)

Outcome: S

SJtaIla nsilaly. L.

Institutional Development Impact: M

Bank Performance: S

Rorrower Perforntance: S

QAG (if avauabwe) KC

Quality at Entry: Srroject at Risk at Any Time:

3 A ssfsment of Dlopment Ob,ieve and Design and f ality at En *y.3. fOfl.0Wt4 3 V .V r-Zffl ~~"J- V. %,l 44-% X~lrA, OCBM VJN V"UUCJ Ut %C 3

3.1 Original Objective:The objectives of the project were to improve efficiency and equity of Indonesia's land markets and toassist in further development of land managemnent policies. Achievement of these objectives would reduceconflicts over land, increase security of tenure, and alleviate poverty.

a) Relevance: These objectives were directly relevant to Indonesia's rapid growth and structural change.in. LLe Ial fl9v's, *U- need fr_ a -- A,et an__.t A_'r *ogLe ^.- 1-- Aef-i:vnof. _ tLay UI-.VML A 7~7vUm 11%UU U L%L '"X'W!GI.JL~IL MMU k.%,U1LG&W U'uO VrVJL-UiL Will. '.,Il,L UllJJUUUVU WIL Ii5AALO

being registered was recognized as urgent to support growth and protect interests in land. By then, them.i-vase ir puriL7Y UaAIam.UuzLtiuL UUfr uq-IJpvU Drls4 b %dew.4y Lv UWVLVI ULIeIy, rLvWlJia, UMInp1dutL, du

customer responsive land admlinistraon services and institutional modernization was clearly overdue.Inc-ormple'e saUU iVJUUL1 and -uncear- oI uui;uo-us pOUUcy aduuuu LU Le ui UUULLUUMM of Liad lUdaigemen

leaving a lot of room for administrative discretion, arbitrainess, and loss of confidence.

b) Consistency: The objectives and design were consistent with the Banles approach to landadminmsurauon as presented in the various land projects througnout the Bank Tne project was alsoconsistent with environmental and indigenous peoples policies, though this 1994 project did not have anexplicit and independent assessment of likely impacts or evidence of beneficiary consultation. Tne projectobjectives were also consistent with those in the 1994 CAS but these were rather general - growth withmacroeconomic stabiiity, poverty reduction, and improved public sector management

c) Commitment: Both Govermment and the Bank seem to have been committed to the project objectivesand design though there is evidence that parts of the Goverment and the main implementing agency werenot fully committed to the entire package. First. the Ministry of Agnrian Affairs (Agraria) and its BPNwere not convinced of the need for the policy studies under Part C and this led to delayed start of thiscomponent (under BAPP1ENAS). Second. commitment at the District Land Office level was often mixed.The systematic adjudication teams came from the Province and usually set up a temporary office separatefrom the local land office. These teams carried out the survey and adjudication activities leaving theregistration, certification, and storage to the Land Office. Third, forestry authorities showed nocommitment to the project despite common interest in traditional land tenure, forestlnon-forest boundaryissues, and administration of land on behalf of the nation.

d) Ease of Implementation: Implementation of accelerated land titling and registration was initiallydifficult because of the shortage of surveyors both within BPN and in the private sector. BPN also haddifficulty with the logistics of starting up and maintaining such a large program and coordinating thecentalized titling program with local LOs. HR management proved an enduring challenge. Budgetpreparation for activities at three levels of govemment (Centre, Province and Local BPN, with severalsources of funds) was complex and consistently late. By the third year, project management was able towork around most of these problems and implementation progress became satisfactory. Assistance inmanagement of implementation provided by the consultant team funded by Australia was of considerableinportance in dealing with these difficulties and in implementing the institution-building component.Integration of Part C into the rest of the project remained difficult because of cross-institutionalconsiderations.

3.2 Revised Objective:The objectives were unchanged.

3.3 Orginal Components:The components consisted of land parcel surveying, registration and certification (Part A), improvementof legal, regulatoxy and administrabve framework for land administration (Part B), and development ofland management policies (Part C). The total project cost was estimated to be US$140.1 million, of whichthe Bank was to finance US$80.0 million and Australia was to finance US$15.2 million for technicalassistance for all except the policy studies. Land Certification and Registration was the largest componentresponsible for 88% of total project cost while inprovement on Legal, Regulatory, and Administrative

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Framewuor oUL LAUIU AdIMIUULWduuUn ausorueU WlUUIT Y70 of Uu, .U)ii, and DeUve:Upmen, 01 o If U

Management Policies another 3%. The loan fmnaced survey and related service contracs, civil works,awmiinus anu equpment, anu uonsuwvints.

A 1 Insl ndprfifemtlnn anAd Retrtian nlJ:1f ns 1 millinn nfuwhinh PRI71 7 millinn Rstinin

This consisted of: (i) mapping, land parcel surveying, registration and certification, and, (ii) training andta_phnical as ita'ne to t, N,ato-nn-l Tr niA Aa-np aeau cita lnal Tt anL d (a;pc a Ac' in IR Min,ain and ruralDistricts/Towns in Sumatra and Java (out of a country total of 293 Land Offices at that time). Mapping

,,n!,e-A ;"Vn.aa.w toh A.vnt, f ma refan-o te - ;t"nt.a ..wrhain hace l-A -A,on n

producing maps showing existing certified land parcels (geographic index mapping or GIM). Mappingwo . t -i.ed ouSnt nby --l...aal.t A. .tW .t -. -.- J WU.nObW ISAn o1a

mapping individual land parcel boundaries, determining the rights to the parcels (adjudication), ande.-^-'Ul .g~ IV..D^OU.Ain'0 o U lalt. AdL1U lt.

01tt.l. rGUA U OULVt)'l"g%L and ., &U:n WSUU UId t&AU d UoU Uy jJ LIVWAt.

firms to be trained by the project and managed by BPN Central Office.

Two types of registration would be supported, namely sporadic( 8 LOs) and systematic (10 LOs).Sporadic registration identifies. adiudicates and registers riahts to land on an ad-hoc basis usually whenwalk-in customers approach the land agency and request registration of their parcel regardless of theintentions of their neiehbors in this reuarcd It is suitable under some circumstances such as where thenumber of parcels to be adjudicated in a given area is small. The local LO would carry out sporadicregistration Systematic registration identifies; adiudicateq and registers rivhts to all adiacent land parcelsin a selected locality and within a given period of time. This program method is cheaper and faster and ismore tansparent since adiudicahion is made by a amnel of renreqentatives of RPN; villare leaders and thesurvey firms. It is also accompanied by Customer Relations and Services (CRS) which disseminatesinfnrmation nn the prnogrm and consilts with intended heneficiaries Adicatiti on woiuld he carrie nut hv

the adjudication teams staffed and managed by BPN's Central Office while the registration and recordsmanaVpmPnt wnidbe hp carrie oiut hv the lncal LO. Tn nrdPr tn ofailitntp thi, TLOs woild rpecivP fcnilitipC

and equipment related to these activities. Technical assistance consisted of advisers (AusAID- financed),atini ncy tPrhnninau dpuelnnmint mnnitorunc and a sl. .p,ry,nn,mp hacplinp qrhi

B. Improvement of Legal, Regulatory, and Administrative Framework for Land Administration(US$30.9 million of which US$4.6 million Bank)This consisted of: (i) a review of existing land laws and regulations, assistance in drafting new regulationsto improve the legal framework for land administration, and to prepare a legal database to cross-referencethe many laws related to land, and, (ii) activities to improve long-term development of land administration.These were a study of BPNs fee structure, a study of ways to improve security of tenure of customary (adat) lands. training and scholarships.

C. Development of Land Management Policies (US$4.4 million of which US$3.7 million Bank)This consisted of an integrated program of studies, seminars and workshops on selected topic areas in landmanagement aiming at supporting policy formulation. These would examine: (i) institutional roles in landmanagement, (ii) land acquisition, (iii) displacement and resettlement of people, (iv) options for landassembly, (v) spatial development planning, (vi) land rights issues, (vii) boundary issues between forestland and non-forest lands, and (viii) land management policies for sustainable development. At the time ofproject preparation, these topics were, and remain, of major concern. Although only 3% of total projectcosts, this policy development component was necessary.

3.4 Revised Components:Components were left essentially unchanged. A small pilot to test procedures for identifying and mappingcommunal adat (ulayat) land was added (West Sumatra - Tiggo Jenko) after the relevant regulation was

-3 -

ir-viseu Villusierni Ieree No. a, iyyy, Auudelines for Seiuemenm o0 rLnU i VA i Issues-), and inaccordance with SAR assurance 7.3 (k) on implementing study results.

3.5 Quality at Entry:4UALLX%, ALS en; is

5'. r.MMaR7 MOUCiL"GsfoJL LU LUJ..LW OX ouJiMU SV , 1 o1VaUL-p U, dei II, UOusi glemsso nU.UL

other projects, and conformity with Bank safeguards policy. Indonesia!s rapidly growing population andevmywere pu;"ung g. sul_ o-. lan resources _4 _nflwe -_ __- inqi;i -trt of_3ecUUUIIy W~I FJuLLur. &v-QL OuaJ. oLL 1411%! 1aIU.u. WU 1VJI%JLU%.q GLIU U1VqU1LL 11 Ul UU411LMUk IAU

matters was a growing cause of social unrest The Bank had been involved with land rights concerns mUUUUcbiL UIUVUrk acvr1a p1ujw, ill IL11 4lU ULU4I ErnW UUU UM;4ly iUVIULUIVU WLV L)Y ybbUV WEUIC

structuring project design to address them directly. It was fully engaged in addressing these same issuesneaby _n __ 1 pciu lan ~"--- -- A - - --_ notabl

ncamy in ILL aiunU uuuuou uie bc land i uuing proujcts and in ouier [igiiusu, noainy Hin rm. Lnebalance between urban and rural sites was appropriate to capture the problems of rapidly urbanizing areas.Limiting the sites to Ja-va, with only two cities in Sumatra, was correct given tiat it was soon found thatmore adat/ulayat land existed than was thought at the time, and despite the reluctance of agencies to acceptthe survival of hnis tenure form. T-ne design was noi unduly compiex or risKy. Parts A, B and C were allnecessary.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:Project outcome is rated satisfactory. The net impact of the project was to begin the process of reform andmodemization of Indonesia's administration of its non-forest lands across the full range of considerations -institutional, legal, administrative, social, and technical. Over 2 million predominately poor people for thefirst time received clear title to their land at little or no cost and generally without long delays andirregularities. This gave them both a measure of protection of their rights and an asset that could be usedin wealth-creation, if they so wished. The impact surveys revealed a high degree of beneficiary satisfactionand strong demand fiom communities not yet in the progran.

Transactions in land in participating LOs were simpified with attention being paid to quality managementLarge numbers of land parcels were registered at a fraction of the per parcel cost to BPN of sporadicregistration and the reliability of the register immroved markedly. BPN staff were trained locallv or weresent abroad for formal education (Masters degrees in land management topics). These graduates returnedto BPN where their external education is being put to good use. Staff were involved with extermal advisersin reviewing and in implementing the recommendations on surveying and registration, customer relationsand services; human resources and institutional development recordsn mana-gement infnmation technolnorvland laws, financial management, derivative registration, decentralized land admiistraton, and traditionalsyvtems This has had a discernahle imnact ninitiional rerfnrmnanrP.-ses -- r-'--- r'-----

A -rnmrphpnivt sqrneC of pnlir,v ctihilip, uwn prnrri nlut vie.purin, aand issmvpes legis!_at;nn nlanncna aA

management, land rights, traditional land tenure, international comparison of land management, forest landadministration, among other topirs. These were the subject of rtio,l and interatioal wo.4hops ledngto an ongoing land policy dialogue among stakeholders, including Government - unthinkable five years ago.

The project was designed as the first time-slice of a 25 year land administration program in which

follow-on project is under preparation. While the project was generally successful in achieving itsobjecu-ves, *Lere were a nU oope- UU!piauUI, po%Ulc;, insdLUUUna41 laIU legisilU-v issUeVs WkIaL reduIe(j oiiiy

partially resolved by project closing. Chief among these were:

- 4-

(i) tie accuracy of the pre-project cadastai data was iess than expected making records integrationmore difficult and costly;

(ii) the accuracy of project-supported cadastral data was often less than expected particuiarly withinewly trained private surveyors;

(iii) coordination of terrestnra survey and photo-mapping was more difficult than expected because ofscheduling conflicts between the centralized program and local govemment;

(iv) progress on tenure reform was less than expected because of difficulties in reaching a socialconsensus on land. Land conflicts continued with wide administraive and judicial ciscretionmaking the system seem arbitrary;

(v) the level of registration of transactions in land subsequent to the initial registration is generallysatisfactory in urban areas but not satisfactory in rural areas, affecting the reliability of the newregister over tine;

(vi) program management responsibilities and budget were split between BPN Pusat in Jakarta, theProvincial BPN and the local land office malcing planning and budgeting overly complex andtime-consuming (budgets always late) and contributing to fragmented monitoring, and supervision;

(vii) land office competence was more variable than expected resulting in uneven ability to performadequately with standard project support;

(viii) provision of resources and technical assistance to BPN's training institutes, by itself, provedinsufficient to lift staff sldlls adequately;

(ix) document storage and management problems increased significantly with progress of registration;(x) Customer Relations and Services (CRS) was never fully incorporated into the registration

program;(xi) while studies in land policy and laws were comprehensive, the political context was not conducive

to reform in the short-run;(xii) development of a strategy for the long-term institutional development of BPN became of limited

value upon promulgation of the Regional Autonomy Laws of 1999, giving the role of landadministration to the regions, and upon the Decree No. of 2001 providing for a delay of two yearsin the case of land and the consequent uncertainty over BPNs future; and

(xiii) the cross-Ministry coordinating committee did not function and Part A& B, and Part C, wereimplemented essentially as separate projects with no institutional mechanism to ensure that thefindings of each were incorporated into the project.

Social Impact Evaluation A Beneficiary Survey of 1,596 respondents was carried out by anindependent NGO in 14 districts and cities (Annex 8). The results were favorable to the proaram and theparticipants were pleased with systematic adjudication. This confirmed the results of the mid-termbeneficiary swvey. The evaluation report concluded, based on the survey results. that:

* yvstematic adiudication had a bias towards locatinn5 where hnuseholds were not economicallywell-off;

* 9004g of beneficiaries thnougt ci-ali7ationn was adleqate though only half thecs

received information through CRS;* 97°,'o4 of w I..efici.e v-4i -+M;= fht m1hM 16A no prLvb.w.ALs meehg d._-J+W - =JAVU;

I 7. AU .JS "u"vzfLeStlva &~Jr ta.q flO LLJjUUV4O*L".t1 uLl 1W.dtjUULkLtO

* 8% percent of respondents reported errors on the titles but considered the errors "relativelyHibigiunwkL - IUL eW1J4Jle, JJrIUI 5PUu1e L U1 eseZV..1 U5V oIfULn Were pPrawpuiuib Ul erio[,

not substantiated, and the error level is considered reasonable;* certification cost to beneficiaries was cheap. Tne average cost to beneficiaries was Rp 36,449

(about US$4), about 100/o of the cost of a sporadic certificate for the smallest parcel(Rp 350,000) and 3% of the cost of a sporadic certificate of average size (Annex 8). This enabled

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even poor anud o-wnes to b cetified.* poor people and widows often received certificates at no charge to them with the community

paying processing fees (mainly for supporting documenution such as repiacement ofidentity cards) instead, again giving access to tiding benefits to even the very poor,

* there was wide variation in costs which should have been more transparent;* 70% of participants believed that land certificates increased their tenure security;* PBB (land) taxes rose with certification as did use as collateral to access credit;* the study found no gender discrimination - the project treated women and men the same in that

landowners of both groups were invited to meetings and had their certificates processed similarly;* perceived land values rose with certification, urban land sales increased, demand for private

notary services increased, but demand for dearer village and sub-district notary services fell;* most considered that they would have been willing to pay more for systematic certification and* control groups not in the program responded that they would be willing to pay full cost for

swadava adiudication (cost-sharing) if svsternatic was not availahle=

qtakehnlIdr WarkshanA stk-chnlder wnrIc-hnn ura held nn Mav 14 ?nn? tn di,iu. c the Rnrial Tmnrart

Evaluation Report and the project's ICR. The participants included senior government officials fromMnoTA EKTIN, BAAPPNAS, BPN, eig.ht NC'Os includfing an adat rpresentattivue .nm Acehlrepresentatives from academia, and representatives of six local govenments. The participants welcomedthe opportumity tn disruss the impact of the LAP and concnlhed that it w a salear scrcess. Partiipantsbelieved that the Beneficiary Survey was conducted in an independent and objective manner and acceptedth6 at,uAXc'a AnAtnce Thprm ; a ctmrninr APmnal fnr tntinilnen A.- nnran,m uA+t1 a,wnu

particularly greater transparency, better community involvement, more attention on areas with landcon anf lic.A#ri

4aAantot+on to Aono ,ab nn To n-, n nn m 0 fl* &.f he 's-.d

certification and also to reduce the government's fiscal burden, participants suggested more swadayav...h +.nn";w in rea1,h,,,o11n e..af aas.uPeron+.,.,,urv f ,r t' en., ,lsor a aa..4., K\Tt'Is

and academia pointed out that an integrated land policy is needed and expressed a clear demand for landI9VUt, *efo ... , spec.caj ay n iLn w oft.lr !dIC *Oflt. ts, !ddis .0, dU "%N%t.oWUUU, ilt. itonUU

permits (see Annex 9 for detail).

4.2 Outputs by components:Ar,-olp.ratinn nf mand titling and rpai.vtratinn conmnnnont (Part A) 11UP rnvtv inm!1,ie T.I F5

million of contingencies).

1. Control Points Densification, Base Mapping, and Graphical Index Compilation (US$18.9 millionUJAt,l UJWA1 3* -. i.;oAC)

This component is rated satisfactory. The outputs were achieved, as appraised. Some 10,500 controlpointsJ k-ctl poiind.4r o v fr.;gs eee+!se,nI pltW,aphy WAS5

carried out on over 710,000 ha. and base maps were produced for 231,000 ha. Some 650,000 parcelsau; u-e ".;v o. -pje-, w er-e idtifiedA -an e.d- in4.o [e- us --- ---- x 4UVa7 Uy Ltq;.$ jJLJLJL' M UZI JA.P j.lJ4tL W1% IU.LIUI1A%A GLiLt.ultI UJI'S UIUV Lutao IlIFljJ kJLGjJU1t.4l iJLLGiA 1Ywpigj

- GIM). Maps covering another 390,000 parcels were also updated. This provided the survey contextuevuu fio LUC uuju1 PJLugAAwu _u unpiuvvu 'rr- 5 LBuvauuuL kai iy. rPuuiu wvrc euuuuIe[eu WIw

low utilization of photomaps and with the mixed quality of pre-project cadastral surveying. The GIMprogram proveu more dficlIt and costy than eXpet because oi ute poor qualty oI sporadic survey andcertification carried out prior to the project This required resurvey of a larger percentage of previouslytitled parceis to ensure a consistent accuracy in cadastral maps that incluaea both program andnon-program registered parcels.

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2. Systematic Land Titling and Registration (US$72.1 million SAR, US$23.2 million Actual)I ue aysLuauL uLU" gSpIO LU Is,-U badLLb1dU1y. l, UUrr.L 01 Z 1. iLUIUU UUrb W= UeAUVUVU wy J.1U0L

0.8 million titles and at a lower cost per parcel and in total. By surveying and registering large numbers ofwijultug ptmi;t;vi, ui ; um e, IlUt;U Lmay iUU Lut uIIl.WUrluzS aUbbaaiU WIUI rcgLbtenng mUiVIuutU parlIsone at a time on an ad-hoc (sporadic registration) basis were avoided. Demand to participate in theprogram was Migh amnong land omIces and beneficiaries and tne number of municipalities and disrictsincreased from 10 to 33, while the number in the sporadic program was reduced from 8 to 2. The projectintroducea full disclosure, of information on costs of itues, rignts and obligations, adjudication prmcesscarried out in public, interim results were published prominently in the village and time allowed to disputethe outcome, and certificates were, in fact actually delivered as promised. Tne program also promoted amajor expansion in private sector surveying. Under the project, an Act(2/98) and Regulations (PMNA8/98) were drafted and passed to provide for examining, licensing and quality control of private surveyors.The success of the certification program though, put considerable stress on BPNs management andexposed deficiencies in the Basic Agrarian Law and the implementing regulations, only partly resolved byproject closing.

3. Sporadic Land Titling and Registration (US$8.0 million SAR, US$6.2 million Actual)

registration service (sporadic) and increase cadastre accuracy. The component is rated satisfactory since

to the systematic program because of the demnand for a larger registration program made possible byUJprJLCMUL1' 01 ld1i o.cesva. SpoIradicu Lvs1auoruUIi La IVacc W.LUrate arui pVos Irauy piuUtraiL in geLVga-Ung

parcels surveyed at different times. Applicants bear the full cost of the survey and recording (which couldbe aS mUca aS Rp. 790,000V/pa-ce, iA1aVUd WIvU AP D U,000J iL Ulu b-yteuudic pWlugiu-. ).UBenLefa dies 01

sporadic registration tend to be wealthier and better informed. Opportunities for informal payments,irUniutu Uinty:b 111 p1ivrW_Ui, rA_1U1r 01 dIU1U1= I lbMUVV UIMrMUUUI, _UU UIUUWVUI;L_ ULUvUILIuon11

greater. Nevertheless, there is need for this service. In retrospect, this component should have encouragedself-help (swadaya) survey and registauon whereuy adujacent parcel holders apply for registuaon as agroup, assist with field activities, and pay registration costs. This avoids many of the drawbacks ofsporimcc regisraton and lesens the dependence on uudget hat limits the systematic progrdm

4. Institutional Support for Land Titlingy and Registration (USS24.3 million SAR. USS16.9 millionActual)Training was given at local institutions. assisted by consultants and the TA team provided by Australia, intechnology, service provision, customer relations, systematic adjudication, records management, programm_nitoring, and other asnectts of land administnition Tn additionn the orant spnonsored 40 BPN staff tocomplete masters degrees in land administration in Australia. Quantitative targets were generally met. Mostof the trning was viven by PUS L ATKT,A- BPN's own Centre for EAirantion and Trining. Howeverp tegeneral quality of training proved to be questionable and low staff skill level remains a major problem.Thk cith.enmnnnrt ic rntPd rnaroinsallu catifae-tInr. anti rlearlu uarrnte a AlfFeprnt arknrnarh fLr the

future within the broader context of human resources management.

The TA team provided to help BPN in project management was experienced and well qualified. Workingrelationships with counterparts were very good. In addition to direct implementation assistance, the teamproduced a large number of working papers and reports on the full range of aspects of land administration.These were discussed with and made available to BPN managers. This sub-component is rated highlysatisfactory.

_.7

5. Improvement of Legal Framework (US$2.2 million SAR, US$4.2 million Actual)This comnonent set uD a comDuterized database of the some 2,000 laws and regulations on land tofacilitate a reform of the legal fmmework which had become overly complex and confusing. The databasewas inftequently used and was not maintained and is rated unsatisfactorv.

A Systematic Review of Land Laws and Regulations was carried out and PP 10/1961 was redrafted tointroduce more practical procedures for land registration. This, together with the policy studies in Part Chas made a major contribution to the basis for comprehensive land law reform and is rated highlysatisfactory. The Review concludes that the Basic Agranian Law of 1960, although an excellent statementof principles, has not been supported by a set of unambiguous implementing laws and regulationsconsistent with Indonesia's social reality and capable of supporting a rapidly developing economy and noprovision is made for protecting customary land rights. Land disputes are increasing and reportedly some400/o of cases in civil courts now concern land. This is because of considerable uncertainty about the rightsbeing registered and the administrative discretion it allows. There is now support in Govemment and civilsociety for redrafing the land laws. The People's Assembly (MPR Provision IX of 2001) directed GOI toreview and reform land legislation.

6. Long-term Development ofLand Administration (US$10.3 million SAR, US$13.0 million Actual)This component assisted BPN to develop long-term policies, procedures, and a corporate strategy. Studieswere carried out on costs and pricing (fees) of land services and on ways to improve security forundocumented customary rights over land belonging to indigenous people. Technical assistance and civilworks were financed for the National Land Institute Yogyakarta, the geodetic faculties of the University ofGadjah Mada and the Institute of Technology Bandung, and BPN's Centre for Training and Education.Thecomponent is rated satisfactory.

7. Development of Land Management Policies (US$4.4 million SARk US$3.9 million Actual)Consultant studies wommenceu, after a iwo-yar delay, anu pruouced repours on: land admnstrauonpolicies and institutions, land acquisition, land use planning and development controls, land laws andtenure, land rights, customary land tenure and law, forest land issues, commerciai wansactions in land,environmental impacts of land development, displacement of people and resettlement, reform of land policyand institutions. Generaly these are of a high quality and provide a wealth of mateial and a framework forland policy discussions and institutional reforms. They have been made accessible to all by being posted ona website. Overall, the component was successfui but the success was limited by the failure of Govemmentto be substantially engaged. There was little interaction between the component and the rest of the project,The main himitation on the use of this, material remains the turbulent state of social and political affairs inIndonesia, making it difficult to forge the broad social consensus need to support changes of the magnituderequired. The Bank is co-sponsoring with WI a series of workishops outside the project as a long-runpolicy dialogue on land with stakeholders in the hope that it will facilitate a move towards the neededconsensus. The project studies provide the discussion framework and, in this context, the component israted successful.

4.3 Net Present Value/Economic rate of return:TYhe economic rate of return was calculated using the household- and plot-level data collected by theBeneficiary Survey. The overall economic rate of retn for the project is 33%. The assumptions andmethodologies are given in Annex 3. No ERR was calculated at appraisal.

4.4 Financial rate of return:The financial rate of return (FRR) is 15.3% and the NPV is 43.5 million. The revenues were extrapolatedover a 35 year period and no further assumptions were made regarding any expected changes orenhancements to these current actual benefits. The FRR is financially sensitive to the changes of the base

assumption of re-registration following sale (see Annex 3 for methodologies and assumptions).

4.lnJUgUUUsinua de-VelUJIopL me *-pact.

Considerable progress was made in building technical capability within BPN and the private surveynduuusuy. ± u1 uuuuuum V-... -rae weVr weu iUll'UIVU, W5yzeU, IipaLWZU WIUI LML prcwuev, dLU

training given. The impact on BPN was discernable and monitorable. At the start of the project, the conceptr t ~~~!1....t.. --- _ _AI- -- - - _. -- - --- -- ~ - nn_T ort

L ueimg an opeln, musive and locauly adcc uriU e serviXc orgaiuzauun was uniKnown eiuer tB or'4oits customers. By the end of the project; these concepts were very much understood although their impacton DrlBPs operations was mxed. ny thal ume, oficial papers proauccu oy BrN manageemt mcluded acomprehensive list of reforms needed to make those concepts operational (for example, see BPN'spresentation for Agrarian Services Month, Oct 24, 2000). 1Tne change in BP'N s view of itself and its rolewas influenced by both internal and external factors. The studies, technical assistance consultants, and theoverseas scholarship program provided a lot of exposure to practice in other countries, paricuiariy toyounger staff gradually occupying senior positions. The political liberalization provided the context forinstitutional reform. Tne main constraint on further strengthening of BPN remains the uncertainty of itsmandate under the Regional Autonomy Law. In addition, BPN and other institutions involved in land(including the judiciary and local government) still have a legacy of mistrust wihich has to be dealt withthrough credible dispute resolution mechanisms and public consultation to form a consensus on landfoliowed by further reform of land laws and policies. Fortunately, in January, 2002, the MPR (PeoplesAssembly) passed a resolution (No.IX, 2002) directing the GOI to begin such a consultation and revision.Consolidation of institutional gains is contingent; to a large extent, on the Govenmment's willingness toperervere with the institutional reform program and to move quickly to the next phase of the programmade all the more urgent by decentralization giving a greater role to local governement While this presentsimportant opportunities in land administration and many local govenments are quite strong, others are ingreat need of institutional strengthening as soon as possible.

5. Major Factors Afiecting implementation and Outcome

5.1 Factors outside the control of government or implementing agencv:Indonesia's land laws, traditions, practices and institutions (to a large extent) evolved to manage land in atraditional villa2e settina where transactions were few and took place among Deople who generallv kneweach other. This context changed rapidly as Indonesia underwent a sustained period of strong economic

rowth and urbanization. The mix of tenure traditions, laws written and unwritten, and local practicessoon became too complex and too cumbersome to support timely dealings in land. Comprehensive reform -started bv the 1961 Basic Land Law - was neglected in favor of administrative decisions over land. Whilethis produced quick results, it was seen as often arbitrary and subject to abuse. The design of the projectacsumed snme commnitment to reform. but the conditions needed to nroduce a gmundswell of nolitical andpublic support for change were simply absent. Failing this, the emphasis of project implementation was onrntarhing up with the ennomous hbackng of imreristered nan-els; somewhat similar to that umdertaken in

ThaiLand a few years earlier, but under very different circumstances. With the change in govermment andthe lihprali7Ation nf niuhlir .nnininn it then hepr-m. appnre_t that disgatiqfhrtinn with rovpmrnmpnt'. hrnvilirncr

of land management was much greater than simply inefficient parcel registation. The monetary crisis of1997 had A" en or-m s impsrt on the prnject's -finl yeas m Ibil et rp i ried up and the "inh

devalued. The regional autonomy decree and the several reorganizations of govemment agencies have leftBlDN ant d h land offiroc in on ,mnoto

4n position .,,nth rnespec'. to ner ..anndkl4oe anti <sncinn

n . -A~ %ftL~If fl**W1- W tIfla. a"jJfll--lflVT*5. ttjJS W +4IIU-- *Ojttl.lW~OIM.-A fflllV

5.2 fn.tn,s apnor,nllv 'vquhipPrt tn governnmwnt ry)trnfll

Govermment support to follow-up of the reform components was mixed at best and inter-agency review wasnt-clicrilp if at all. Thig w.s prfti larlv nnti.-p.hIp in the nultrr,mi of Part Cr npoicy and institithnnal

studies, which although providing a comprehensive basis for reform were not given the follow-up attention

g0

they wamranted.

5.3 Factors generally subject to implementing agency control:The main project shortcoming that could have been better managed by BPN was the Customer Relationsand Services (CRS) component BPN missed an opportunity for consmictive engagement of communities.BPN did not manage to retain qualified financial staff and this became a persistent project managementproblem.

5.4 Costs andfinancing:The massive devaluation of the Rupiah, from Rp 2,105/US$l at appraisal in 1993, to Rp 10,000/US$1 atioan ciosmg m i Ui2 , was nUo fuy passeu aloiig ii Miicreau rup-nh costs, parutcularly for lawor vosts. Asa result, the actual project cost was US$80.7 million equivalent compared with US$140.1 million expected.Even without te devaluation, tne costs had bee-n overestimateud Of the total, the Bank financed USwo.1million, AusAID US$20 million, and the GOI the balance. Of the Bank Loan amount of US$80 million,uS$33.9 million was canceled. Foreign excnange costs denominated in dollars were as expected whilesurvey and other costs denominated in Rupiah rose. However, it is surprising to note that despite the largedevaluation, the unit costs to BPN for survey and registration remained fairly consistent at about Rp120,000 - 140,000/parcel throughout the period 1996-2000 (the US$ cost dropped from US$58 toUS$1 1/parcel during this time due to devaluation). Late arrival of budget was a consistent problem. Thiswas made worse by frequent changes in budget rules.

6. Sustainability

6.1 Rationalefor sustainability rating:The proiect is rated sustainable provided that the follow-on proiect eventuates, as prorammed. Theproject was not designed as a stand-alone intervention. The project supported only some of the activities ofless than 100/o of the land offices for iust a few vears. A larger, more sustained effort coupled withmeaningful policy and institutional reform is required to bring about permanent and comprehensivechanae.

6.2 Transition arrangement to regular operations:With the closing of the project, the systematic registration program has ceased and the activities itsupported have been absorbed into normal operations of the local land offices. Of the 122 systematicregistration adjudication teams reached in the peak year of 1999, only 2 are still in operation. Thespecialized staff on the teams have been reassigned to their origial land offices. These staff take withthem special skills and insights learned with the project and to a large extent this will benefit their offices.The follow-on proiect is expected to focus on all the operations of these decentralized land offices. theexpected technical assistance and standards functions of BPN, and on fostering consultation-based policyand leeal reform.

7. Bank and Borrower Performance

Bank7.1 Lindinrg:

Bank performance during preparation is rated satisfactory. The project was prepared based on the team'spruiiwu i r ApV1UWJU i IWIU dWMUJILILUUUILA CUU bUL VVy 4LU WIUI LU1, bUUIMWVbL bCL1 UJL Mnu

admiistation projects in Thailand. The team had the valuable assistance of the AusAID team whichbought iogetner a weltui of practcal experience in land registrauon and survey acruss many couniries. Itwas also helped by the experiences with land administration and mapping as components in previousprojects in indonesia. Tne apprausal team was appropriately staffed and suppiemented by experts fromAusAID.

4-1- u-

7.2 Supervision:The Bankis supervision performance is rated satisfactory. The supervision team was greatly strengthenedby subject-matter specialists from AusAID. The teams were multi-disciplinary, cross-sectoral (urban,rural) and carried out comprehensive reviews on a continuous basis with substantial field work.Preparation for supervision missions was superb with the technical assistance team preparing substantialdocuments on progress, issues and options. A total of 12 formal supervision missions were carried outwith frequent ad hoc assistance being given by the staff of the Bank's Jakarta Office.

7.3 Overall Bankperformance:Bank performance overall is rated satisfactory. At the time the project was prepared, the politicalconditions for comprehensive reform of land management were quite restrictive and the project focus wason the non-controversiai activities connected with survey and registration while comissioning detailedstudies into policy, institutional, and legislative issues in land. This approach built up a relationshipbetween Bank, GOI and AusAID in which more sensitive issues could be discussed. Aii parties benefittedfrom the relationship and towards the end of the project, with the benefit of the completed Part C studies,these issues became the topics of a series of stakieholder "Policy Dialogues" sponsored by WI/Bank.

Borrower7.4 Preparation:BUILUWVi jVLJLIUGBV pUJUie g JuiFa&UUu LS JLW.U iUUb1wI4ULY. I UV 'JWJL uJfLV1UeU IW;uULUjJVIZJ aWIU

experienced staff in all aspects of land management

7.5 Government implementation performance:The rnO in gpneral gave fill sunppot to the projept though initial suppr tn the policy and le isat 4

arn

studies was reluctant Within the limits of the difficulties imposed by the various crises, budget wasaV a. lels s.. V V.s* - ! , a. = ..s d WV w e

given at all levels, Central, Prvincial, and Local.

7.6 Implementing Agency:The perfonnance of BPN is rated satisfactory in terms of irnrlementing the regitration nrnmram thnuahprogran mnanagemt was sometimes restricted by the absence of financial and specialized managerialskil6= RPN was unable to resnond flIvy to the inStitution-huilding initiatives. This is nrobably du e to thegeneral incentive terms and conditions of govermment service rather than anything specific to BPN.Similarlyv RPN oenerallv s:hnwed little interest in CR S And in hbecnminga n oenn incliiv.e and efficient

service delivery organization. This is largely a reflection of the public sector agencies as a whole at thattime rnther than mrific to BPN.

7.7 Overall Borrower performance:Overall client performance was satisfactory.

8. Lessons Learned

Project Design and Policy implicadions* Land administration, particularly in societies with large indigenous populations, is complex. The

project design appreciated this complexity to some extent and included a mix of technical, institutionaiand policy components. Whether these were in the "right" proportions depended on the context in whichthe project was prepared and implemnented. At the time of project preparation in the early 1990s, theemphasis was on the efficiency of the land titling process with difficult reform issues relegated tostudies. The primary land administration development objective was to close the cadastre within 25

- 1 1 -

years. This followed the Thai expenence and in the context of that time was probably the best wayforward. By project closure in December 2001, it had become clear that the refonn issues wereparamount and that the anticipated further Bank assistance would have to focus on that above all else.The social circumstances in Indonesia proved to be very different from those in Thailand with a morecomplicated mix of land tenure traditions. Land legisLation is much less developed in Indonesia and therights being registered are not clearly defined and understood nor are protected by the landadministration agencies or the judiciary. The registration process itself does not guarantee ownership.The rights being registered should be clarified and backed up by a supportive land administrationagency and judiciary;

* The project studies were intended to help resolve these problems. The key lesson is that studies bythemselves do not guarantee progress on policy and institutional reforms and more direct linkage to theproject activities is required up front;

* Modenization of land administrfion is fundamental to a rapidly evolving modem economy. Thisrequires more than updating data management systems. It also requires that land rights be defined andallocated, that they be accessible, transferable and defensible. It also requires that change should beacceptable to stakeholders. The SAR does not define any process for reaching a broad consensus onissues in land. The reform process is defined as one of studying a problem, presenting the results togovermnent, and waiting for the changes in due course. Project preparation should have identifiedconstituencies for reform and designed an appropriate forum for involving them. Towards the laterstage of the project, this shortcoming became very apparent and a "Policy Dialogue" forum wasestablished to include stakeholders in discussions of the LAP-C reform recommendations;

* Land legislation should be complete so that rights, obligations, redress, and processes, are transparent.In the case of Indonesia, land legislation has been left incomplete for four decades since promulgationof the Basic Agrarian Law in 1961. This has led to a general decline in confidence in the agenciesinvolved in land and is a positive disincentive to registering dealings in land,

* Grievance resolution procedures must be established to settle land disputes according to the rule of law.The large backlog of unsettled land disputes, the settlement of so many in favor of elites, and theobscurity of the process, brings into question the value of the rights being registered,

* Land administration is a local government function by its nature since land records register how land isheld and these records are used locally. This is especially the case where there is a large variability inlocal land tenure traditions. Centralized programs run the risk of setting up a formal system (BPN) innarallel with traditional systems (adat) and with local non-traditional (1urahkecamatan) systems, as inthe case of Indonesia;

* Centralized land admnmistration promgas become difficult to manage if they relege some functions tothe central teams (adjudication) and some to the local office (records management). Local support maynot match central surnnort resulting in a rnmgrm imbalance. In some cases- local offices freiuentlvrejected data produced by the provincially contracted teams because of problems with quality overwuhih they hadno oantml- In other ca e,ocal land offices did not have the resources to comnlete theregistration process, or to manage the large volume of records generated. Registration should be an,ntmrotpA Inorl nffin- nri%mt1nn with rpntnml nffir,p nmrviilrincr evnnnrt-

* Formation of inter-ministerial "coordination committees" to resolve complex cross-sectoral issues isly to be -e-i - tie _sertce oW -d-

* Where an institution requires comprehensive upgrading of staff capability and staff managementS-YvW-,LM, it is 1UMt*ikely ht 'S1ue samSe i-tsMJ 0j t 8 depng A- =l- 4by-if = flU 'J be able

provide the necessary services. In this case, PUSDIKLAT (BPN's Centre for Education and Training)awdU S TrD 111 V .aL:unCl LandU IUwULM, coL 'dUUAU nLLotaA.V L.- .I.h U"Fac,L via o j a 1s4UXUV Uy 7LoW s141f

skill levels and ineffective management systemn and structures; and* ivionituoniig 1uuw.lb LU C ha-ve LUo Ub ucUbsu c-wiulUy. Iu * d ca, Ulu RrfIs me-iucu piuvgvs oi iii-p

and outputs but not of impact Regular supervision reporting correctly recorded the steady progress in

rvacmng anu surpassing momitorec goais (numnber or cerincawes, ha. o0 arai photography, uainingcourses given, studies completed, etc.). The two Social Impact Surveys, though, did give a clearmeasurement of impact.

9. Partner Comments

(a) Borrower/implementing agency:The GOI prepared a separate ICR (Annex 10), and also commented on the Bank ICR. In geneml, theconclusions were the same. Comments given to the Bank on the draft were incorporated into the finalversion. Probably the most important comment on Part A&B came from BPN who considered that theBank did not fully appreciate the difficulty of hurmfan resources management involved in projectimplementation and that overcoming these constraints was one of the major achievements of the projectOn Part C, BAPPENAS' main comment was that the consultant studies were carried out without the closeinvolvement of BAPPENAS and that the output remained as discussion papers rather than detailed policyrecommendations.

/h-) Cn..nnwinr ir

AusAID prepared a separate ICR (Annex 11) with a summary as follows: Commencing in 1994, LAP hashiwn imntmpnfted diiinc e,4stne thi mn_t v,nistile enr ,l and Pr,nnn,nir rwnnA in thi ahrwt hiMatrwv nf the

Republic of Indonesia. Notwithstanding this, the project has successfully achieved the titling andr-aatroinn ttearptS in 5 nrnmvinreS nf TJua uwhpr as a rnciIt the snnnninmir and 50eial nnt nth Iof mnne than

1.8 million households has been improved. A gradual, but discernable shift in BPN from a closed,auitntwatirn cplf-qprvina -,pntral aapneI, tn ao mnrP nnPn i"nhia.uP anA apr%Anv APl;uaru nr-n-;i,ati,n lhaQ

assisted the govemance objectives of the programL Also, the TA has assisted the establishment of acoAdatral survey idu Stru in the nvwuatl. S.tnr of fdnesia +4. s,.o.m t ad Ami atLin in a e r.-. n. Thetechnical operations of the registration program could be regarded as sustainable with evidence of.inA nAa "laannd"a imnlA n byttr B. , w, -. A UI.o has msde in : c-- y-.Ia.. . a.s~.nmt4f,.- jJlJ - J- J -l lSIJ fl flO.lSJL J A.C SU

this aspect of the program will require considerably more assistance before changes can be regarded aso sas! an,fler 4.- . - f- T AD ncludA 'e.- -- 94s..... +*,. ed on --A

program and the development of the private sector to undertake all aspects of surveying and mapping. Theb " the +16- DlDxes"-;o -an QC-4- ff"nDlO ----- .- e - Is "*e C. -1---. ~i4AJI..b - aiu,J L4....L ~Vl%1 k,%.UijJ IJUJA J11W%UL jJLLLUUP UL %1V 'kVGLL

lesson and reference to this issue permeates most elements of the Project Completion Report.

(c) Otherpartners (NGOs/private sector):

The views of NGOs and beneficiaries are given in the discussion (Section 4) of the Stakeholder WorkshopResults and Beneficiary Survey Results and in Annexes 8 and 9. In general, NGOs support the project butconsider that not enough was done to influence policy and some question whether loan funds should be usedfor the project purposes.

10. Additional information

%.Tnt arnwnir.ahli

Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome I Impact indicators:

F indicatorMatrbx Projectd In last PSR- A7tualllatnst Estimate

Numberof cadtfiates dtbued 1.90 mifUon same

(systematic)

iNumber of neWupgraded ofmces, recods 113 |same

Number of studies, plcy notes, etc. on land I samemanagement pdides discussed wlthiln GOI.|Number ofRegukions sponsDrd 12 |samer

Output Indicators:I in . -.' ; . . s, .F | l - _- m_ -n I_c_ _

Aerlal Wgr p aphy for systemalc 710,890 ha sameirestraonon

Mapping fcr systematic registration |231 000 ha. same|Survey Control Points 110,402 unks sameCadastral Survey 2.231,791 pacels sameGraphic Index Mapphig 648,866 pamels sameMap Updating 389,413 parcels isameUnit Costof CerWtiDaon Rp 150,000 (US$15) same

End of project

- 4 -

Annex 2. Project Costs and Financing

ect Cost by Component (in US$ million ejuivaient). . ~~~~~~~~~~~~~Appraisal -ActuaUILatest] -FPrcentage of

.. , stimate itisumrae AppraisaiProject Cost By Component US$ million! US$ million

A. Acceleration of Land Tiding and RegistrationMapping, Control Points, GIM 16.40 13.30 14Systematic Land Titling and Registration 58.50 23.20 50Sporadic Land Titling and Registration 6.60 6.20 6Institutional Support for Titling 21.50 | 16.90 18

I TnBqtitutinnal Framework for Land Adminiistration II

| Legal Review/Database 1.90 4.20 2I T- ,rT- eo B90 1A n0 1 8 1

C. Studies for Land Management Policies 3.90 3.90 3

Total Baseline Cost 118.20 80.70Physlcal Continaencles 4.90 0.00Price Contngencies 17.10 0.00

ToMIb Pr-J3ea Costs 140.20 I 80.70 I

Total Financing Required 140.20 80.70 _ _ _

Proe (E-nett hv Prmocuremant Arrannamanntn Annraaial Fntimatl (USS millinn AnLJivalAnti

I . i - ~~~~~~Procurement Method Exoenditure Cateaory 1 Pc m Method' B. F. I Total Cost 1

(1. W orks _ 0.00 hCB other _________ _____Ot e11. Works 15.60 1 0.00 I 0.00 1 15.60 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5.0 1 .0 1 .0 1 56

___________________________ I (0.00) J (14.00) (0.00) J (0.00) j (14.00)12. Goods I 290 210 1.10 9.70 15.80_________________________ (2.20) J (1.40) (0.90) j (0.00) (4.50)3. er-- nn I s 0.00 A 34.50 8.00 AA.IA0 5 6.50

(0.00) (31.00) (7.20) (0.00) (38.20)'4. MisGIie;anous U.UU 0.00 0.U0 8.40 0.40

(0.00) (0.00) (0.00) (0.00) 1 (0.00)

5. Miscellaneous I 0.00 I 1.00 I 27.90 I 1.30 I 30.20(0.00) 1 (0.80) (20.90) J (0.00) (21.70)

6. Miscellaneous 0.00 0.00 2.70 10.90 13.60I ______________________ (0.00) I (0.00) (1.60) (0.00) (1.60)

Total 2.90 T 53.20 39.70 1 44.30 140.10[ _____________________I 2.20) (47-20) ! (30.60) ! (0.00) (80.00)

Project Costs by Procurement Arrangements (ActuaULatest Estimate) (US$ million equivalent)

. . . - --, - - -- Procurement Mehod. - -- -- ExpenditureCategory PcICB Nrn M d - . Total Coot

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ O th e r2_ _ _ _ _ _ _ _ _ _

I. WorksIs 0.00 10.80 0.00 0.00 10.80

I I (0.00) 1 (10.10) J (0.00) 1 (0.00) j (10.10)12. Goods 0.00 ° 4.90 | 0.00 T 5.20 | 10.10 II_ (0.00) J (4.90) j (0.00) (0.00) J (4.90)13. Services I 0.00 I 29.60 I 0.00 I 0.00 I 29.60

(0.00) (15.30) (0.00) (0.00) (15.30)14. MImsallnaneoua I 0.00 0.00 1 0.00 4.80 1 4.80

I.B _v; V.VV V.VV I o.V i V.VV I O.Qu

] .. | ~~~~~~( -) | (0.0) | (1480) | (0.00) | ( 14.80)l1°. Miscejianeous U.UU u .U 0 .UU U.UU l 7.U0I _________________I (0.00) (0.00) (1.00) (0.00) 4 (1.00)

Total 0.00 45.30 25.40 10.00 80.701 (0.00) (30.30) (15.80) (0.00) (46.10)

uFigures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies.

I lncludes civil works and goods to be procured through national shopping, consulting services, services of contracted staffof the project management office, training, technical assistance services, and incremental operating costs related to (i)managing the project, and (ii) re-lending project funds to local govemment units.

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Annex 3. Economic Costs and Benefits

A. Economic Rate of Return (ERR)

Qualitative benefisThe beneficiary survey conducted by the SMERU Research Institute clearly showed that the LAP has thefollowing economic and social benefits:1. First; tenure security has been increased. 700/o of respondents believed that they now have greater

tenure secunity than before because of obtaining land titles;2. Second, land certificates improved landholders' access to credit from financial institutions. According

to the study, in the project area the rate of using land certificate as coUateral to obtain credit was 12.8percentage point hiaher than that in the non-proiect area;

3. Third, there was evidence showing that land certificates strengthen investment incentives oflandholders. In the control aroup, 17.90/o of households reported that they had made land improvementrelated investments; in the project areas, the number was 23.3%; and

4. FourdL in the proiect area. land markets became more active and land prices were higher than those inthe non-project area. About 2% of households reported that they had sold their land since the LAP'sininlementation in the control group; however, the number was 4% in the proiect area Preliminaryanalysis also shows that the land price in the project area is about 65 percentage point higher than thatim the control area. There are some other benefits which are difficult to be quantify, such as reducingland conflicts, strengthening landholders' negotiation position in the process of land acquisition bygovermment etc.

MethodoloPVBased on the household- and plot-level data collected by SMERU, a standard econometric methodologywas used tn analy_e the effect of titling on land pnrices to et the economic rate of retur. Land prices wereused as a proxy for economic value of land to calculate ERR under the assumption that all titling benefitswill evenhlinllv he reflected hv the pnice chamge- that ija the change of land nices captures the net effect ofall the benefits of land tilting. Many factors affect land prices besides the land title; therefore, factors otherthan land itte .were enntrolletd in order to have a setmeininful analvsis= These are: familv characteristics(such as consumption per capita, education level, age, and gender of the household head, etc.) and plotcaraeteristics (sc wh as whether there is land-mnmvenent investment nn the nlot since the LAP. if theplot is house, what's the construction materials of the house, etc.). Also controlled were the regional,vnantm hu *g,na n rWn,nnr',t d1 mMV vari.ahies (7 nmvinmtes' To anjiv7e thie different imnst. nf land

titling in urban and rural areas, sub-group analysis was made in addition to pool whole sample (controlgro n and -.miept grps rn im' tnaethev The ttal nint csmnlR nirmher uws 077

The overall economic rate of retum for the project is 33%. In urban and peri-urban area, the ERR is 32%,ea .r-, 'IQO- i,. a ve sne, abu 3an ha at#.h.,vtdA to the lanA titl4n],

The number is 37% in urban area and 52% in rural area.

- 17 -

The analysis shows that the economic rate of etun of the LAP is 33%, and the ERR is higher in rural areath-o. + ,, ;,, -wl.~a, aa rAne 4;"An";, . A.n $, V.I~DT T'., .s..A-, n.A- .. 4 A.+;na1 -4A-nnono

t.h_n 1>)s st -- -- °t-^9 . ,m -- L&' wN,.va tUJ s ObJ ge 0 .- _I;.;f0f9I wnco 3

analysis: the land tax (PBB) in the project area has increased about 33.2 percentage point higher than that_;ons or^9Tt *,2,.I No + -^ A +16.+ +16 DPPll -r -l1-1oA ;_AoA-+]. I-, +U_AA0^

VAwj. *I V _ - UVeJ ..SJ *I '.Iso .1 W.W U V} LU UA . Sa

based on the mrnket land prices in different ars. One limitation of the analysis is that landholders'perc-I16 FLI~ -VU. tt, RAIU..GU %YA LVAG.L IC 515. FjLLD.,% L-,WMOWW UI" UAULLUP. J~1 'uJa U.IU 1IcLu UU5aLLUUWLi3 Ii

the whole sample was very limited (39 in the LAP area and 12 in the control group).

B. Financial Rate of Return (FRR)

Financial beneflts and costsfor the GovernmentiL 8UVg ..ULtU& rweIVed invrLUWal 1mvW1um vinanclas uen(j^i5 ) UfUIU UV iuuuwUng bumw2iL

1. Project systematic registration fees (until the end of 1999);a "!a... ---A ~ _ n T_ _ -"-- !I n.e. - Ann.r'n * T y. I, _r In- _L A ret, ---2. Right Acqui iuuL L n iXind anu Buuding orn I D). Ami imo.A. ;i oI x Y7 imuuuuucu 5%/o buyers

tax which applies on all derivative registration and on first time registration of State land. The first Rp;0,000.U,000J is VAVUpuuue m -wx UpI w 2001. llSxm exempuon fguirc wu oc increased oy Rp S runno

every subsequent 5 years. Based on the data supplied by BPN, first time registration of State landrepresents abut 2u-/0 of alu regisuiations; and

3. Payment of income tax on transfer of right on land/building (5% sellers tax, Government RegulationNo. 4 8/iw4). Ainy subsequent sales of syst matic registration titles sh oux oe inciuaed as these taxeswould not have been collected had the project not commenced.

The financial costs to the government are the all project cost (including Part A, B, and C) and the loaninterest costs (8%, based on Loan Agreement) and the Government's fiture management costs associatedwith each title issued by the project (2.5% of average cost of each project year). The reason why the loaninterest costs are included is that the government will pay interests on loans that support tte project and thusis a direct additional cost of the project. Should the interest costs be excluded, the FRR will be 16.5%.

Methodology and major assumptionsAll calculations are based on the actual costs and benefits associated with the LAP I (1994-20 0). Theactual benefits (revenues) are extrapolated over a 35 year period and no further assumptions are maderegarding any expected changes or enhancements to these current actual benefits. The capital dLscountfactor is 0.1. Derivative registrations (turnover rate) is 1% for year 2-6, 3% for year 7-20, and 5% foryear 21-35. These figures are based on the observations made by TA team financed by AUSAID (LASAValuation Report, June 20, 1996).

ResultsThe financial rate of return (FRR) is 15.3% and the NPV is 43.5 million. The FRR is financially sensitiveto the changes of the base assumption of derivate registration. Should the assumption be changed to 5%turnover rate for all periods, then the FRR will increase to 200/o.

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Table 1 Calculation of Financial Rate of Return (unit: US$ Millon)Year Cosis Benefiis

BPHTB BPHTBRegstadt,on Fee Fl. S,-0 Reg.stml*on De h-, Sel'e T,-gX

1 2.84 0.01~,.O W.Wn,2 n4

3 18.25 0.27A on nn n an2 n47 n17

5 8.89 0.99 1.82 0.49 OA96 9.17 2=R7 0-79 0.79

7 6.89 0.98 1.19 1.198 4.27 0.04 1.94 1.949 3.48 2.72 2.7210 3.30 3.55 3.5511 3.11 4.42 4.4212 2.91 3.36 3.3613 2.69 4.32 4.3214 2.46 5.32 5.3215 2.20 6.38 6.3816 1.93 7.49 7.4917 1.64 6.68 6.6818 1.33 7.90 7.9019 1.00 9.18 9.1820 0.64 10.53 10.5321 0.25 16.62 16.6222 0.25 19.10 19.1023 0.25 21.69 21.6924 0.25 24.42 24.4225 0.25 27.29 27.2926 0.25 27.01 27.0127 0.25 30.17 30.1728 0.25 33.49 33.4929 0.25 36.98 36.9830 0.25 40.64 40.6431 0.25 41.19 41.1932 0.25 45.22 45.2233 0.25 49.46 49.4634 0.25 53.90 53.9035 0.25

NPV=US$ 43.5 millonFRR=15.3%

Annex 4. Bank Inputs

|Stage of PiojectiCycle J No. of Persons and Specialty Performance Rating[ 1 (e v 2 FennamiRtq. I FMS etc.) Tm,p,,atnnIflPvelnrnPi,t

MontWYear| Coint Specialty | 4 Objectivege

IdenufncationlrreparauonJune 1992 3 1 TM/Economist, I Land S

Sept. 1993 3 As above S

AppraisaUNegotiationNovember 1993 I 5 1 TM/Economist, 1 Counsel, S

I Surveyor/Land Specialist,lSociologist,l Adm. Asst

SupervisionOctober 1994 4 1 TM/Economnist, 1 Land S S

Specialist, 1 Sociologist, 1Procurement Specialist

May 1995 3 1 TM/Econonist, I Land S SSpecialist, I Sociologist

November 1995 4 1 UFMIiEconomist, i Land S SSpecialist, 1 Procurement

July 1996 4 '1 TM/Economist, I Land S SI P..DW, 1. tVa I ISpecialist, 1 Sociologist

Febmiay 1997 2 1 T, /.;conom.. t ! .. LD8 d S I4S

December 199. 3 SpecialistIflere.iher 1Q97 1 3 1 1 TM/Frnnnomsiqt 1 Land S S

Specialist, 1 SociologistSentember 1998 I 4 1 TM/Economist, 1 Land S S

Specialist, 1 Sociologist, 1Procurement Specialist

May 1999 3 1 TMEconomist, I Land S SI l l Specialist, 1 Sociologist

November 1999 2 1 TM/Economist, I Land S |I l | Specialist

May 2000 4 1 TM/Economist, 1 Land S | SSpecialist, 1 Sociologist, 1l l Procurement Specialist

February 2001 3 |lTMEeconomist,lUrbanLand S S

October 2001 3 | 1 TM, 1 Sociologist, o | SiICRg rrocurementbSpeciaiist

|CR April 2002 5 1 TM/Economist, 1 Land S SSpecialist/ 1 Urban LandSpecialist, i Sociologist, iProcurement Specialist.

Mix of HQ and Jakarta Office Staff. Note: TM: Task Manager

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(b) Staff

Stage of Project Cycle ActualLatest Estimate2fl ann - -> I US$ ',VVV

Identification/Preparation 160 48.0110.0 90.0

Supervision 1.0. 330.1 1~~~~~~~ ICR 12 0A5.

|Total | 1.68!0 [ 504.0INI.D. iL n LUD 1O'jD anJU IV Y 4lU ULU JLUAUre iV L. UaWL.

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Annex 5. Ratings for Achievement of Objectives/Outputs of ComponentstA=Ail...JX~.. TvL - -.. 1 'Lw ,T?J..L1. e t A=.'Tw A '1iLIe)

RatingFl .^a7 >Z,n ..... y UCT I M' u Nb * .AL-_J %-~~~~~~~~~~~~~ .. ~~ UL .- -7 -,.. A W £ Vf

O Sector Policies O H OSUOM O N O NAL-i.. UOtA 1_ ~.. . AL I J J- . I V

O Finanial O H OSUOM O N * NAIQ1 I 4,V....l fl..~L.,.... r r_ n c;rr ab Ar Alr r) AlA

L Environmental O H OSUOM O N * NA

Sociala Povertv Reduction OH * SU O M O N O NA

El Gender O H OSUOM O N * NAFl Other (Plese snecifv) nH C) su C) M C N * NA

OPrivate sector development OH OSU*M O N O NAOl Public sector management O H OSUOM C)N * NAO Other (Please specijfy) O H OSUOM O N * NA

Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory. U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Ban Kperformance Rating

E7 Lending OH.S@*S OU OH.UZ Supervision OHS OS 0 U 0 HUR5a 0verall n HS *S O U n)HU

6.2 Borrowerperformance Rating

3 Preparation OHS OS 0 U O HU12 Government implementation performance 0 UIS O S 0 U 0 HUZ Implementation agency performance OHS. S OU O HUZ Overall OHS CPS O U 0 HU

Annex 7. List of Supporting Documents

* Staff Appraisal Reporn, Indonesia Land Admninistatiun ProjTt, August 1 1994, IBRD Report Nob.12820-Ind.

* Project Supervision Reports 1995 - 20wi, iBRD.* BHP Consultants Ltd. Reports prepared for AusAID/WB Supervision Missions.* AusAID Project Completion Report for RAP, 15 OctoDer 20i.* BPN ICR Part A and Part B, May 15, 2002.* BAPPENAS iCR, Part C, May i5, 2w2.* Review of the Basic Agrarian Law, W. Wright, December 1999.* international Comparative Review of Land Administration initiatives, G. Barnes, 1997.* Land Acquisition and Development Controls in Indonesia, Hamilton and Sumardjono, June 1998.* Spatial Development Plannig in Indonesia, Aunicht and Rais, December 1998.* Indonesian Land Law and Tenures, J. Wallace, July 1999.* Traditional Land Law Perspectives, H. Slaats, June 1999.* Forest Land Issues in Indonesia, Blomkvist and Djuwadi, 1999.* Commercial Transactions in Land, Wallace, Poerba,and Brenner, December 1999.* Sustainable Development and Land in Indonesia, Zwahlen, Soewardi, and Ferguson, April 2000.* Displacement of People and Resettlement, Zaman, 2000.* Institutional Reforms for Land Administration in Indonesia, Soewardi, Fourie, Menlaws, and

Williamson, July 2000.* Various Special Topic Reports of the LASA Technical Assistance Advisers provided by AusAID.

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Annex 8. Beneficiary Survey Results

impact Evaluation of Systematic Land Titling under the Land Administration Project - SMERU LocalNGO.

1. This study entitled "An Impact Evaluation of Systematic Land Titling" was undertaken at therequest of the World Bank, and conducted between January and May 2002. TFhe general objectives of thestudy are to assess: (i) the economic and social impacts of systematic land certification/titling under theLAP; (ii) the ways in which the process of implementation of certification has affected outcomes; and (iii)policy conclusions and implications for further policy development.

2. A quantitative survey that involved questionnaires and was supplemented by in-depth interviewswith key informants was used in data collection. Fourteen districts and cities in which the LAP had beenconducted were selected purposely for data collection. Within these areas, sub-districts (kecamatan) werechosen purposely based on the extent of urbanization (urban, rural and semi-urban characteristics), as werethe specific kelurahan and desa selected as research sites. In all, 1,596 respondent households wereselected randomly from within the villages. These consisted of 1,004 households that received a landcertificate under the LAP, 84 households that lived in the same area and who were eligible but did notparticipate in the LAP, and 508 households that could not obtain a certificate because the LAP was notcarried out in their area. The third group was intended to be a control group. In addition to the survey, avisit was made to Nagari Tigo Jangko in Tanah Datar District, West Sumatra. The purpose was to make aqualitative study of a community mapping pilot project supported by the World Bank for the mapping ofulayat land and in particular to ascertain the extent to which the pilot project has been carried out.

3. Some 15% of the 84 non-participant respondents said that they did not have the opportunity toparticipate in the LAP because they could not submit adequate proof of their ownership claims. However,the most common reason given was they lacked money at the time. Other reasons for non-participationwere conflicts over land boundaries, non-subdivision among heirs of inherited land, insufficientinformation, no advantages in having a certificate, absence from home at the time of adjudication andlateness in making an application.

4. The official charge per land parcel for LAP certification was Rp 11,500 in urban and semi-urbanareas and Rp 2,500 in rural areas. Information from respondents, however, indicated that the average costfor the certificate itself was Rp 13,204 and that actual expenditure on certification ranged from zero to Rp100,000 because of supplementary costs. The total average cost was Rp 36,449 with the inclusion of othercharges and was higher in urban and semi-urban areas than in rural areas.

5. The majority (94.7%) of respondents who participated in the LAP said that the time, effort andexpenses taken to obtain a certificate were small by comparison with the usefulness of the certificate. Morethan half felt that the certificate would be verv useful. while 39% mentioned the low cost and the easvprocess as benefits. In saying this, respondents were maling comparisons with the trouble, money and timeneeded to obtain a certificate through the snoradic nromr. Anprximately 700/% of resnondents believethat they now have greater security of tenure because a land certificate recognizes their ownership rights.(A kilurahan is the administrative unit below a sub-ditrict in an area officialv classed qs iirhrn while S,desa or village is the corresponding unit in a rural subdistrict).

6. The majority of respondents (89.7%) said that there was no discrimination against womenndholders Aring the T AP nrnpess However, s,ey data revea a stonEg .dmcy for the husband's

name to be put on the certificate in cases where land has been purchased jointly by husband and wife after

marriage. In 70.90/o of cases the husband's name has been used, with only 16.9% in the wife's name and3% in both names. The tendency is somewhat greater in urban areas than in mral areas. The reason givenby the majority (86%) of respondents for this trend was that the decision about the name to go on thecertificate was rnade by husband and wife together. BPN officials, however, stated that they used the namewritten on a deed of sale or a receipt in preparing LAP certificates for purchased land. Where land has beeninherited from the wife's parents, the certificate was issued in the wife's name. In the case of landoriginating from the husband's side of the family, the certificate was in his name.

7. Information fron key informants indicated that there are Indonesian citizens of Chinese ethnicorigin in survey LAP areas and that they had been obliged to meet one additional requirement in the form ofproof of citizenship when submitting LAP applications.

8. The proportion of the average number of land parcels certificated through the LAP in all qtuntilesof per capita household expenditures is greater than 90%. This indicates that systematic land registrationtouched all socio-economic groups within the community.

9. With expansion in land titling through the LAP, there has been a net impact in the form of anaverage increase of 12.8% in the mortgaging of land with certificates as collateral. The highest impact wasin rural areas (28.4%), followed by semi-urban (13.4%) and urban (2.5%). Analysis by monthly per capitahousehold expenditure reveals a U-shaped pattern in the impact on the use of certificates to obtain credits.The highest impact (15.2%) occurs among respondents in Quintile 1 and the second highest is in Quintile 5(14.7%). while the lowest is in Ouintile 3 (9%).

10. The average net impact of LAP certification on investment in land imrovements is estimated to be5.3%. The highest impact (12.3%) was found in rural areas. Comparative figures for urban and semi-urbanareas are both around 3.5%. Most of the imnrovements consisted of the buildine or reDair of houses. but ina few cases they took the form of a change in land use, with rice-fields being replaced by a house.

11. Systematic land titling through the LAP has had a net impact of a 1.7% increase on the extent ofland transactions in the survey locations. The tvne of land most commnonly sold has been home-lotsfollowed by non-irrigated land.

12. Survey data indicate that the LAP caused the PBB tax to rise by an average of 33.2%. The highestincrease was in urban areas and the Inwest in semi-urhan Incations- There were no increases in villavelevies and no new fees or charges were introduced.

13. In the perception of respondents, the net impact of LAP certificates on the value of land was ana of 54. 5 nn lnA- pru~ Th.e hin-,pat *n r t (133.2,O/A hAa1 ,eA *n I rn a. Whl1in semi urban areas was 32.8% and in rural areas was 64.6%.

14. Two aspects of the wider impact of the LAP were mentioned by key informants. The first is theesublshmmtof ne.w of4=,cs- no-;es inAs k J - *-"- -wh.- T AD p- 441- U - pa1, Aces-U0IfLJULIU.1LU, 1)1 U~WILM'S~ U)'Y U1CUIWS AU SUDA U.LIC1E LUWiILO WY1LC.M LJIL 1SaIC ULI.UUf... Lao MCC plaC4.,

which implies that there is now more demand for notrial services. The second is the decline that haso - _ - - 3 n s-IL- 1i-c -eus,sneve--d _-- u -e nov -led a -. -eleesUW5UJLLLLU LU VU1U5%U lILA OUUJ LUDUIL~L 1r.VW.UUV, bUU%X ivwui JUU UW.ZW..UUJJ D.LU LIJW EJUUUJLVU tuL UIb JIVVVIU

15. One effect of the LAP on nearby villages has been increased awareness of the benefits ofcertification. There is, however, no indication that the LAP has encouraged an increase in sooradic landregistration, the cost of which has always been very high. For that reason many communities are attempting

to establish a swadaya (self-help) system of land tithtig that would be somewhat more expensive than theLAP yet much cheaper than sporadic registration.

16. Some 94% of respondents said that the cost of LAP certification was no burden on householdfinances. The majority (78.9%) feel that, if the cost of the certificate has to be raised, it should be no morethan Rp 50,000, or Rp 90,000 if supplementary charges are included. This is much lower than amountsquoted by certain control group respondents who, in planning for swadaya certification, have proposed Rp150,000 to Rp 350,000 per parcel. Many feel that the cost of a certificate should be related to the size ofthe land parcel, while others suggest stratified charges that would reflect the size and location of the land,proximity to transport and the other factors.

17. With regard to the community mapping pilot project in Nagari Tigo Jangko, research revealed thatthe pilot project, as carried out, has differed from what was intended and in reality has adopted the standardsystematic adjudication (LAP) approach. Instead of identifying the boundaries of ulayat (traditionalcommunal tenure) land, the Land Office surveyed and mapped parcels within the residential area. Theresult was a map showing some 1,505 land parcels. Copies are kept in the BPN office in Jakarta and inprovincial and district Land Offices and have not been forwarded to village officials and other stakeholders.Up to the time of the SMERU visit in April 2002, no land certificates had been issued through systematicregistration as a follow-up to mapping. The reason given by the district-level Land Office is the absence ofinformation from the central BPN office about the continuation of World Bank fimding. Less than 30% oftraditional lineage family heads (uncles in this matrilineal society) objected to surveying, mapping, orregistration activities.

Annex 9. Stakeholder Workshop Results

A smikenohuer woncshop was nelu on ivMay 14, 2w2J to WsUUss -he alUM iUUpUtL x-vtiuaUUUO R.plU ului

project's ICR. The participants included senior government officials from MoHA, EKUIN, BAPPENAS,BPN, eight NGOs Including an aaat representautive from Aceh, representa-ives f:rnm acadmia, a-nurepresentatives of six local governments. The participants welcomed the opportunity to discuss the impactof the LAP and concluded thai the certification program was a clear success. Paricipants believed that tneSEMRU's study was conducted in an independent and objective manner and hence accepted the study'smajor findings (see Annex 8 for detail). Tne discussions of the workshop basically can be summaizedaround three topics: continuation of the LAP program, land policy issues, and other land administrationissues.

Continuation of the LAPprogramParticipants believed that the LAP has inproved the awareness of local communities regarding theadvantages of obtaing a land title. Companng with the sporadic certification program, the LAP alsoprovides an opportunity for landholders to get a title in a fast and cost-effective manner. Therefore, theparticipants, particularly those from the regional governments and local communities, expressed a strongdemand for continuing the program with some modifications. The modifications would focus on increasingtransarency, improving socialization program by better involving local communities and its leaders,paying more attention to the area with serious land conflicts, and effectively adapting to the ongoingregional autonomy process.

Participants understood that the LAP certification is highly subsidized. To reduce the government's fiscalburden and to ensure more people benefit from the land certification, participants also suggested to promoteswadaya (community contribution) program in relatively well-off areas. Government officials indicatedthat the land administration program will be continued even if there is no external financial resources, suchas the World Bank loan, which clearly shows that the govermment attaches great importance to the landadministration program and their willingness to push it forward.

Current practice is that the LAP adjudication team will avoid land parcels which are still in conflicts,except the conflicts can be solved quickly through community consultation. Participants understood thatsolving land disputes was not and also should not be the responsibility of the adjudication teams.Therefore, participants hoped that a separate team can be established to settle the land conflicts besides theadjudication team

Land PolicyParticipants from the local governments, NGOs, and academia pointed out that an integrated land policy isneeded and expressed a clear demand for land policy reform Various existing land-related laws arecontradicting with each other. Participants pointed out that land management would be an impossiblemission to perform if an umbrella policy is not available, which is particularly true after the enactment ofLaw Number 22 of 1999.

Participants emphasized that the issue of adat/ulayat (traditional) land should be addressed from bothnolicy and technical administration prnspectives, but the policy should a priority. On the policy side. as thefirst step, a national fonum should be established to enable an open discussion between the government andthe anat mrnminitv to reach a consennLs on the definition of the adat/ulavat land. On the technical side-there is no record exists about adat/ulayat land at all and participants believed that land mapping is neededhkdi.pe the nolirv dialngiec. The retnrd vyten_ of adathilavat land will serve a ha e for caolvina mnanv

land conflicts.

Other Land Adminitradion IssuesParticipants argued that an comprehensive and periodically updated land information database is urgentlyneeded. This information database has important implications to solve conflicts related to land acquisition,location pernit, and other land disputes.

Some NGO's criticized that the BPN is not transparent enough and does not provide room for communityparticipation. "Informal payments" are still being charged as a result of the unawareness of the publicregarding the actual certification costs. BPN needs to change its mindset as well as its operation approach.

Some participants also criticized the negative system of land administration in Indonesia and asked forexploring the possibility of transforming it into a positive system, that is, land titles would be guaranteed bythe Government

Additional Annex IO.Summa ry of Government ICR

Part A and BSummarv and Condusion1. The iuplementation of LAP progressed satisfactorily with major objectives accomplished. TheProiect has achieved the target in land titling; cadstral mapping. record manazement institutionaldevelopment, and legal and policy studies. The targets were unmet in the sub-component of Base Mappingand Gnrahical Indices (GIM' in LAP Part A Alheit Customer Relations and Services (CRS) in LAP PartB financially realized the budget allocated, the findings from a number of studies and observationspinpointed the lack of transparency in svstenmatit- land repistmlinn memaing ineffective fiuctinn of CRSactivities on the field. The delegation of CRS function to Land Offices would improve the effectiveness of;infntrmatinn dic*pmin2tinn and Inhlii, tnnciultntinn

2. As the core activity, the distribution of almost 2.0 millions certificates to eligible land holdersprovides the benefit of security of tenure to almost 2.0 millions families. The study revealed that the projecthad no adverse impact on their livelihood and benefited them in term of greater security of land holding andpride by landholders about their land rights; security against eviction; the setting of long standing landdisputes; greater ease in settling inheritance matters especially with children, increased land values, andmore incentives to improve properties.

3. Systematic land registration under LAP has been pro-poor allowing the project beneficiaries withlow income to secure land certificates in a simple, low cost, and timely manner. In addition, LAP haspositive outcomes on the improvement of land administration infrastructure in BPN for land resourcemanagement and development. To have impact on other sector, an up and downslream linkage isprerequisite for project arrangement in the future undertaking.

14. inu LaUU twunouiuou[ riujsuu tiujwca uoi riugr7m hU pFlyed a Uig LUIF In iUiLW 1 ulWe

acceleration of land registration in Indonesia. The LAP has a significant contribution compared to similarprojects such as PRONA, PRODA, PRPT I , PLADP beside Routiie ActUviLes.

Manavorial A enfle1t

5. Project Management Committee (PMC) and Project Technical Committee (PTC) are consideredrplIv.nt in the fnrmi_ibtimn nf qtr2tPrie snd h'phnin1 nnpiOLipe tn he .n lnntpi in the fiutirp in nrdor tn

accommodate across sectors;

6. in the autonomy era, the structure of land Administration Project suffice to manage projectactivities with a modest modification to reflect decentralization of land affairs;

7. To effectively and efficiently perform project activity at Pusat level, the authority of projectmanager should be up graded from the current status of "Bagian Proyek" (Sub Project) to Proyek(Project); and

8. Rule of the game for project management among three level of administration-Pusat, Provincial,and District- should be in plce to warant sucessfiui imp-lemtentaion of future undertaking;

9. The implementation of acceleration land registration by the systernatic land registration has tosupport the aim nf Tand .Adminitration management i.e. the availa1ility of the infrastructre of landregistration The future undertaking has to prioritize the provision of infrastructure of land registrationpJrIJI to Iau -dJd

- 30 -

10. The setting-up of Standard Operation Procedure (SOP) on all aspect in the implementation ofsystematic land registration is a must , to include the surveying and mapping aspect, legal data collectionaspect, the specification of land registration product and land record, structure and format of digital data.

11. The necessity of culture mi Quality Management to include quality control, quality assurance andcontinuous improvement

12. a unification of mapping system with related sectors is a prerequisite to facilitate the linkage ofparcel-based information produced from BPN products, thereby allowing a multipurpose infornationsystem to develop.

13. To improve the tnmsparency in systematic land registration implementation by changing paradigmon the public service to the customer focus. This could be implemented by empowering the CRS unit atLand Offices in bringing out the information about the systematic land registration to the public.

14. In the autonomy era, LAP needs to empower Land offices to perform a bigger role in day-to-dayoperation of LAP while Pusat allow to have a role in the maintenance and supervision, and set up standardof quality, thereby transferring the technical aspect of systematic land registration is directly under thecontrol of the Head of Land Office as provided by the PP No.24 year 1997.

15. To accelerate land registration requires the recruitment of huge number of employees but theavailability of staff is limited, however the Pilot Project in Tangerang and Malang in empowering thelocals to become partners adjudication teams demonstrated possibility of overcoming the limitation of staffby employing locals as partners in systematic land administration process.

16. To built the capacity of the Land Office in undertaking the acceleration of land registration byconducting trainings in systematic land registration the whole land offices, the provision of officeequipment to sustain the land record management.

17. To extent the areas of systematic land registration, empowering the BPN partners particularly insurveying and mapping is a must, but the license surveyors are mostly based in Bandung and Jakarta,consequently the budget for mobilization across the country become more costly . The project should,instead, empower the local partner as much as possible by undertaidng cooperation with some organizationsuch as APSPI (The Indonesian Association of Surveying and Mapping Corporation), ISKI ( IndonesianAssociation of Cadastral Surveyors) and ISI ( Indonesian Association of Surveyors).

PoUijcalAspect18. The execution of grand development program requires "Political will" and consistency from topmanagement involved, political will is always the key ingrecient in any development initiatives in Indonesiato pave the way for the improvement to happen.

19. Statutory mandate to register all land ownership throughout Indonesia requires the government toadvance participation from the community with self-financing any development initiatives by as the optionto loan scheme and state budget and to set up institutional arrangement ( "Rule of the game") to allow thealternative scheme to take place.

Part C

Assessment of Development Objecive1. The obiective of LAP part C was to support GOI's efforts to develop land management policies. Thepolicies were expected to provide new guidance and direction for national land managemnent as well aspinciDles relevant to current condition for resolving the land-related issues. The objective was veryimportant and relevant to the need of GOI to develop national land policy and management system.Realizing the complexity of the land related prmblems due to Indonesian geogphical factor, culture andcustomary law, the magnitude of vested interests and the multitude of the players of players involved, quicksolution for land-related issues cannot and should not be sought This nart of the nroiect was introducedbased on recognition that developing national land policy and management system thrmugh aprner-orientad annmach and facilitate an interantive fonrnlaiton of solutions was very imnortant to dealwith the land-related issue.

Oiginal Components2. Psrt C iS sm integrated promrm of shtdies, seminsrs and .wonrkchnnq on scAP&Pd tonic qr-e- siin landmanagement and aiming at supporting policy formulation and inter-agency coordination, while drawinghpavilu nn inApmAtinnnl eYpvnPnt-_P CnrniinnP_ntc ehn16 n WP.P tnnittt ,W,vth thi nhip-ti,p incti,tuinnal

capacity and have considered previous activities related to this project Through part C activities, thenaftue of the problemm would be srni2jhA npStnn fnr imnmnPn Yt pyitna ,ipcs Mipntifi;APA wlipi

guidelines developed and action plans formulated. Part C should have been inter-actively linked with part A.an B, by aAdressing Snp-fi,r kisspu in Ls nd anfJin.,cvatn u,hiph pnnft hp r,.IwM hi by PN itself civh me

the issue of forest/non-forest boundary areas. Topic areas in part C include: (a) Institutional roles ofam ,a,nmn age a-nciae i,n,pAe with .A and « TV'irot an-rnhes nf land ain;on

(including the location permit or izin lokasi), (c) Displacement and resettlement people, (d) Option for landQass.4., (IA; 1-A l,4al'r (ia CAl A _ (4 T ;-T -aA .rn14, f-N

Forest-nonforest boundary issues, and (h) Land management policies aimed at sustainable development

Outcome/Achievement of Objective3.~ - .noi; -A,w A.1h reason s .F- ' 1, bas t C not 1-. .1l- to

J LUJV,I,. .,uuom- Is~ *4.%j 10 "W. 11J aGWUaSAWJLLJJ 10 V.1G1~ a~.0W £ Ua, jJG.1 U, Ml %P U%,V" GIJ1V, 1m

achieve the objective of this part which was to develop land management policies. Instead of in the policylUl- A. u - -I r u ti u.uar ja u e. u iu o is& : on . r__ 01 wuu &e -_ uuw uA-Iy

applicable as policy formulation. Second, the main language use on the reports was English. The Englishv -,o a ue uuXtdi o:L I-uuv- o-v -erno -11 lO--w L_. .ve thTuoein e-i.VuLb1UU Wdlz UiVU UawJaw. "IU 11110 1 lub1lMl. A1UWrVVrA, UUL 411 ~IVU1I LW VV UJLV, UUVUQ1W~U1 VVIbLULL JUk

addition the Indonesian version is more difficult to understand due to changes of meaning and terminologiesused. These iave w-used sume diffcutiues aid required additonal effonr LO understanu d tu e result of thiestudy. Third, some changes taking place in the last few year in Indonesia has brought the country intodemocratization and decenalizauton. it has now become centua issue in indonesian development includingland management Since the policies formulated through part C were expected to provide new guidance anddirection for national land management as well as principles relevant to current condition for resolving theland-related issues, the result of the study needs to be reviewed and updated if needed to make it suitable topresent condition and requirement.

Output by components4. The result of the program of studies was in the form on document reports and on CDs. The reports wereorganized into a number of topic cycles as follows:Topic Cycle 1: The Institutional Setting for Land Management PolicyTopic Cycle 2: Land Acquisition and Land Development ControlsTopic Cycle 3: Spatial Development Planning, Land Use Planning and the Land Development Process

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Topic Cycle 4: Indonesian Land Law and Tlenures - Issues in Land RightsTopic Cycle 5: Forest/Non-Forest Land IssuesTopic Cycle 6: Commercial Transactions in Land-Secunty Interests in a Market SystemTopic Cycle 7: Sustainable Development, Environmental Impacts and the Land Development ProcessTopic Cycle 8: Displacement of People and ResettlementTopic Cycle 9: Final Report and Policy MatrixTopic Cycle 10: Institutional Framework Reforms for Land Administration

5. In addition to the topic cycles, a web site at address http://www.landpolicy.org was also constructedunder part C to provide a place for land information and public discussion on the land matter. However, theweb site is not optimally maintained since the hand over of the website from the consultant to GOI was notrunning well.

6. An International Conference on Land Policy Reform was held on July 26-27 2000 in Jakarta. Theconference invited intemnational and national experts to review and advance debate on land policy reformfor Indonesia. Learning from the papers presented by international experts and discussing with them wasactually a good opportunity to leam experiences on how dealing with similar land issues in other countries.The result of the conference, however, was not used by the consultant to improve the product of the study.

Insttutional Development Impact7. This project has provided learning experience in land policy and program development process, as wellas action plan in land management considering the resources available. However, the result of the study hasvery limited impact on the govemment land institutional development since the consultant was conductingthe study exclusively and failing to make positive cooperation with related agencies. The consultant did noteven officially submit the final result of the study to GOI.

Major Factors Affecting Implementaton and Outcome8. Although most part of the project was satisfactorily performed, there are some aspects that need to benoted. Firstly, There was no official hand over of the project result from the consultant to implementingagency. This had caused difficulties for the implementing agency to have the overall document reports.Secondly, Chief Advisor of the consultant left before the project was finished so he was not able to givefinal comprehensive presentation on the result of the project. Thirdly, at a meeting before the end of timeperiod for the consultant to manage the land policy web site, it was agreed between the consultant and theimplementing agency that a redesign would be made so as the web site would be a suitable representationof GOI. The consultant, however, was not fully successful to perform that task

There was also a complaint from an Indonesian expert since her work (article) was used by expatriate inthe study without providing any credit to her. In addition, there is a problem on the web site that needs to beresolved by the consultant since although the website has been handing over to GOI underwww.landnolicv.org- up to now. there is a web site that usina name and information of LAP-C beingmaintained at the address of http://www.sli.unimelb.edu.au/Deople/Iandpolicy/.

9. The responsible person involved in part C such as project duirector, project manager etc changing se;verali

times due to organizational restructuring in the implementing agency and other agencies involved. Thissituation had caused some difficulties in controlling, coordinating and maintaining the sustainabliiyi of uteproject There were some issues need to be noted. Part C experienced implementation delay to 1997.Beside, during the project time, communication and coordination with the consultant as well as evaluationand monitorng were not smoothly performed. These might have contributed to the exclusiveness of theconsultant in conducting the study.

Sustainabiiy10. Sustainability of the project is likely, as LAP will be followed by an activity entitled LandManagement and Policy Development Program (LMPDP) that will assist WI0 desigmng a program in landmanagement and policy reform. The program is expected to produce policies that will serve as the mainreference of the Indonesian land management This activity is important considering the transition to thedemocratization and decentralization that Indonesia is experiencing and the need to resolve land relatedconflicts. Through LMPDP the need of GOI land policy and management will be reviewed and pnioritized.The LMPDP will put emphasize on the aspect of taking the result of the previous study including part C asinputs in developing land policy and management that is suitable to Indonesian current condition.Therefore, LMPDP study will take many advantages from the result of LAP-C. With changes andmodification made as adjustment of Indonesian current condition, the study result of part C should be agood basis for LMPDP.

Bank Performance11. The Bank performance in assisting the project is rated satisfactory. Bank had given support over theproject period either through the Jakarta's office or through the supervision mission. In general, the Bank'sstaffs had provided adequate assistance and have developed good cooperation with GOI. Bank had beenable to solve the arising problem and provided support for any changes needed during the project time.

Consultant Perfiormance12. During the period of study the consultant had studied many aspect of Indonesian land policy andmanagement and had been qtutely successfully writing them in the form on document reports and on CDs,which is organized in 10 topic cycles as on point 4.2. The consultant had been also built a website for landpolicy and conducted an International Conference on Land Policy Reform in Jakarta. Despite theachievement of the consultant, there are several things need to be noted for improvement on the futurerelated activities. Those include officially handing over the result of the consultant work to theimplementing agency as representative of GOI, having the Chief Advisor/expert or his representative toperform final comprehensive presentation on the result of the project, and not using the study materialincluding the one in the website after the official hand over of the study.

Government13. The govermment and implementing agency overall performance were rated satisfactory. On thefinancial aspect, since land policy management was an important issue of national development, GOI hasfilly mned the proiect through provision of countermart fund. In addition GOI was always available fordiscussion regarding the issue and problem facing the project. On the technical aspect, although, there weresevera. changes on the pronject management due to norganization restrnuturing the irmnlementing agency hadalways made an effort to avoid any delayed and adverse impacts it could be done to the project

L.Mons L---L--

14. Part C has been a good leaning experience for the development of land management policy inindonesia The pRojeC t iias given some opportunities ow ueiuie se-veii UruUiau uu suueglu issues on '--policy in Indonesia such as land policy and regional autonomy, land and povert problems access of peopleto the land and reiated services, etc.

Tne project has also initiated to prepare an embryo of stakehoider forum, which is still man ed untiltoday even in a more limited way. Through this project we have identified competent and relevantstakeholders in government institutions, private sectors, property businesses, universities, research centers,NGOs, etc. These important stakeholders will be assets for developing innovative and transparentcommunications amnong stakehoiders.

The study had also made comparative analysis on how other countries addressed simiiar issues for eachtopic cycle, which will be very much of use for development of Indonesia land policy. The study hasproduced Land Policy Reform Matrix, which can be a useful reference in performing land policy andregulation reform in Indonesia. However, since there is a need to accommodate the changes in theIndonesian governance system into the democratization and decentralization as well as the fact that theresult of the part C study still needs to be modified from discussion paper into policy formulation, LMPDPhas become a significant and necessary activity. LMPDP is expected to bridge the result of the LAP andchanges condition in Indonesian govemance system with the future need of Indonesian land policy andmanagemnent system. As an accompaniment to the study, the workshop has also provided papers andvaluable inputs for many land management and policy aspects from the international and national experts.

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Additional Annex 11.A usAlI) ICR Summary

SummaryCommencing in 1994, LAP has been implemented during perhaps the most volatile social and economic

period in the short history of the Republic of Indonesia. Notwithstanding this, the project has successfullyachieved the titling and registration targets in 5 provinces of Java where, as a result, the economic andsocial potential of more than 1.8 million households has been improved. A gradual, but discemable shift inBPN from a closed, autocratic, self-serving central agency to a more open, inclusive and service deliveryorganization has assisted the governance objectives of the program. Also, the TA has assisted theestablishment of a cadastral survey industry in the private sector of Indonesia to support landadministration in the future. The technical operations of the registration program could be regarded assusainable with evidence of independent planning and implementation by BPN. While Drogress has beenmade in institutional change, this aspect of the program will require considerably more assistance beforechanges can be regarded as sustainable.

The TA Drogram devloved a total of 54 International and National consultants in deliverinn some 250milestones over 7 year of assistance to the project. Significant progress was made in reviewing the laws andregulations that govern land administration. however little imnact was made on overall reform of landpolicy. The separation of Part C from the other parts of the project was not successful and this is onelesson that would need to be carefully reviewed in any further stages. Other lessons from LAP include thesuccessful approach to the education and training program and the development of the pnvate sector toundertake all aspects of survevina and manning. The shortcomings in the Conununitv Relations andServices (CRS) component present perhaps the clearest lesson and reference to this issue permeates mostelementc of the Proiect Conmletion Renort-

Lov.ens Le tadThe key lessons from LAP are:

1. Mobllisation: The rapid mobilisation of a relatively large adviser team tested the capacity of BPNto provide immediate counterpart support. This resulted in some loss of effectiveness in early advisers andpostponement of others. Agreed pre-mobiisation conditions with the implementing agency will assist inovercoming this problem.

2. Agency Capacity: The capacity of BPN to support project implementation, and absorb the budget,in the first two years was over-estimated. This is common in large scale titling projects where agencies,which are generally large and conservative, are called upon to manage programs and resources hitherto notexperienced. As result most loans are extended. While this is not a major problem in itself, there is a lessonthat with more realistic levels of disbursement in the early stages, less pressure would be applied to theimplementing agency.

3. rroject ivMnagement anud ireCuuon; Tne project was most successfu in those areas that wereunder single agency control (Parts A & B). However, it is usual for jurisdictions to have numerousagencies involved in tne land adminisiration function. Some over-arching, high level, committee structuremust be put in place to coordinate and control implementation, however this in itself will not providecoordination and policy direction in implementation. For example the PEC was not called upon todeliberate one policy issue, to provide direction during volatile political times nor respond to oneSupervision Mission Aide Memoire. Establishment of a senior level, full time secretariat responsible forscheduling of meetings and ensuring appropriate agendas should be considered in future project designs.

4. Area Selection: The project design was based on decentralised project management, with

management Supponr umts responsibie for the project at the Provincial (MVISUK) level. However,implementation was too concentrated in three provincial offices. For example, the West Java provincialoffice was responsible for 80 systematic registration field teams at the peak, which was beyond themanagement capacity of the office. The solution was to divide the project into more manageable units byshifting responsibility to the district land office land and the establishment of a MSU at that level(MSUKp). This was done in PY4 and involved considerable re-structuring. In future designs projectimplementation should be devolved to the land office level from the outset and land offices resourcedaccordingly.

5. Customer Relations and Services: The initial focus of CRS was on publicizing the systematicrBglsauonp.ugr-wi"n th -vet loca i:-ue.si i o cove- 'uZ. - fL "-1 ---uneo c-m t a--arIC1Sg~ZUREIG jJLUgI-LUM WIUJIU11 UIC WUgL L iULALLUUc. ILUZ ULLU LIUL VVcILVC lUll tLUll 011g;U UUIIIUU1ULUL aWaictubss

and education needed. Beneficiaries must not only be aware that they will receive a certificate manifestinguieand rights, uUL uLCy m- uau uriuuumcu o0f uac va;ue 01 such a nghi aidu iuc mcnsm Dy whicn this

can be exploited. The term CRS is too narrow and future projects should design a Community Extensioncomponient that rsults in formal mechmanIs for community awareness, consultaion anu participationfrom the outset.

6. Clear Project Goals: A clear distinction between Land Administration and Land Management isnppresciv tn Penreip ndarith Fonr v.rvrmnP a facetnr in the sepfa_atn nf Part C firnm Pirtc A 7 R Was that thf

former involved policy development in land management while the latter was confined to landaAin tration. FL]ti re desi'm AnA ,,nrlr ,,,thin an ^-,mIl T .- A vPni, fra,a-peg- lt f.,.; ,n T .-A

Administration reform.

7. Social and Economic Benefits: The project design included a Socio-Economic Baseline Survey.These methods have been used to prove the overall benefits of larme scale land titling, however they havenot proved to be an effective short term assessment tool. Apart from the elapsed time inherent in theavvroach (between baseline establishment and the follow up survevs). the influence of factors other thantitle registration on the socio-economic status of land adversely complicates the methodology. In the case ofLAP, short term tools are needed to eauae the extent that the exoected benefits are evident in a timeliermanner. The regular scheduling of assessment surveys throughout the duration of the project would havenrovided information on specific issues and point to changes which mav be needed in approach or desigm

8. Adviser Reporting: The contract milestones were essentially reports, many being the final reportsof TA advisers. Considerable attention was given to these reports as tangible outputs for contract purposes.However, the final report is believed to be less important than the impact of the adviser on the environmentcovered by his/her Terms of Reference; change will be easier to achieve while the adviser is present toguide and mentor, rather than through the legacy of a final report The adviser final report should besecondary to a formal process of periodical review of adviser progress toward the achievement of TOR

9. Land Law: Customaly iand ownership, under community based tenure systems, has its ownunique political, social and registration issues that need to be handled with a degree of caution andsensitivity. BPN has begun to address the co-existence of customary ownership and the formal registrationsystem. On a more general note, the numerous types of rights that currently exist over land in Indonesiacreate confusion and make the operation and understanding of the registration system difficult. Thenumerous types, and complexity, of rights will make future computerisation of the registration system verydifficult BPN have commenced a review of the categorization of rights aimed at distilling the existing largerange of rights into two basic types -freehold and leasehold This will simplify future land administration.

10. Community Participation: LAP commenced in an environment where communication andcommunity participation was extremely limited. Tne resultant tension at both local and international levei

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posed a serious threat to the viability of the project. A clear lesson is that major reform programs such asLAP, which not only impact on the community, but rely on their full support for ultimate success, cannotbe undertaken without transparent processes involving all stakeholders.

11. Training and Capacity Building: The TA also assisted a large number of Bank funded intemalturining programs. Pusdikldat itself conducted a total of 21 separate training programs, however the generalquality of the training proved to be questionable. The organizational structure, the skill and knowledge levelof training personnel and the level of available resources within Pusdilat have all been matters of concern.The emphasis generally has been on the quantity of training delivered rather than the quality and itsrelevance to need. Attempts to change training methodologies and the implementation of a modern approachto the development of training modules have generally been unsuccessful. The problem with training hasbeen further exacerbated with the introduction of decentralisation. as the heads of land offices haveidentified low staff skill levels as one of the major problems they will face. The fact that more than 2,000BPN staff undertake trairnig each Year and more than 3,000 BPN staff have undertaken a four yeardiploma course at STPN does not appear to address the basic problem. In future LAP phases, as theDogram moves to the less develoDed regions of Indonesia (off -Java) education and trainin will remain ahigh priority. However the TA emphasis in this component should shift to delivery of in-country trainingrnoraoms in decentralised locations. These proarms should be develoned and delivered bv internationalinstitutions in conjunction with Pusdiklat and local institutions and take priority over Australian basedcourses of study. They could be modelled on a similar oranms being introduced by AusAll) in the T LosLand Titling Project

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Report No.: 23b84Type: ICR