SSRN Id4116190

Al’Afghani, MM | Reconciling Informalities with Indonesia’s Legal System
Reconciling Informalities with Indonesia’s Legal System
Introduction
Anyone who comes to Indonesia will be greeted by “informalities”: from Pak Ogah (voluntary parking
attendants) in streets intersections in major cities to water provision both in the urban slum of Jakarta
and in rural villages in Eastern Nusa Tenggara to the “rules” of artisanal gold mining in the remote
regions of Sulawesi. Rural or Urban, Village or Cities, “informalities” seemed to be a fact of life in this
country. In addition to the ever expanding regulation in many sectors, the unwritten or informal rules
continues to be relevant and important in the daily lives of the populace. It would be reasonable for a
lawyer to wonder, who gave these people (including Pak Ogah) the authority to provide services and
extract resources? More importantly, how do these informalities can co-exist with our legal system?
This paper argues that Indonesia’s pathway towards a “modern state” will need to reconcile
informalities. The methods by which informalities are incorporated by the state through legislative,
policy framework and judicial decision is outlined in this article. Reconciling informalities would
require the concept of “Negara Hukum” to lean towards a more substantive rather than the formal
understanding of the rule of law. Inevitably, In order to grasp informalities, empirical, in addition to
normative reasoning must be embraced.
In terms of access to natural resources, the paper argue that the concept of “tenure” would be more
able to capture social construct and values –including equity-- as it is more empirically grounded
compared to state-created property rights. Indeed, the emphasis on state-created property rights are
not neutral and may even lead to the marginalization of established tenure. As such, judicial and
legislative processes must be able to facilitate tenure insofar as those tenure are able to guarantee
human and environmental rights.
In the preceding section, I will first elaborate the concepts of “informalities”. The subsequent sections
will elaborate the methodology and the 5 (five) different case studies where informalities exist and
the extent to which they are incorporated by the state including their methods of incorporation. The
case studies are: (i) Pilot Study on Water Tenure in Indonesia, (ii) Regulation and Policy of Drinking
Water Provision to urban poor communities, (iii) Phasing-out of Mercury in Artisanal Gold Mining, (iv)
Regulatory Frameworks of Community Based Water Services and (v) the eviction of local communities
Jakarta due to “normalisasi” program. The paper will continue with a discussion on the implications
of these 5 (five) case studies and how it can contribute to the concept of “Negara Hukum” and ends
with a conclusion.
Methodology
The methodology used in this paper is socio-legal. The paper combined theoretical abstraction on
“informalities” and “Negara Hukum”, normative legal analysis (legislation and court cases) as well as
data generated through empirical work (see table below). This paper draws from 4 (four) research
projects undertaken by the author in Indonesia during the period of 2013-2022 across different
sectors, namely water services (two projects), water resources (one project) and mining (one project).
This paper also developed earlier analysis from Shatkin and Soemarwi 1 and discussed court cases
related eviction due to to river “normalisation” program in Jakarta (hereinafter “eviction”).
Research Project Year Funding and Methodology
1
Gavin Shatkin and Vera Soemarwi, ‘Risk and the Dialectic of State Informality: Property Rights in
Flood Prone Jakarta’ (2021) 111 Annals of the American Association of Geographers 1183.
Electronic copy available at: https://ssrn.com/abstract=4116190

Pilot Study on Water 2021-2022 Food and Agricultural Organization (FAO).

Tenure in Indonesia Literature Review, Legal Analysis, Interview with Expert
(Water Tenure) Resource Person (4 people)
Regulasi dan Kebijakan 2021-2022 USAID/IUWASH. Literature Review, Legal Analysis, Group
Terkait dengan Interview with 8 (eight) ministry directorate, 1 (development
Penyediaan Air Minum partner), 1 utilities and 1 Focus Group Discussion attended by
bagi Masyarakat B40 Development Partners and Government Agencies
(Regulation and Policy
of Drinking Water
Provision to Below 40
communities,
hereinafter Water for
Poor)
Phasing-out of 2019-2020 UNDP Gold Ismia. Literature review and legal analysis as welll as
Mercury in Artisanal Field Work (including observation), Group Discussion and Group
Gold Mining Interviews. Group interviews are conducted towards (i) Regency
(hereinafter ASGM) Level Environment Agency, (ii) Provincial Level Environmental
Agency (in the provinces below), (iii) Provincial Level Mining
Agency (in the provinces below) and (iv) Miner’s Asosciation and
Individual Miners in Hargerejo and Kalirejo, Kulonprogo,
Yogyakarta; Hulawa, Gorontalo Utara, Gorontalo; Tatelu and
Talawaan, Minahasa Utara, Sulawesi Utara; Anggai, Halmahera
Selatan, Maluku Utara; Buwun Mas, Lombok Barat, Nusa
Tenggara Barat Logas, Kuantan Sengingi, Riau
Regulatory 2013-2016 Australia- Indonesia Infrastructure Research Award (AIIRA /
Frameworks of AusAid). Literature Review, Legal Analysis, Field Work including
Community Based interview and focus group discussion. FGDs are conducted at the
Water Supply and national level in 2013 (to shape research questions, 19
Sanitation (hereinafter participants) and to communicate findings and explore solutions
CB-Watsan) to national level policy makers (18 participants). Interviews and
observation were conducted in Maukaro District, East Nusa
Tenggara and one FGD was conducted in Ende, East Nusa
Tenggara (18 participants, including local government and local
NGOs). Interviews and observations in Tlanak, Kemlagilor, and
Lamongan villages; one FGD was conducted in Lamongan, East
Java (20 participants, involving local government and CBO
officials from five CBOs. FGDs are also conducted with members
of the local drinking water association in Lamongan, East Java
(five participants) and with members of a Tlanak, East Java CBO
(15 participants).
Conceptual Frameworks
The term “informality” is often used in urban studies and developmental economics but – as also
demonstrated in this paper – have expanded to other arenas. Informality is difficult to define and this
paper will not make attempt to define it. The economic literature often defines informality market-
based and “legal-production” of goods and services that is “hidden” from public authorities for various
reasons, in other words, a “shadow” economy. 2 A World Bank publication define it as “…activities that,
2
Friedrich Schneider, Andreas Buehn and Claudio E Montenegro, ‘New Estimates for the Shadow
Economies All over the World’ (2010) 24 International Economic Journal 443.

if recorded, would contribute to GDP, and does not cover illegal activities or household production”. 3
This definition is too narrow for the purpose of this paper as it would exclude illegal artisanal gold
mining activities or illegal water tenure arrangements.
Zizek defined “informal rules” as a set of meta-rules: “To know the habits of a society is to know the
meta-rules of how to apply its explicit norms: when to use them or not use them; when to violate them;
when not to use a choice which is offered…” 4 Meta-rules are of course a part of informality, however,
this definition is too narrow, as it would exclude informalities which may be expressed in some written
rules, such as archaic land tenures in the form of girik or verponding.
Polese offered another definition: “…individual or a group of individuals (organization, family, clan),
that eventually bypasses the state or the overarching entity regulating the life of that group or
society…” 5 This definition rests on the assumptions that informality emerge in areas where state
regulation have failed or is ineffective. In the case of CB-Watsan, it is true that Community-Based
Water and Sanitation Services initially emerges as donor initiatives in remote villages outside of the
reach of regional drinking water utilities (PDAM). This is also true in the case of ASGM where
community gold mining exist in remote areas where government enforcement is difficult or impossible
and also in the case of Water for the Poor where drinking water utilities typically refrain from servicing
urban slum due to various reasons. However, CB-Watsan was later incorporated as a formal
government policy, for example through the PAMSIMAS 6 (Community-Based Drinking Water
Provision) program; as such, it is no longer really the case of “beyond the state” albeit some
governance arrangement remains informal.
Chiodelli and Moroni caution from treating the problem in a clear-cut dichotomy as the “…treshold
between legal and illegal, formal and informal often elastic and mobile. 7 They are parts of a single
interconnected system…”. In the words of Samson 8, the formal and informal are “innerrelated” and
mutually constituted, the informal is not always “outside the law”.
Water Tenure
The Food and Agricultural Organization define tenure as “The relationship, whether legally or
customarily defined, between people, as individuals or groups, with respect to [land/water
resources]” 9 The term “tenure” thus encompasses both state-created property rights, customary
water rights, indegenous water rights as well as other illegal use of water resources. Why is Tenure
important? As can be seen below, Tenure is strongly related to livelihood and fulfillment ot human
rights. There are many types of water tenures, but this paper will only discuss two types: customary
water tenure and impossible tenure (for drinking water).
3
Franziska Ohnsorge and Shu Yu, The Long Shadow of Informality: Challenges and Policies (World
Bank Publications 2022).
4
Slavoj Zizek, Violence (Picador 2008).
5
Abel Polese, ‘What Is Informality? (Mapping) “the Art of Bypassing the State” in Eurasian Spaces -
and Beyond’ (2021) 0 Eurasian Geography and Economics 1.
6
‘PAMSIMAS’ (Pamsimas) <https://pamsimas.pu.go.id/> accessed 5 May 2022.
7
Francesco Chiodelli and Stefano Moroni, ‘The Complex Nexus between Informality and the Law:
Reconsidering Unauthorised Settlements in Light of the Concept of Nomotropism’ (2014) 51 Geoforum
161.
8
Melanie Samson, ‘The Social Uses of the Law at a Soweto Garbage Dump: Reclaiming the Law and
the State in the Informal Economy’ (2017) 65 Current Sociology 222.
9
Stephen Hodgson, ‘Exploring the Concept of Water Tenure’ (FAO) Land and Water Discussion Paper
10.

Customary Water Tenure
Some tenure, such as Customary water tenure in the Kahayan Catchment, Central Kalimantan (see
table below) are strongly linked with livelihood and environmental protection. Although they are
practiced and live among the communities (to some extent), they are not recognized by law.

Table 1: Customary Water Tenure in the Kahayan Catchment, Central Kalimantan
(Developed from Lubis 10, Satia 11, Subahani 12, Octora 13 and Al’Afghani 14)
Lexicon Explanation
Handil According to Lubis, it is used to denote three things, depending on its context: “a) a
manmade navigable canal connecting a river to farmland; b) fields around the canal
under collective management; c) the system of collective management of the fields
and canals”. Handil (in the context of a) is under collective ownership; are more
than 2 meters width and depth and is usually named after the site or the river.
Tatas manmade channels (approximately 1 × 1 m), dug to give access to forest resources
(Lubis, et.al). Anyone can build a new tatas, extending on existing ones. Tatas are
usually named according to the name of the person who built the main tatas.
Owners of the tatas are entitled to levy (cok) some percentage of the value of the
forest product that is carried through their tatas. The cok fees for logs, according to
Lubis, is 10%, whereas for other products my vary, depending on the location or the
owner’s policy. 15 tatas are controlled by either individuals or families. Owners of
the tatas and their family is allowed to extract resources around the tatas, usually
up to 500 meters on both sides of the tatas. 16 Anyone can branch off an existing
tatas and build new ones. After the EMRP build canals, new tatas are built by
extending on the canals, thereby giving more access into the depth of the forest. 17
Beje Manmade small pond in the swamp area. Beje, 25-250 meter square artificial pond
were often dug by farmersm oftentimes inside the peatland; fish will naturally seek
for location with plenty of water during dry season, and thus they gather in Beje,
which is then harvested by Farmers.
Only the owners/person who constructed the Beje is allowed to harvest fish in the
Beje. The claim to the Beje can be inherited or transferred. However, recently the
swamp dried out too fast, making the Beje less functional. 18
Tabat Overflow dam, usually made of clay or wood
10
Zulkifli B Lubis, Social Mapping of Access to Peat Swamp Forest and Peatland Resources
(Indonesia-Australia Forest Carbon Partnership 2013).
11
Riban Satia and others, Pukung Pahewan Kearifan Lokal Suku Dayak Untuk Dunia (2nd edn, Diva
Press 2019).
12
Edy Subahani, ‘Melihat Kembali Konsep Handil Dan Sistem Pengelolaanya’ (Walhi Kalteng 2010)
<https://www.academia.edu/5874178/Melihat_Kembali_Konsep_Handil_dan_Sistem_Pengelolaanya
> accessed 24 December 2021.
13
‘Kearifan Lokal Dalam Pengelolaan Sumberdaya Alam Di Kawasan Eks PLG’ (Walhi dan Kemitraan
2010)
<https://www.academia.edu/5874095/Kearifan_Lokal_Dalam_Pengelolaan_Sumberdaya_Alam_Di_
Kawasan_Eks_PLG> accessed 24 December 2021.
14
Mohammad Mova AlAfghani, ‘Scoping Study on Water Tenure in Indonesia’ (FAO 2022).
15
Lubis (n 10).
16
ibid.
17
ibid.
18
Subahani (n 12).

Baruh Small pond in Peatland which is filled with water all year long, usually formed due
to large trees which are uprooted. Fishing in the Baruh (Ngebaruhi) is also
considered a free access. 19
Saka Third order tributaries, usually a short and narrow creek. Satia et.al. notes that the
owner of saka and Sungei can manage and supervise anyone conducting activities in
their area. Other people can fish in the sungai only when they are connected by
marriage to the owner of the sungai/saka. 20
Pukung Protected area. According to Satia,et.al, the area is considered to be controlled by

Pahewan mythological creatures which guards the area from destruction. According to
custom, not only the forest or the trees are protected, but also all animals, plants
and other being within the protected zone. Pukung is a certain designated area
whereas Pahewan also has a broad meaning which could mean anything from
sacred trees, protected forst, river, lakes, etc. With such broad meaning, certain
water bodies or water resources such as lakes or river-banks can also be designated
as Pukung Pahewan
It is important to note that most of the customary water tenure above especially those relating to
water bodies may not be recognized as “customary water law” under the Water Law. The water law
impose a “rule of recognition” that has to be met, namely 21: (a) traditional society, (b) territoriality –
specific claim to land (c) the relationship between community and their lands, including the utilization
of the Ulayat land, management and control as valid and complied by the community.
As noted by Van Dijk 22 (and supported by Lubis 23), the territorial claim is based on a certain claim on
a a certain teritory and justified by legal, moral or political reason. This is absent on the vast Borneo
peatland where people simply did not have access and/or was not able to maintain control over them.
Indeed, the general rule on peatland is considered by Lubis as “open access” (somewhat a res
communis), until someone maintain an effective control over certain area as evidence by their efforts
in working on that peatland area. 24 The consequences of this is that the rule of recognition in Water
Law is not applicable to customary water tenure in Peatland. Thus, despite the fact that those
customary tenure lives and developed into institutions, they are not recognized by the state.
Al’Afghani also notes that the rule of recognition on Water Law is “biased” towards land tenure.
Impossible or assumed (drinking) water tenure
The majority of Indonesian drinking water is supplied through either self-supply (household level
water extraction predominantly from wells) or community-based system. The community-based
system can supply one or more villages or several hundred people per system. The PAMSIMAS
program (a community based water supply program from the Ministry of Public Works) have supplied
19
Lubis (n 10).
20
Satia and others (n 11).
21
Undang-Undang Republik Indonesia Nomor 17 Tahun 2019 Tentang Sumber Daya Air. Elucidation
of Article 9 (3). Note that some people may argue that elucidation may not be binding as the actual
clause, as they only provide explanation
22
Han van Dijk, ‘Land Tenure, Territoriality and Ecological Instability: A Sahelian Case Study’ [1996]
The role of law in natural resource management, 17 - 45 (1996).
23
Lubis (n 10).
24
ibid.

around 23,57 million people in 33 provinces, 408 regency/city, and more than 35.000 vilages across
Indonesia. 25 These systems are managed by community-based organization (CBO). Despite their
importance in delivering human right to water, their water tenure however, is not clear.
As the CBO use water for a large number of people, they cannot utilize de-minimis rights
(license/aproval free right) under Article 8 of the Water Law, as this type of use is limited to household
and individual uses. One possibility is to use Article 45 which permits abstraction of non-commercial
water use. However, due to some political economy rationale which is beyond the scope of this
paper 26, Article 50 of the Water Reources Law restrict water abstraction for drinking water purpose
to state, regional and owned village enterprises. The majority of CBO however, are constituted as
Perkumpulan (Unincorporated Association). 27 Article 50 can be interpreted as an specific rule (lex
specialis) of Article 45. In other words, Article 45 regulates that water can be abstracted for a large
number of people (for example, for irrigation), however, if the purpose is for drinking water, then
article 50 applies: only state/regional/village owned enterprise is allowed. Conversion of CBOs into
village owned enterprise is currently being envisaged by the government, but it entails complexities
and there are resistance from the communities. 28
Table 2: Article 45 and Article 50 of the Water Law

(Source: Al’Afghani, FAO, 2022)
Article 45 (1) Article 50

Permit* to utilize water resources for non Permit to utilize water resources for
commercial activities which consist of (a) commercial purpose by utilizing water and
utilization permit is required if water resources as materials….whose product
1. Its utilization alters the natural is drinking water for daily basic needs are
condition of water source provided to state owned enterprise, region
owned enterprise or village owned enterprise
2. Its utilization is for group of people which drinking water
requiring water for large amount
(*) Under UU Cipta Kerja, the term used for non-commercial purpose is “approvals”.
25
‘Air Minum Dan Sanitasi Jadi Kebutuhan Warga, Menteri PUPR Tekankan Fungsi Pentingnya
Kurangi Kemiskinan Dan Stunting’ (Kementerian PUPR) <https://www.pu.go.id/berita/air-minum-
dan-sanitasi-jadi-kebutuhan-warga-menteri-pupr-tekankan-fungsi-pentingnya-kurangi-kemiskinan-
dan-stunting> accessed 7 May 2022.
26
Mohamad Mova Al’Afghani, ‘Alienating the Private Sector: Implications of the Invalidation of the
Water Law by the Indonesian Constitutional Court’ 26 Journal of Water Law 12.
27
Mohamad Mova Al’Afghani and others, ‘The Role of Regulatory Frameworks in Ensuring The
Sustainability of Community Based Water And Sanitation. Australia Indonesia Research Award
(AIIRA) Research Report.’ (Indonesia Infrastructure Initiative (INDII) 2015) <https://crpg.info/41-
aiira> accessed 22 September 2017.
28
ibid.

Table 3 below, listed a number of possibilities for CBOs to access water. Notwithstanding the Article
50 problem. If Article 50 is ignored, CBO can have access if they are set-up as incorporated association,
foundation and village owned enterprises. Neverteheless, Al’Afghani et.al has demonstrated that the
majority of CBOs in Indonesia are unincorporated. 29 Furthermore, even if CBOs are incorporated as
village owned enterprises (BUMDes), the prerequisite is very cumbersome. Even the general
prerequisite for water resources licensing require some environmental documents, commercial
license, technical recommendations and feasibility study. 30 Existing regulation is also unclear with
respect to the type of license that a village owned enterprise must apply. 31 To conclude, the drinking
water tenure of millions of population in Indonesia is not secured. These tenures are very weak (and
borderline illegal) and can easily be trumped by other commercial license-based tenure 32 used by
corporations and industry.
Table 3: Possible Tenure Typology for Community-Based Drinking Water
(Source: Al’Afghani and Bisariyadi, 2022) 33
No. Entity Permit Tenure

1. Unincorporated Not a legal entity, cannot obtain Informal
association/Perkumpulan permit
(set up under Art 1654 of
the Civil Code
2. Incorporated Yes: Possibly through article 45, Permit

association/Perkumpulan notwithstanding the above (formal
Berbadan Hukum) set up problematique concerning Article 50. tenure)
under STB 1870 No.64 Permit type: approval
No Informal
3. Foundation/Yayasan (Set Yes: Possibly through article 45, Permit

up under Law 16/2001) notwithstanding the above (formal
problematique concerning Article 50. tenure)
Permit type: approval
No: Informal
4. Cooperatives/Koperasi Yes: Not possible using article 45 ?
(Set up under Law since article 45 is designated only for
25/1992) “non-commercial” activities whereas
29
Mohamad Mova Al’Afghani, J Kohlitz and J Willetts, ‘Not Built to Last: Improving Legal and
Institutional Arrangements for Community-Based Water and Sanitation Service Delivery in Indonesia’
(2019) 12 Water Alternatives 19.
30
Peraturan Menteri Pekerjaan Umum Dan Perumahan Rakyat Republik Indonesia Nomor 6 Tahun
2021 Tentang Standar Kegiatan Usaha Dan Produk Pada Penyelenggaraan Perizinan Berusaha Berbasis
Risiko Sektor Pekerjaan Umum Dan Perumahan Rakyat. See Attachment 2
31
ibid.
32
Usually in the form of Surat Izin Pengambilan Air (water abstraction license), Surat Izin Pengambilan
Air Tanah (groundwater abstraction license) and Surat Izin Pengambilan Mata Air (spring water
abstraction license)
33
Mohamad Mova Al’Afghani and B Bisariyadi, ‘Ada Celah Hukum Yang Terselubung: Problematika
Regulasi Peran Swasta Dalam Pelayanan Air Minum (A Hidden Legal Loophole: The Problematique
of Regulating Private Sector’s Participation in Indonesia’s Drinking Water Service)’ (Social Science
Research Network 2021) SSRN Scholarly Paper ID 3996774
<https://papers.ssrn.com/abstract=3996774> accessed 15 January 2022. See also ibid.

cooperative is a commercial body.

Similar problem with Article 50
No Informal
5. Village owned enterprise / Yes: Article 50. Permit type: Permit

Badan Usaha Milik Desa Commercial Permit for Drinking (formal
(Set up under Law 6/2014 Water tenure)
on Villages and GR No Assumed
11/2021 on Village Owned
Enteprise)
Illegal Groundwater Tenure
Another type of tenure encountered on the research is illegal tenure. The Rejoso Catchment in Eastern
Jawa lies on volcanic aquifers. 34 The topography allows for the formation of self-flowing artesian
wells. 35 The conversion of land-use from sugarcane plantation to ricefields triggered farmers to
construct new artesian wells in order to irrigate their paddy fields – especially since irigation
infrastructure is lacking. 36
The number of illegal wells being constructed amounts to several hundreds and interview with a
resource person revealed that around 1-2 new wells are being constructed every week (see picture
below). 37 In the sub district of Gondang Wetan and Winongan, Pasuruan, only 30% of water from these
wells are used, the rest are wasted, with a total amount of 48 million cubic meter being wasted
annually – only from those two sub-districts. 38 These groundwater abstraction – combined with
other factors have contributed to the decrease of spring discharge up to 30%. 39 The Umbulan
spring, which supplies water to Surabaya and other cities have decreased from around 5000 liter
pre second (lps) in the 1980s to just 3500 lps in 2019. 40 It is feared that if this practice continues, there
will not be enough water to supply thirsty Surabaya and neighboring cities.
34
Alix Toulier, ‘Multidisciplinary Study for the Characterization of Volcanic Aquifers Hydrogeological
Functioning: Case of Bromo-Tengger Volcano (East Java, Indonesia)’ (PhD Thesis, Université
Montpellier 2019).
35
This means that once the aquifer is drilled, the pressure caused water to move from below ground to
the surface without additional intervention. The wells can cease to flow or only flow with very low
pressure after some years, or it can flow indefinetely.
36
Ni’matul Khasanah and others, ‘Groundwater-Extracting Rice Production in the Rejoso Watershed
(Indonesia) Reducing Urban Water Availability: Characterisation and Intervention Priorities’ (2021) 10
Land 586.
37
AlAfghani (n 14).
38
Heru Hendrayana and others, ‘Unregistered Artesian Well Management in Pasuruan, Indonesia: An
Attempt to Protect Groundwater Resources’ [2021] Indonesian Journal of Geography
<https://journal.ugm.ac.id/ijg/article/view/68185> accessed 6 January 2022.
39
Khasanah and others (n 36).
40
Toulier (n 34).

Figure 1. Unregistered Artesian Well in Gondang Wetan and Winongan Sub-

Districts. Source: Hendrayana, et.al, 2021 41
The illegality of the wells can be subjected to technical legal debate. The Water Law permits license-
free entitlement, up to 2 liter per second per household for irrigation. 42 It does not distinguish
between ground or surface water. Existing regulatory framework also does not prescribe specific
requirements for self-flowing artesian wells. However, since this practice have caused depletion of
water debit, threatens drinking water supply and damage the aquifer, it can be said that it contradicts
the Constitutional Court 6 basic principles of water governance 43 and is thus illegal. Numerous attempt
have been conducted in order to regulate the flow by installing valves and other measures on the
wells, as well as asking community to stop drilling new wells, however, community resistance is high
and some of the installations were even destroyed. 44 This type of tenure therefore, albeit socially
legitimate, should not be reconciled with the legal system as it is inefficient.
41
Hendrayana and others (n 38).
42
Undang-Undang Republik Indonesia Nomor 17 Tahun 2019 Tentang Sumber Daya Air. Elucidation
of Article 8
43
Putusan Mahkamah Konstitusi Nomor 85/PUU-XI/2013 Tentang Pengujuan Undang Undang Nomor
7 Tahun 2004 Tentang Sumber Daya Air.
44
AlAfghani (n 14).
10

Community Based Water Services
While the discussion on drinking water tenure above looks at how Community-Based Organizations
(CBO) accesses their water resources, this section will look into the governance of water services
delivered by CBOs. Unlike drinking water utilities (Perusahaan Daerah Air Minum or PDAM) in cities,
water services delivered by CBOs are different, in that the former are very informal.
GR 122 (and recent policy framework) constitute an improvement on the recognition of water services
by CBOs, especially if compared by the 2003 policy 45 and 2005 46 Government Regulation.
Started to
Emphasis on recognize More recognition on
informality "community community groups,
2003 GR GR
and groups", but clarify the role of
Policy 16/2005 122/2015
community government village and
ownership role is not regency/city govt
stipulated
Figure 2: Growing recognition of Community-Based Water Service
Despite this, Al’Afghani et.al 47 notes that there remains various shortcomings in the governance
framework of community based water services, namely, (i) the absence of legal personality, (ii) the
lack of service standard, (iii) lack of assets security, (iv) financial insecurities and (v) lack of post-
construction supports from government. Out of 19 CBOs we surveyed in East Nusa Tenggara, Eastern
Java and Sulawesi 48, only one is established as a cooperatives, while the rest are “unincorporated
association”. This brings implications on their water tenure (see Table 3 above).
Different from urban drinking water utilities, community-based water services lacks a defined service
standard and complaint mechanisms. Thus, unlike “modern” bureaucracy which are “impersonal” 49,
these services are highly personal and informal. Complaint (for repairs, etc) may depend on the
personal proximity with CBO officers. 50 Their assets security are also unclear. None of the CBOs we
encounter on our study can demonstrate clear relationship between their land and water
infrastructure assets and their legal entity. 51 Indeed, some of technical and donor manuals we review
does not stipulate the requirement of land tenure security for water services CBO. 52 CBOs are facing
financial difficulties, especially for financing major repairs. Furthermore, CBOs all complained that
45
Bappenas and others, ‘National Policy for the Development of Community Based Water And
Sanitation’ (2003).
46
Peraturan Pemerintah No. 16 Tahun 2005 Tentang Pengembangan Sistem Penyediaan Air Minum
2005.
47
Al’Afghani, Kohlitz and Willetts (n 29).
48
ibid.
49
See for example, Julie Langer, ‘Bureaucracy and the Imaginal Realm: Max Weber, Rationality and
the Substantive Basis of Public Administration’ [2022] Perspectives on Public Management and
Governance; Chen H Chung, Jon M Shepard and Marc J Dollinger, ‘Max Weber Revisited: Some
Lessons from East Asian Capitalistic Development’ (1989) 6 Asia Pacific Journal of Management 307.
50
Al’Afghani and others (n 27).
51
ibid.
52
Al’Afghani, Kohlitz and Willetts (n 29).
11

when something happens with their infrastructure, there was no clarity on which government agency
is responsible for helping them. 53
The CBO “elites” we interviewed are not motivated by commercial motives. CBO chiefs usually have
their own day-jobs (mostly, as teachers) which secure their income stream. They are motivated by
external and community recognition of their work, which accords them special status in their village. 54
One village head commented:
“… the project advisors asked me: Do you sister have any other activies? I said of course. Are you not
sorry joining this? I said God Willing, No. From the beginning, my intention is for Ibadah. [At the
beginning was difficult] we faced tough challenges and skepticism from the community.. )
Meanwhile, a CBO chief commented:
“I never calculate [remuneration], never. [As a consequence] good fortune will follow. I work on it based
on ikhlas (whole-heartedly because of God). If I don’t have anything in return, [God] will replace it with
something. That’s all, it is very simple.” 55
Furthermore, our research revealed that central, dominant authoritative figures are important for CBO’s
survival. Surviving CBOs are usually led by a strong leader who takes the CBO over the its formative years
facing community skepticism, but is now proud of their successes. CBOs with weak leadership usually
cease to function after several years. CBO chief usually leads the CBO for a long time, without being
replaced. Community based water services is thus, an informal service. Their governance culture is
patrimonial and their organizational culture is hierarchial. Nevertheless, this combination of institutional
set-up seemed to work in some cases.
Water Services in the Urban Slum
The urban slum is topographically difficult and financially inattractive to water utilities. Insecure land
tenure meant that water utilities face a threat of lawsuit from the “valid” landowner and that the
assets which has been constructed on the site are insecure as it can be dismantled by a Court order. 56
In addition, serving poor communities in the urban slum would mean that the tariff base is low and
that there could be risk of non-payment. 57 This have resulted in informal service provision through
water vendors (which charge inexorbitant prices) as well as supplies through water kiosk, master
meter and hidrant.
One of the ways for addressing this is by “formalizing” these service typologies. At the national level,
the drinking water regulation (GR 122) 58 have recognized water kiosk and hidrants. Jakarta goes even
further by recognizing, in addition to the aforementioned, provision by master meter and introduced
53
Al’Afghani and others (n 27).
54
ibid.
55
Ibid
56
Mohamad Mova Al’Afghani and Nishrin Azzely Qowamuna, ‘Regulasi dan Kebijakan Terkait
dengan Penyediaan Air Minum Bagi Masyarakat B40 di Perkotaan’ (CRPG 2021)
<https://crpg.info/wp-content/uploads/2021/09/Regulasi-dan-Kebijakan-Terkait-dengan-Penargetan-
Masyarakat-B40.pdf>.
57
ibid 40.
58
Peraturan Pemerintah Republik Indonesia Nomor 122 Tahun 2015 Tentang Sistem Penyediaan Air
Minum.
12

a special connection service (Sambungan Langsung Khusus or SLK). 59 This innovative measures require
strong political will and adequate financial resources. 60 The comparison between the service typology
is presented in the table below.
Table 4: Service Typoloy in Jakarta
No. Service Typology Jakarta National

Pergub 16 GR 122
1. Master Meter X
2. Water Kiosk/ (Water Terminal) X X
3. Hidrant X X
4. Special Connection X
In most Indonesian urban areas, it will be difficult to obtain direct household connection from water
utilities due to the reasons mentioned earlier. Thus urban slum communities have to depend on
master meter, hidrant and water kiosk. However, Jakarta introduced a special connection service and
lowers the barrier of entry in obtaining water services. The table below outlines the differences on the
prerequisites between a normal connection and special connection.
Tabel 5: Prerequisites for water connection
1. Normal Connection Special Connection

Application letter Application letter
Copy of Jakarta ID card (KTP) or Copy of Jakarta ID card (KTP)
Domicile letter
Copy of Family Card Copy of Family Card
Copy or receipt of land and
building tax payment
Copy of land ownership/land
utilization
Signed customer contract Signed customer contract
Special connection is prioritized over other service typology since the other suffers weaknesses (higher
prices or unreliable service). According to a resource person, as of 2019, 15,000 are targetted to be
connected. 61 As can be seen in the table above, communities in the urban slum no longer require to
prove their land ownership. Thus, they will be entitled for water services irrespective or their land
tenure. Nevertheless, they are still required to prove the evidence of Jakarta citizenship through their
IDE card. This means that migrant workers from other areas will still face difficulty in accessing water
through special connection.
59
Peraturan Gubernur Daerah Khusus Ibukota Jakarta Nomor 16 Tahun 2020 Tentang Tatacara
Penyambungan Dan Pemakaian Air Minum.
60
‘Financial Statistics of Province Government 2018-2021’ (BPS 2021)
<https://www.bps.go.id/publication/download.html?nrbvfeve=MzlhMGI2YjJmNGViYmUwZDE4OD
NlNmVi&xzmn=aHR0cHM6Ly93d3cuYnBzLmdvLmlkL3B1YmxpY2F0aW9uLzIwMjEvMTIvMjE
vMzlhMGI2YjJmNGViYmUwZDE4ODNlNmViL3N0YXRpc3Rpay1rZXVhbmdhbi1wZW1lcmlud
GFoLXByb3ZpbnNpLTIwMTgtMjAyMS5odG1s&twoadfnoarfeauf=MjAyMi0wNS0xMyAxMTozN
zoyNg%3D%3D> accessed 13 May 2022.
61
Al’Afghani and Qowamuna (n 56) 40.
13

It is also found that further regulatory intervention by the national government would be required in
order to reconcile informalities in the urban water sector. Household in the urban slum sits on the
lower tariff band. 62 Although cross-subsidization through tariff has been implemented (those who
pays higher tariff cross subsidizes lower tariff), this is still a disincentive for the utilities, as it would
mean that the more urban poor are connected, the more the general tariff base would become
lower. 63 We found that existing subsidy 64 overall scheme – which will allow drinking water utilities to
subsidized if it falls below full cost recovery – to be ineffective and has been rarely applied by regions,
because most of the disincentives remain. As such, we propose that a direct subsidy mechanism be
implemented in order to reduce the disincentives. 65
Another example deals with the risk of serving to places with illegal land tenure. The first risk deals
with the infrastructure that has been built by utilities. If a Court decide that the land legally belongs
to a third party and the third party refuse the infrastructure, drinking water utilities are faced with
two different kinds of risk: the lost of customer base (as they are evicted) and the loss of built
infrastructure (they have to be dismantled). Again, we propose that the state (or provincial
government) will need to assume these risks. 66
Artisanal Gold Mining
The problem with ASGM and mercury
Artisanal Gold Mining (ASGM) activities are often conducted in the shades beyond state control. As
such, ASGM are oftentimes problematic for a number of reasons 67: (i) lack of technical oversight which
cause hazard on miners, usually in the form of landslides; 68 (ii) conflicts among miners which often
lead to violence, (iii) corruption and bribery involving officials and law enforcement, (iv) loss of state
income due to non-payment of tax, (v) criminal and negative social consequences and (vi) use of
mercury which is toxic to the environment and human health.
It is estimated that around 300,000 small-scale miners depend on gold mining activities for a
living. Mercury is used to separate gold from ore and has been used since the 90s, but has
actually been well known in the past 15-20 years. 69 In the last 10 years, the number of ASGM
in Indonesia has expanded to 27 provinces including protected areas, national parks, and
grand forest 70. Despite Indonesia’s membership in the Minamata Convention 71, it is
62
‘Tarif Air Minum’ <https://www.pamjaya.co.id/infopelanggan> accessed 13 May 2022.
63
Al’Afghani and Qowamuna (n 56).
64
Peraturan Menteri Dalam Negeri Republik Indonesia Nomor 70 Tahun 2016 Tentang Pedoman
Pemberian Subsidi Dari Pemerintah Daerah Kepada Badan Usaha Milik Daerah Penyelenggara Sistem
Penyediaan Air Minum.
65
Al’Afghani and Qowamuna (n 56).
66
ibid.
67
Mohammad Mova Al Afghani, ‘Output 3: Review of 13 Policies and Regulations and Field Report’
(UNDP 2020) 3.
68
‘12 Women Killed by Landslide in North Sumatra Illegal Gold Mine - Archipelago - The Jakarta
Post’ <https://www.thejakartapost.com/indonesia/2022/04/29/12-women-killed-by-landslide-in-north-
sumatra-illegal-gold-mine-.html> accessed 13 May 2022.
69
UNEP 2013
https://wedocs.unep.org/bitstream/handle/20.500.11822/11708/FinalReportNarrative_June2014.pdf?sequence=1&isAllowed=y
70
KLHK, 2013, Penghapusan Penggunaan Merkuri Pada Pengolahan Emas.
71
Undang-Undang Republik Indonesia Nomor 11 Tahun 2017 Tentang Pengesahan Minamata
Convention on Mercury (konvensi Minamata Mengenai Merkuri).
14

estimated that 380,000 kg of mercury per year is emitted in Indonesia in which ASGM sector
has been found to be the major source. 72 The health implications has dire, ranging from
neurological diseases 73 such as tremor to ataxia, sleep disturbances, thousands of birth
defects and brain damages. 74 Some of mercury also find its way into rice 75 and fish. 76
Formalization is thought to be able to reduce the negative impact of mining and, through
government supervision and fostering, would be able to phase-out the use of mercury.
An UNITAR handbook define “formalization” and distinguish it from “legalization”.
Formalization is “A process that ensures that ASGM actors are licensed and organized in
representative entities that represent their needs; policies are implemented, monitored, and enforced;
and ASGM actors receive technical, administrative, and financial support that empowers them to
adhere to requirements prescribed by national regulations.” 77 Whereas, legalization is defined as “A
process that ensures that ASGM actors possess the licenses and permits required by national law”. 78
Legalization is only one step towards formalization. This is evident from our field study in 6 provinces.
One of the village head in Kulonprogo commented: “…we should be provided with regulation, facility,
but we also need a lot of mentorship (pendampingan). For example, mining operation will require KTT
(Chief Mine Technical Officer), we don’t have the human resources available locally. Yes, license will be
granted, equipment, but what about management? Human resources here is limited, without
mentoring, such activities will only produce conflict. Our opinion is that if the government wants to
help us they must do it wholeheartedly.” 79 Indeed this was provided by through the GOLD-ISMIA
project which was funded by GEF. 80 However, replication of this effort to other regions means that
provincial or national government will have to contribute considerable financial resources – this could
be a challenge.
One of the primary obstacles for formalization was the technical restrictions in the form of, among
other, maximum depth for people’s mining, which was 25 meters. 81 Almost every miner I interviewed
in 2019, except for those mining in riverside (they don’t require deep tunnels), objected to the
maximum 25 meter requirements. One miner in Gorontalo commented: “The depth of my shaft is now
72
Balifokus, 2018, “Illegal and illicit mercury trade in Indonesia”
https://docs.wixstatic.com/ugd/13eb5b_f0dd64cbceda413e8c3dbb3943e1975f.pdf
73
Stephan Bose-O’Reilly and others, ‘A Preliminary Study on Health Effects in Villagers Exposed to
Mercury in a Small-Scale Artisanal Gold Mining Area in Indonesia’ (2016) 149 Environmental
Research 274.
74
Richard C Paddock, ‘The Hidden Cost of Gold: Birth Defects and Brain Damage’ The New York
Times (9 November 2019) <https://www.nytimes.com/2019/11/09/world/asia/indonesia-mercury-
pollution-gold-mining.html> accessed 13 May 2022.
75
Baiq Dewi Krisnayanti and others, ‘Assessment of Environmental Mercury Discharge at a Four-Year-
Old Artisanal Gold Mining Area on Lombok Island, Indonesia’ (2012) 14 Journal of Environmental
Monitoring 2598.
76
Zuleica C Castilhos and others, ‘Mercury Contamination in Fish from Gold Mining Areas in
Indonesia and Human Health Risk Assessment’ (2006) 368 Science of The Total Environment 320.
77
Jorden de Haan and Branden Turner, Handbook: Developing National ASGM Formalization
Strategies within National Action Plans (UNITAR and UN Environment 2018)
<https://www.unitar.org/cwm/sites/unitar.org.cwm/files/uploads/formalization_handbook_e_web_fina
l.pdf> accessed 8 September 2019.
78
ibid.
79
Al Afghani (n 67) 3.
80
‘Laporan Proyek Akhir Tahun 2021.Pdf’ (UNDP) <https://goldismia.org/sites/default/files/2022-
03/Laporan%20Proyek%20Akhir%20Tahun%202021.pdf> accessed 13 May 2022.
81
Undang Undang Nomor 4 Tahun 2009 Tentang Pertambangan Mineral dan Batu Bara 2009. See
Article 22
15

more than 100 meters. At 25 meters we will have no income because at 25 meters it’s still clay”.
Another miner in Minahasa Utara commented: “...at 25 meters here, we are still playing around, which
means it will only reach the outer layer…”. The 25-meter problem is now solved, since amendment to
the mining law (issued in 2020) permit maximum depth of 100 meter and the width of people’s mining
area of 100 hectares. 82
Nevertheless, informalities persist as deeper shaft will require more powerful pumps (for water and
fresh air). At the moment, the maximum 25 horse-power requirement imposed to pumps as well as
the prohibition in utilizing heavy equipment persist under GR 23/2010 and have not been revoked. 83
This may further hinder the reach of the state towards illegal mining to some extent and weakens
supervision efforts. The case study in Village X 84, is interesting in this respect.
The level of “institutionalization” in Village X, sites is greater than the sites. This is evident in some
respect, for example, in the phasing-out of mercury in most (but not all) of the ASGM value chain.
Mercury is still used, to a small extent, for examining soil sample (to know whether it contain gold)
and to separate gold from residue in claypot. This is a much better condition compared to other case
study area where Mercury is still used in the main treatment units. This is because miners realize by
themselves that using alternative treatments such as cyanide is more economical than mercury.
Another example is that informalities produced “rules” which miners must obey and respect. Before
this, there were major conflict among miners Village X. One of the rules is for miners to obey land
boundaries. If excavation overlaps where miners meet other miners below ground, then it shall be
settled onsite or at the village level. Miners are often reluctant to go to the police if dispute occurs
among them since police may try to pursue other illegalities and will further add to their problem.
Instead, they try to settle their disputes internally:
“If we go directly to the police [to settle our dispute], it would not be beneficial to us, so maybe we
have problem A, they [the authorities] will try to pursue and frame it as Problem B, for example
pertaining maximum depth, or through for example, subsidized fuel, or through maximum horse-
power for pumps, so there are may factors, which is why, I said to my colleagues that all problems shall
be settled locally [and not be brought to authorities]”
In another province, Village Y (which has the lowest institutionalization that I observe if compared to
other sites), miners illustrate their relationship with law enforcement. One village elder told us:
“Almost each year the vilagers here take turns going to prison. Even the regent told, from hundreds
of inmates, the majority comes from this village”
Another miner added:
“Once they are in prison, they will suffer, their parents go to jail, their kids drop out from school…
Some mothers has to sell cakes from door to door, the elder child drop out from school to work at
restaurant to support the family [because their father is jailed].”
82
Undang-Undang Republik Idonesia Nomor 3 Tahun 2020 Tentang Perubahan Atas Undang-Undang
Nomor 4 Tahun 2009 Tentang Pertambangan Mineral Dan Batubara. See amendment of Article 20
83
Peraturan Pemerintah Nomor 23 Tahun 2010 Tentang Pelaksanaan Kegiatan Usaha Pertambangan
Mineral dan Batubara. See Article 48
84
Village X is one of the case studies on the 6 provinces. The actual name village name is withheld in
order to provide plausible deniability for the respondent
16

The relationship between village regulation and ASGM can also be illustrated by this response from
the head of Village Z, in one of the provinces used as case study:
“Because this is illegal, we don’t dare to make rules. We have calculated that”
Jakarta Eviction
Situation in which the state is complicit in the informalization of certain tenure is demonstrated by
Shatkin and Soemarwi’s (2021) 85 analysis of the eviction of kampung residence alongside the Ciliwung
riverbank in Jakarta for flood control purpose. In essence, the authors argued that the evictees tenure
is not per se “illegal”, instead, they have autochthonous claims in the form of hak girik, hak garapan
and Verponding Indonesia all of which are -- according to the authors – property rights recognized by
the Dutch Colonial government. 86 The problem comes after the Basic Agrarian Law (BAL) reformed
land tenure and require the conversion of existing rights into a set of predefined land rights 87, with
hak milik being the strongest. What the BAL did, they argued, weakens and deligitimizes
autochthonous claims. Furthermore, Government Regulation in lieu of Law 51/60 provides criminal
sanctions for illlegal land occupation and empower local government to evict the “occupier”. 88
Indeed, none of the 5 Court cases related to the Bukit Duri and Kampung Pulo evictions strengthened
the position of autochthonous land tenure. For example, the government responded the claimant in
205/G/2016/PTUN-JKT T with the following: “If it is true that [they] own the land, why don’t they certify
their land ownership [convert to Hak Milik], they only provide receipt on sealed paper and rent book…”
“…paying tax is no proof of ownership…...” “the sale and purchase letter is only made on a receipt and
sealed paper signed by previous owner and buyer without legalisation from authorities [notary]…”. 89
Interestingly, in 262/Pdt.G/2016/PN.Jkt.Pst and its subsequent appeal, the Court granted
compensation to evictees. This was a tort (Perbuatan Melawan Hukum) case and thus injuries have to
be qualified as such. The claimant claimed injury resulting from the eviction, procedural reasons (lack
of consultation) and the constitutional protection on “property”. It is not really clear which one of
these claims pursuaded the Court, but a compensation was granted in the end and was upheld in the
appeal court. 90
The evictees also brought the case to the Constitutional Court through Case and petition for the
invalidation of Gov Reg In Lieu of Law 51/PrP/1960, which as discussed, provided the legal basis for
eviction. The claimant argues that BAL does not seek to abolish autochthonous tenure, and as such,
Law 51/PrP/1960 provide executive authority which superseded the judicial authority.
In other words, claimants argue that since autochthonous tenure are “legal rights”, dispute concerning
them should be brought into Court which then will decide what to do, the government cannot just
85
Shatkin and Soemarwi (n 1).
86
ibid.
87
Undang-Undang Nomor 5 Tahun 1960 Tentang Peraturan Dasar Pokok-Pokok Agraria.
88
Peraturan Pemerintah Pengganti Undang-Undang Nomor 51 Tahun 1960 Tentang Larangan
Pemakaian Tanah Tanpa Izin Yang Berhak Atau Kuasanya. See Article 7 for criminal sanction and
Article 4 for eviction
89
Putusan PTUN JAKARTA Nomor 205/G/2016/PTUN-JKT Tanggal 5 Januari 2017 — 1 Masenah, 2
Sri Kencana, DKK;Kepala Satuan Polisi Pamong Praja Kota Administrasi Jakarta Selatan.
90
Putusan PT JAKARTA Nomor 192/PDT/2018/PTDKI Tanggal 28 Mei 2018 — KEMENTRIAN PU
dan PERUMAHAN RAKYAT CQ DIRJEND SUMBERDAYA AIR CQ KEPALA BALAI BESAR
WILAYAH SUNGAI CILIWUNG CISADANE (BWSCC) >< MASENAH DKK.
17

evict people (and expropriate land) 91 and this is contrary to the ideals of “Negara Hukum” which
recognizes check and balances and separation of power. 92 The Constitutional Court (CC) rebuke this
argument and said that the evictees can always sue in Court.93 Indeed they did. However, as discussed
earlier, none of the Court cases discussed above (262/Pdt.G/2016/PN.Jkt.Pst, 205/G/2016/PTUN-JKT
or 192/PDT/2018/PTDKI) recognize autochthonous tenure.
Of particular importance is what can we interpret with respect to the Court’s view on autochthonous
tenure. The CC said:
“…a contrario…claimants posited that, on the grounds of progress and in fighting for their rights
collectively then, occupiying land in which claimants has no rights, without permission from the valid
owner or their proxy should be considered constitutional. This sort of reasoning is cannot be
accepted…. It is true that the protection, advancement, enforcement and fulfillment of such [human]
rights are state responsibility. However, this does not provide legal legitimacy – or even constitutional
[legitimacy] to the state or community groups to take other people’s rights or other parties against the
law. “ 94
The CC did not directly said that autochthonous tenure such as verponding, girik or garapan as illegal
or cannot be recognized. Indeed, the status of autochthonous tenure was not really considered by the
CC in this case. However, a contrario, the CC implies that all those autochthonous tenure which has
been argued by the claimant throughout the Judicial Review as “no rights” and that the claimants are
not the “valid owner” and that the claimants “take other people’s rights”. We can all agree that taking
other people’s right is wrong. But the question here is what is considered as “right” and “valid owner”
in the first place? In this case, the CC does not distinguish between autochthonous tenure – in which
there are customary practices and some sort of cummunity level legitimacy – from outright land
squatting. We can also perceive that the CC’s perception of rights and validity leans very much to state
created “formal” rights under BAL. This is despite the fact that creation of those property rights are
prone to capture right from the planning stage. 95 I shall close this section with a quote from Roberto
Unger:
“The more equity is sacrificed to the logic of rules, the greater the distance between official law and
the lay sentiment of right. As a result, the law loses its intelligibility as well as its legitimacy in the eyes
of the layman…” 96
91
Putusan Nomor 96_PUU-XIV_2016 96_PUU-XIV_2016 (Mahkamah Konstitusi). See in particular
page 28, para 63
92
ibid. See page 29 para 65
93
ibid. See page 279
94
ibid. Page 280
95
See for example TP Moeliono, ‘Spatial Management in Indonesia: From Planning to Implementation:
Cases from West Java and Bandung: A Socio-Legal Study’ (Van Vollenhoven Institute, Faculty of Law,
Leiden University 2011); Deden Rukmana, ‘The Change and Transformation of Indonesian Spatial
Planning after Suharto’s New Order Regime: The Case of the Jakarta Metropolitan Area’ (2015) 20
International Planning Studies 350.
96
Roberto Mangabeira Unger, Law in Modern Society : Toward a Criticism of Social Theory (Free
Press : Collier Macmillan 1977).
18

Discussion
Table 6: Framework for Analysing and Reconciling Informalities
Area of Informalities Type of Tenure, Services Emergence Reconciliation Method Justification for Incorporation
or other Institutional
Arrangement
Water Tenure Kahayan’s Customary Interaction between Not yet reconciled Legitimacy, equity and
Water Tenure custom and engineering efficiency (to a certain extent).
in peatland areas; not Most of the customary tenure
necessarily considered (except for Pukung Pahewan)
as Customary Law serve livelihood. Efficiency and
equity could be lost if the tenure
is used to encroach onto
protection areas. Incorporating
Pukung Pahewan will increase
efficiency in terms of
environmental protection
Community Based Water scarcity, donor Conversion of unincorporated Equity; water is a human right.
Water Supply’s intervention, national association into village owned Legitimacy and efficiency
Assumed, Impossible or government enterprises (but this is
Informal Tenure intervention problematic and is not an
automatic guarantee of water
tenure)
Illegal Groundwater Interaction between Cannot be incorporated Illegitimate; cannot be
Tenure in Rejoso mountain aquifer system incorporated categorically
Catchment and land-use change
from sugar plantation
into paddy field
19

Water services in Water services in Urban Interaction between Lowering barrier to entry, Equity; water is a human right.
Urban Slum Slum insecure land tenure, recognition, partial Legitimacy and efficiency
difficult spatial condition formalization
and water scarcity
Artisanal Gold Illegal Mining Tenure Prior Partial formalization, Equity: welfare and resource
Mining (Mining without license) Exploration/Exploitation recognition, lowering barrier distribution. Efficiency: phasing-
by Dutch Collonial to entry out of mercury, additional
Dispute Resolution Government or State income for the state
Service Owned Corporation
Community Based Water supply services Water scarcity, donor Formalization through Equity; water is a human right.
Water Services intervention, national conversion of unincorporated Legitimacy and efficiency
government association into village owned
intervention enterprises (but this is
problematic and is not an
automatic guarantee of water
tenure)
Eviction Land tenure Land tenures were Recgnition through court cases Legitimacy and equity
created by Dutch (unsuccesful)
colonial government and
customary practice
20

Typologies of Informalities
Some informalities which covers access to natural resources take the form of tenure -- an example of
this is illegal tenure (groundwater abstraction in Rejoso catchment), customary tenure (Handil, Saka
and many other tenure in Kahayan peatlands), land tenure in urban Jakarta (girik, verponding or even
squatting) or illegal mining tenure on the 6 provinces. At the same time, informalities can take the
form of “services”, such as community based service, water services in urban slum or other types of
institutional arrangements such as dispute resolution mechanism among “illegal” miners.
Sometimes, informalities in tenure will result on informal services or other informal institutional
arrangements. The informal dispute settlement mechanism among illegal miners are clearly a by-
product of their illegal access to mineral resources. However, the two are not always related. Some
community-based organization can abstract water legally (if they are constituted as BUMDes/village
owned enterprise), but still does not omit informalities surrounding their water services (lack of
service standard, complaint mechanism, etc). Likewise, waste-picker may have legal access to waste
or garbage dumps (a form or resources), but their “service” would remain informal. 97
Reconciliation Method
One of the method for renconciling informality is “recognition”. As demonstrated above in the Jakarta
Eviction case and also discussed by Shatkin and Soemarwi, recognition through the Court is extremely
problematic. On the other hand, recognition through legislation is more powerful, as evidenced in the
ASGM case.
The distinction between recognition on tenure and service (or other complex institutional
arrangement) also becomes important. “Community groups” for example is recognized as service
providers in drinking water provision system in regulatory framework 98 and their recognition as
providers have improved initially through GR 16/2005 99 and further through GR 122/2015. However,
their water (resources) tenure is still problematic.
Informalities in services and other institutional arrangements also require more efforts than in merely
recognizing and strengthening the tenure. In Artisanal Gold Mining (ASGM), legalization (awarding IPR
to formerly illegal miners) will need to be accompanied with substantial investment in mercury-free
gold treatment facilities, in addition to increasing miners knowledge and building their institution, i.e.
in terms of organizing the ores for treatment, adding value to the production chain and selling the
end-product. Likewise, even if Community Based Organization (CBO) water tenure is recognized and
legalized (which in overall has not been the case), it will need to be accompanied by post-construction
support from local government. This can take anything from the government’s readiness in terms of
financially supporting major repairs (which is problematic given the rules on regional budgetting),
increasing CBO’s technical, managerial and technical capacity and so on. Provision of water in urban
slum is also complicated as it would require cross-sectoral regulation and policy, from land to subsidy
mechanisms.
97
Melanie Samson, ‘Forging a New Conceptualization of “The Public” in Waste Management’ [2015]
Women in Informal Employment: Globalizing and Organizing.
98
See Peraturan Pemerintah Republik Indonesia Nomor 122 Tahun 2015 Tentang Sistem Penyediaan
Air Minum. Articles 41(1)(c) and 49.
99
Peraturan Pemerintah No. 16 Tahun 2005 (GR-16).
21

Lowering the barrier of entry towards a tenure or service is one of the method of incorporation. In
ASGM, the barrier of entry is “lowered” by increasing the maximum depth allowed for IPR, from 25
meters to 100 meters. In drinking water for urban slum, the requirements on the evidence of land
ownership/land utilization and proof of domicile was removed. However, a proof of Jakarta ID card
(KTP Jakarta) is still required, despite the fact that many migrants live in urban slum. No lowering of
barrier to entry have been practiced for water tenure (including drinking water tenure for community
based water service). The prerequisites for obtaining commercial license for drinking water is difficult
whereas, the prerequisite for obtaining approval is not clear. Furthermore, as previously discussed,
Article 50 exclude non state/regional/village owned enterprises in obtaining commercial abstraction
license for drinking water.
Justifications for recognition
As indicated in Table 6 there are several considerations which underlies reconciliation of informalities
into the legal system, namely on the grounds of equality, efficiency and (social) legitimacy. Either
through legislation, judicial decision or perhaps administrative act, these justification can serve as a
guiding principle when deciding whether a type of informality should be reconciled into the legal
system. These principles are still very basic and serves only as an early attempt to kickstart the
discussion of informality into the Indonesian legal discourse.
Equality is a human rights lexicon which entails distributive justice. This rationale is visible in all of the
case studies discussed above from water tenure, water services in urban slum, ASGM, CB water
services to eviction. All communities in those case studies require some kind of access, either to some
form of natural resources (land, water, gold) or services (water). With those access, they will become
more prosperous, while conversely, absent from those access, they will become poorer.
Social legitimacy is the second most important element in determining whether a type of informality
should be reconciled. This element is empirical, it looks at evidence of social patterns, values and
behaviour. The autochthonous tenure in Jakarta provides some evidence of legitimacy in the form of
the customary practices of land transfer which may not be recogized by the state but has live among
the society for some time. The community-based service access to water is also legitimate, in the sense
that they are supported, respected and acknowledged by the community as a way of providing their
basic need , although they may not be acknowledged by the state. Likewise, the illegal boreholes in
Rejoso catchment (Pasuruan) also has social legitimacy, but as we shall see below, it is inefficient.
Efficiency in this respect entails a judgement as to whether reconciling a certain type of informality is
better of for everyone in the future. I realized that this is a difficult proposition to make as one can
debate the type of efficiency 100 -- but this is outside the scope of the present article. An example of
this is the expansion of tatas 101 (see the water tenure study on the Kahayan catchment above) into
the depth of peatland forest, which could potentially disturb environmental protection. If recognized,
the tatas will not be efficient as a form of water tenure. This also entails that recognition of the tatas
as a form of tenure -- should be made on a case-by-case basis in which the efficiency consideration is
to be made.
Another example is the illegal water tenure in the rejoso catchment. The self-flowing boreholes there
have strong social legitimacy, but if this practice continued overtime, it will only lead to the tragedy of
100
Richard A Posner, ‘The Ethical and Political Basis of the Efficiency Norm in Common Law
Adjudication’ (1979) 8 Hofstra L. Rev. 487; Anthony T Kronman, ‘Wealth Maximization as a
Normative Principle’ (1980) 9 The Journal of Legal Studies 227.
101
Tatas are manmade channels in the peatland
22

the commons 102 as the groundwater resources will be damaged. Neither the local community and
everyone else depending on the resources will be better off with the practice. Simply put, the illegal
borehole practice maybe legitimate (socially) but is not efficient and as such, needs to be phased-out.
Efficiency here also means that care needs to be taken into consideration so that the process of
reconciliation, for example through formalisation, does not end up in destroying existing institutions.
For example, commercialization and professionalization of community based organisation needs to
be weigh against the possibility that disrupts the already effective but patrimonial leadership styles
that has been built. 103 In the case of land tenure, McCarthy et.al notes that formalisation can deprive
smallholders farmers of land and livelihoods. 104 Instead the authors argued for scaling down by making
the community in charge of their own governance or scaling up and out using private regulation.
Haldar and Stiglitz have also critiqued de-Soto’s style of land entitlement, since it could encourage
people to collateralize the only assets they have and in some cases produce adver gender impacts. 105
Towards a substantive and teleological “Negara Hukum”
As evidenced by the eviction case study, recognition of autochthonous land tenure by the judiciary,
including the CC, has been problematic. Likewise, I would expect that customary water tenure in
Kahayan catchment or elsewhere in Indonesia would face similar difficulty if they ever be brought to
justice. The culprit is the over-reliance of Indonesian jurist with written law. 106 Indonesian jurist
require a paradigm shift with respect to their ontology: there are rules and justice, beyond what is
written. This can start by leaning the interpretation of “Negara Hukum” towards a more substantive
and teleological meaning.
The formalistic side of the Negara Hukum concept features quite prominently in the Indonesian legal
discourse. For example, Asshidiqie outlined 13 (thirteen) principles of Negara Hukum, one of which is
the due process of law or the “legality principle”. According to Ashiddiqie, all government act must be
based on a valid and written legislations which exist prior to the act or administrative action being
undertaken. 107 This is consistent with the Constitutional Court’s (CC) position. The CC stated that the
essence of Negara Hukum is that all state action shall be based on rules. 108 The question here is of
course, what do we mean by rules?
According to Unger, in formalistic legal reasoning, decisions are rendered by reference to the rules
itself (intrinsic to the system), without regard to the arguments of fairness or utility (extrinsic
102
Garrett Hardin, ‘The Tragedy of the Commons’ (1968) 162 Science, New Series 1243.
103
Mireia Tutusaus Luque, Compliance or Defiance?: Assessing the Implementation of Policy
Prescriptions for Commercialization by Water Operators (1st edn, CRC Press 2019)
<https://www.taylorfrancis.com/books/9781000034578> accessed 19 May 2022.
104
John F McCarthy, Kathryn Robinson and Ahmad Dhiaulhaq, ‘Addressing Adverse Formalisation:
The Land Question in Outer Island Indonesia’ in AW Bedner and Barbara Oomen (eds), Real Legal
Certainty and Its Relevance (Leiden University Press 2018). Formalisation in this respect is conducted
through land titling, licensing and mapping/registration.
105
Antara Haldar and Joseph E Stiglitz, ‘Analyzing Legal Formality and Informality: Lessons from
Land-Titling and Microfinance Programs’ [2013] Law and Economic Development with Chinese
Characteristics 112.
106
E Fernando M Manullang, Legisme, Legalitas dan Kepastian Hukum (Prenada Media 2017);
Muhammad Helmi, ‘Penemuan Hukum Oleh Hakim Berdasarkan Paradigma Konstruktivisme’ (2020)
22 Kanun Jurnal Ilmu Hukum 111.
107
Jimly Asshiddiqie, ‘Konsep Negara Hukum’ (Jimly.com).
108
Putusan Nomor 79/PUU-XVII/2019 Pengujian Formil Undang-Undang Nomor 19 Tahun 2019
tentang Perubahan Kedua Atas Undang-Undang Nomor 30 Tahun 2002 tentang Komisi
Pemberantasan Tindak Pidana Korupsi (Mahkamah Konstitusi Republik Indonesia). See para 47
23

factors). 109 We have seen this in the Eviction case study above. When alluding to “Negara Hukum” in
96_PUU-XIV_2016, the CC looks at the formal conception of the rule of law. The CC, in the words of
Craig, “…are not concerned with whether the law was in that sense a good law or a bad law, provided
that the formal precepts of the rule of law were themselves met…”. 110 The substantive conception of
the rule of law however, seek to go beyond this as this mode of reasoning is impossible to attain
welfare; the polar opposite to formalistic legal reasoning is justification by equity (equality). 111 The
attainment of welfare has consequences, Unger said, namely, a departure from “… formalistic to
purposive or policy-oriented styles of legal reasoning and from concerns with formal justice to an
interest in procedural and substantive justice”. 112 The quest for substantive justice goes hand in hand
with the rechtsvinding school and Satjipto Rahardjo’s “progressive law” 113. Tumpa, for example
advocate judges to find the law if the law is unclear or no longer fulfill the community sense of justice
– but notes that it must be based on doctrines. 114
Although Indonesian jurist usually refer “rules” as legislation (written law) Simorangkir (1983: 185-
189), as quoted by Djafar, noted that the term Law (Hukum) in Negara Hukum means all kinds of law,
written or unwritten. Likewise, the word “Recht” in the German’ s Rechtsstaat could mean both law
and justice, in which the latter means that someone could appeal to unwritten norms of natural or
moral laws. 115
In relation to this, Simorangkir further states: “The Indonesian Negara Hukum is not a concept of a
formal Negara Hukum, instead, it is a substantive Negara Hukum, in which the state has the obligation
to promote public welfare and enlightening the public” (memajukan kesejahteraan dan mencerdaskan
kehidupan bangsa). 116 Simorangkir’s concept thus opens the possibility to interpret (teleologically) the
legal rules, merely, as an instrument to achieve the objectives of state establishment under the
Constitution’s preamble: welfare and enlightenment.
109
Unger (n 96). See page 204
110
Paul Craig, ‘Formal and Substantive Conceptions of the Rule of Law: An Analytical Framework’,
The Rule of Law and the Separation of Powers (Routledge 2005).
111
Unger (n 96). See page 205
112
ibid.
113
Satjipto Rahardjo, ‘Hukum Progresif: Hukum Yang Membebaskan’ (2011) 1 Jurnal Hukum
Progresif 1; Satjipto Rahardjo, Membedah Hukum Progresif (Penerbit Buku Kompas 2006).
114
Harifin A Tumpa, ‘Penerapan Konsep Rechtsvinding Dan Rechtsschepping Oleh Hakim Dalam
Memutus Suatu Perkara’ (2015) 1 Hasanuddin Law Review 126.
115
Edward J Eberle, ‘The German Idea of Freedom’ (2008) 10 Or. Rev. Int’l L. 1.
116
Wahyudi Djafar, ‘Menegaskan Kembali Komitmen Negara Hukum: Sebuah Catatan Atas
Kecenderungan Defisit Negara Hukum di Indonesia’ (2016) 7 Jurnal Konstitusi 151.
24

Conclusion
This paper have elaborated five case studies of informalities. Indonesia’s unique pathway to
development, such as the uneven development in cities where exiting kampung becomes surrounded
by new urban centers (which gives rise to land tenure issues and access to water services) or, the
inability of the state to provide water to rural communities (which give rise to community-based water
tenures) are some of the conditions which shaped informalities. As we traverse cities and villages, the
list of informalities goes on. Secondly, Indonesian society is plural; this heteregeneity gives rises to
various norms and values (such as the Pukung Pahewan in Kahayan Catchment), institutional
arrangements and different local rules. Top-down legislation will never be able to codify all empirical
realities from informalities in Indonesia.
As such, informalities may need to be reconciled into the legal system through recognition, legalization
or further, formalisation. However, there is a question on what type of informalities that needs to be
reconciled. This paper offers a basic guiding principles of equity, legitimacy and efficiency
considerations which undoubtedly still needs to be improved.
Legislation has a more powerful impact in terms of recornizing informalities (ASGM case) as opposed
to judicial decisions (eviction case). Nevertheless, since it would be impossible to codify all
informalities into legislation and that there are case-by-case scenarios where judgement needs to be
made both by executive and the judiciary, a paradigm shift from procedural to substantive Negara
Hukum would be required. This country was established with two purpose: public welfare and
enlightenment; in order to attain such goals, bureaucrat and judges need to depart from formalistic
to purposive or policy-oriented styles of legal reasoning.
25

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Al’Afghani, MM | Reconciling Informalities with Indonesia’s Legal System

Reconciling Informalities with Indonesia’s Legal System

Research Project Year Funding and Methodology

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Pilot Study on Water 2021-2022 Food and Agricultural Organization (FAO).

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Customary Water Tenure

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Table 1: Customary Water Tenure in the Kahayan Catchment, Central Kalimantan

Tabat Overflow dam, usually made of clay or wood

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Pukung Protected area. According to Satia,et.al, the area is considered to be controlled by

Impossible or assumed (drinking) water tenure

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Table 2: Article 45 and Article 50 of the Water Law

Article 45 (1) Article 50

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Table 3: Possible Tenure Typology for Community-Based Drinking Water

(Source: Al’Afghani and Bisariyadi, 2022) 33

No. Entity Permit Tenure

2. Incorporated Yes: Possibly through article 45, Permit

3. Foundation/Yayasan (Set Yes: Possibly through article 45, Permit

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cooperative is a commercial body.

5. Village owned enterprise / Yes: Article 50. Permit type: Permit

Illegal Groundwater Tenure

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Figure 1. Unregistered Artesian Well in Gondang Wetan and Winongan Sub-

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Community Based Water Services

Figure 2: Growing recognition of Community-Based Water Service

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One village head commented:

Meanwhile, a CBO chief commented:

Water Services in the Urban Slum

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Table 4: Service Typoloy in Jakarta

No. Service Typology Jakarta National

Tabel 5: Prerequisites for water connection

1. Normal Connection Special Connection

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Artisanal Gold Mining

The problem with ASGM and mercury

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Another miner added:

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Justifications for recognition

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Towards a substantive and teleological “Negara Hukum”

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