A.

Scope of Land Acquisition and Resettlement

1. The Tangguh Liquefied Natural Gas (LNG) Project is being developed in Berau and
Bintuni Bays on the Bird’s Head Peninsula of Papua, Indonesia’seasternmost province,
approximately 3,200 km east of Indonesia’s capital of Jakarta. The Project will extract
natural gas from large offshore reservoirs and pipe it to an LNG plant for conversion to
LNG after which the LNG will be exported (by tanker) to markets in the Asia Pacific
region and beyond. The Project will require construction of offshore drilling and
production platforms, submarine gas transmission pipelines and an on-shore LNG
processing plant with associated support facilities (port, airstrip, accommodation).
Construction commenced in 2004 and is scheduled to be completed in 2008. Based on
current reserves and an initial two-train capacity, the operational lifespan of the LNG
plant will be over 40 years.
2. Prior to BP’s involvement in the Project, ARCO and British Gas were engaged in
exploration phase activities. Where these activities were terrestrial, survey of transect
lines required felling of forest trees and crops (i.e., sago). Subsequent commitment to
Project development led to a site selection process which concluded that the optimal site
was located on the southern shore of Bintuni Bay in an area occupied by Tanah Merah
village. Subsequently, consultation,negotiation, and agreement with the clans holding
rights to the land and communities potentially affected by resettlement led to Project
acquisition of two tracts of land. A 3,266-ha plot of land was acquired for the LNG site
and a 200-ha plot was acquired to support the resettlement of the Tanah Merah
community. Finally the imposition of a marine safety exclusion zone around offshore
platforms, submarine pipes and adjacent to the LNG plant may affect various
stakeholders including commercial fisheries and artisanal fishermen.
3. Table 1 presents a summary of involuntary resettlement impacts.
4. The Project has developed a Land Acquisition and Resettlement Action Plan (LARAP) to
address its involuntary resettlement impacts. The objectives of the LARAP are to achieve
‘resettlement with development’ and thereby ensure that resettled households achieve
better livelihoods than they would have if resettlement had not taken place.

B Policy Framework

5. The Tangguh Project has designed its LARAP with the aim of complying with both ADB’s
Involuntary Resettlement Policy (1995) and the World Bank Group’s Operational
Directive 4.30. The three key elements of the ADB policy on involuntary resettlement are:
(i) compensation to replace lost assets, livelihood and income; (ii) assistance for
relocation, including the provision of relocation sites with appropriate facilities and
services and (iii) assistance for rehabilitation to achieve at least the same level of well-
being with the project as without it.
6. The Tangguh Project has significant involuntary resettlement impacts and has thus been
categorized as a Category A project requiring development of a full resettlement action
plan. The Project’s LARAP has been developed with reference to the ADB’s Handbook
on Resettlement: A Guide to Good Practice and IFC’s Handbook for Preparing a
Resettlement Action Plan.

C Entitlement

7. Using ADB policies referred to above, the Project has identified the following Project-
Affected groups: (i) those affected by exploration phase seismic work; (ii) people
impacted generally by the land acquisition (primarily the three clans) and (iii) the
resettlement-affected communities (i.e. those physically relocated and the host villages,
Tanah Merah, Saengga and Onar).
8. Compensation for felling of productive crops (i.e., sago) and forest trees during the
establishment of transect lines for exploration activities was provided by ARCO and
British Gas to affected communities and clans. Table 2 provides an entitlement matrix for
people affected by land acquisition and the resettlementaffected communities. Eligibility
was defined by reference to socio-economic censi implemented in the resettlement-
affected villages in 2001 and 2002.

D Socio-economic Background

9. Socio-economic surveys of the resettlement village and host villages were conducted in
2001 and 2002. The survey involved full enumeration of all households resident in the
villages. The surveys: (a) provided socio-economic information that has been included in
the LARAP; (ii) established a baseline against which the success of the LARAP can be
measured and (iii) formed the basis of defining eligibility to receive compensation and/or
benefits. Consultation, Participation and Disclosure
10. The key objective of the public consultation and disclosure process is to ensure
awareness, support and participation of the Project-Affected People in planning and
implementing activities associated with Project development and resettlement. The
Project engages in continuous consultation with the resettlement-affected communities.
This occurs through the establishment of formal mechanisms such as village
committees, with interest groups established around sectoral program implementation,
and on an informal basis through continuous interaction with the affected communities,
the latter being facilitated by the establishment and residence of a Resettlement Unit in
the midst of the resettlement-affected communities.
11. As per ADB requirements, the summary and full Land Acquisition and Resettlement
Action Plan (LARAP) will be disclosed. In addition, an Indonesian language summary of
the LARAP has been distributed to resettled-affected households. The summary
provides information on resettlement impacts, entitlements, compensation, livelihood
restoration programs and schedules.

F Grievance Procedures

12. In situ residence of the Resettlement Unit has allowed continuous access and
consultation and provided a vehicle for on-the-spot resolution of grievances. As
described in the Land Acquisition and Resettlement Action Plan, the Project is
implementing a formal grievance tracking and resolution procedure in 2005.

G Livelihood Restoration

13. As described above, the general objective of the Land Acquisition and Resettlement
Action Plan is to achieve ‘resettlement with development’ ensuring that affected
households achieve better livelihoods than they would have if resettlement had not taken
place. To achieve this objective the resettlement plan describes restoration and
development programs for the main components of local livelihood strategies, namely
agriculture, fisheries and micro-enterprise. The primary target group of these programs is
the resettled households.
14. Agriculture: Resettled households retain traditional mechanisms to utilize clan lands
distant from new settlements. The agriculture program initially focuses on restoration
activities including land division and allocation and the establishment of vegetable and
field crop and agroforestry gardens in the vicinity of the resettlement villages. Benefit
packages including agricultural tools, seed and fruit tree seedlings will be provided to
every household. Further development of agriculture systems will consider market
gardening, livestock, and estate cropping based on interest from households.
15. Fisheries: The harvest and sale of prawns represents the main source of cash income
for households. The fisheries program initially focuses on restoration activities including
access to fishing grounds and availability of fishing equipment. Supporting activities
include the support of boat construction and distribution of motors. Subsequently
increased access to more distant traditional fishing grounds lying to the east of the LNG
facility will be facilitated through provision of boats to bypass the safety exclusion zone of
the LNG facility and development of an access track connecting the main resettlement
village to the eastern fishing grounds. In addition a range of development interventions
including diversification of markets, post-harvest processing of marine produce, and
access to other markets will be pursued.
16. Micro-enterprise: The program will support savings and micro-enterprise development as
a means of: (i) ensuring that the short-term benefits brought by the Project (i.e., wage
labour) serve as a catalyst for sustainable livelihood development, and (ii) supporting
diversification of livelihood strategies.

H Employment

17. Employment: Employment of resettlement-affected villagers will be prioritized during

construction of resettlement and host villages. Opportunities for LNG construction phase
employment will be provided to at least one member of every household of the
resettlement-affected villages.
18. Vocational Training: Vocational training initiatives were implemented to support
household participation in construction. From 2006-2009, Resettlement will support the
participation of approximately 15 people/year in selected vocational training opportunities
within the regency and the Bird’s Head of Papua. I Implementation Framework
19. The Integrated Social Program Unit of the Tangguh Project will be the Executing Agency
of the Land Acquisition and Resettlement Action Plan. Within this Unit, a Resettlement
Unit has been established to manage implementation (compensation, resettlement,
livelihood restoration). Construction of resettlement and host villages is managed by the
Project, and contracts for construction were awarded to preferred contractors.

J Budget

20. The total budget allocated to implementation of the Land Acquisition and Resettlement
Action Plan in the resettlement-affected villages from 1999 to 2009 is US$31,126,451.
Land acquisition and compensation is the largest line item representing 70.8% of the
budget. Initiatives aimed at achieving ‘resettlement with development’ represent 9.8% of
the budget. The Tangguh Project finances the full budget.

K Implementation Schedule

21. The Land Acquisition and Resettlement Action Plan will be implemented from 1999
through 2009. A detailed implementation schedule for the resettlementaffected villages is
incorporated into the resettlement plan. The LARAP’s key
phases are:
a. 1999 – initial ‘in principle’ agreements on land relinquishment and initial ‘in principle’
agreements on land relinquishment and resettlement;
b. 2002 – detailed agreements regarding entitlement for resettlement and detailed
agreements regarding entitlement for resettlement and host villages;
c. 2003-2004 – construction of replacement settlements;
d. 2004 – physical relocation of community; physical relocation of community;
e. 2004-2009 – implementation of livelihood restoration programs.

L Monitoring and Evaluation

22. The Resettlement Unit will be responsible for internal monitoring of resettlement plan
implementation. An external monitoring and evaluation team will review implementation
on an annual basis. Such reviews will be supported by socio-economic surveys. A
baseline survey was conducted in 2001-2002. Further surveys will be implemented every
two years following physical relocation (i.e., 2005, 2007,

Land Acquisition and Resettlement Action Plan (LARAP)

1. Introduction
The Tangguh Project recognizes that various project activities may result in the loss of land,
resources and means of livelihood and social support systems of people in the Bay.
Accordingly the Project has utilized the Asian Development Bank (ADB) and World Bank
(WB) involuntary resettlement policies and guidelines for identifying Project-Affected People
and addressing Project impacts. Under ADB guidelines, where a Project will have major
impacts on 200 or more people it is categorized as a Category A project requiring a full
resettlement plan. The Tangguh Project is a Category A project.

2. Land Acquisition and Resettlement Action Plan (LARAP)

This document specifically addresses the involuntary resettlement impacts of the Project.
Both Indonesian law and international “best-practice” regarding involuntary resettlement
require projects involving land acquisition and population displacement to develop a Land
Acquisition and Resettlement Action Plan (LARAP). Under Indonesian regulations the
preparation of the Integrated Environmental Impact Statement (AMDAL) requires inclusion of
a LARAP if people are to be relocated. Similarly gaining approval and support from
international financial institutions such as the ADB, WB or other multilateral lending and
funding organizations requires development of a LARAP containing detailed resettlement
action and monitoring plans.

In 2002, the Project submitted the AMDAL to the Indonesian government. The AMDAL
contained a Project LARAP in the Environmental Management Plan (RKL). The AMDAL
LARAP (subsequently referred to as the ‘Compliance LARAP’) met and exceeded
Indonesian standards for addressing impacts associated with population displacement.
Nonetheless the Project is committed to achieving standards higher than those specified in
the Compliance LARAP and more in line with those advocated by international best-practice.
Accordingly the Compliance LARAP has been further developed and refined, leading to the
production of an ‘Implementation LARAP’ as described in this document. In addition, the
Implementation LARAP also incorporates:
- Additional information regarding the resettlement process (e.g., land acquisition,
relocation, income restitution and development);
- Additional consultations with the resettlement-affected communities;
- Additional work, studies and plans for resettlement-affected communities developed in
the 30 months since submission and approval of the ComplianceLARAP;
- Activities initiated and/or completed (e.g., village construction, relocation of the Tanah
Merah community, training and recruitment, income restitution, etc.).

This document presents the Project’s Implementation Land Acquisition and Resettlement
Action Plan. The document is a key component of the Project’s Integrated Social Program
(ISP) document which describes all of the Project’s socio-economic development programs.

3. Resettlement Objectives
The objectives of the Project’s Land Acquisition and Resettlement Action Plan are to achieve
‘resettlement with development’ and thereby ensure that resettled households achieve better
livelihoods than they would have if resettlement had not taken place. 1.2.4 Project-Affected
People Using ADB policies referred to above, and ADB criteria outlined in Section 3.2.2, the
Project has identified the following ‘Project-Affected People’:
- Those affected by exploration phase seismic work;
- The resettlement-affected communities (i.e. those physically relocated and the
- host villages, Tanah Merah, Saengga and Onar);
- People impacted generally by the land acquisition (primarily the three clans);

In accordinace with ADB policy, the Project is committed to on-going monitoring of activities
and the development of further plans with appropriate mitigation measures if necessary. For
example, while current Project assessment indicates that the establishment and
enforcement of marine safety exclusion zones will not impact commercial enterprises, the
Project will continue to monitor the situation as these zones are established and enforced

Policy Framework For Land Acquisition and Resettlement

1. Introduction
The Project is currently negotiating financing with a number of international financial
institutions. Some of these institutions require compliance with specific environmental and
social policies during the term of any financing provided by them. With respect to involuntary
resettlement, ADB has indicated that the ADB’s Involuntary Resettlement Policy (1995) will
be applied by them in the context of financing the Tangguh Project. The Japan Bank for
International Cooperation (JIBC) and several of the commercial lenders have indicated that
the World Bank Group’s Operational Directive 4.30 Involuntary Resettlement will be applied.
Accordingly, the Tangguh Project has designed its LARAP with the aim of complying with
both ADB’s Involuntary Resettlement Policy (1995) and the World Bank Group’s Operational
Directive 4.30.
This chapter first discusses the key components of population displacement and
resettlement. It then describes the emergence of international policies, guidelines and
standards for resettlement and specifies the policy framework and operational guidelines
that the Tangguh Project has adopted for its Resettlement Program. It highlights the key
aspects of these policies that have been incorporated into the planning and implementation
of the Tangguh resettlement activities. Finally it describes the World Bank Impoverishment
Risk and Reconstruction (IRR) model, which has been adopted as the basis for analyzing
and addressing impoverishment risks faced by the resettlement affected communities.

2. The Basic Concepts of Resettlement

The international guidelines and standards for resettlement, more fully described in Section
3.3, have been developed in order to deal with the negative impacts that are associated with
involuntary resettlement and to ensure the protection of affected communities. Generally the
analysis of resettlement requires consideration of the concepts set out below.
Involuntary Resettlement
Under ADB’s policy framework, involuntary resettlement describes situations whereby the
development of a project leads to temporary or permanent social and economic impacts
through:
(a) the acquisition of land and other fixed assets; (b) changes in use of land, and/or (c)
restrictions
imposed on land as a result of a project.

3. Project-Affected People
ADB’s Operations Manual defines the term ‘project affected person’ (PAP) to include any
person,household, firm or private institution who, on account of changes that result from a
project, will have their:
a. Standard of living adversely affected;
b. Right, title, or interest in any house, land (including residential, commercial, agricultural,
forest, and/or grazing land), water resources, or any other moveable or fixed assets
acquired, possessed, restricted, or otherwise adversely affected, in full or in part,
permanently or temporarily, and/or
c. Business, occupation, place of work or residence, or habitat adversely affected, with or
without displacement.

4. Physical and Economic Displacement

Displacement can be either physical, economic or both. Physical displacement occurs when
people lose their dwellings and have to move from the site where their community is located.
In such circumstances, where they maintain their cultivated lands and access to other
resources they may not be economically displaced. When a project’s needs restricts
people’s access to their productive resources (cultivated land, forest areas, fishing areas,
etc.) they incur economic displacement. Often both types of displacements (i.e., physical and
economic) take place simultaneously.

a. Restricted Access
Project needs may not only require the acquisition of land but also impose various
demands and/orrestrictions upon the local population and the use of, or access to, some
natural resources. Such restrictions represent an opportunity cost for the local
population. The restriction of access and activity is considered as another form of
economic displacement.
b. Expropriation
Expropriation takes place when the power of eminent domain is used to compulsorily
purchase land and houses and thus remove, under legal authority, the residing people
who otherwise would not relocate. The eminent domain principle is inscribed in the legal
systems and land acquisition laws of virtually all countries, and is intended for application
by governments when expected benefits are in the general public interest and no other
solution can be found. As noted in Section 4.3.3.2, the Tangguh Project did not have
legal recourse to use eminent domain.
c. Free Land Purchase
Increasingly, projects rely on free negotiation to acquire land, and are reluctant to utilize
eminent domain compulsory expropriation even when such recourse is available. They
therefore rely on willing buyer–willing seller purchase transactions. This provides for an
open transaction and negotiation process for the price and circumstances of the sale.
Resettlement that takes place as a result of a sale–purchase land transaction has the
effect of transferring rights to the purchaser, and is guided by the legal arrangements
made at the time of the purchase. The willing seller-willing buyer transaction assumes
the existence of land markets or other opportunities for the productive investment of the
revenue from sales, and fair price for the transferred assets. In the absence of land
markets, the buyer must provide an appropriately structured compensation package
enabling the sellers of land and assets to restore their livelihood or improve it over the
levels prevailing at the time of sale. Usually such arrangements also include provisions
for effecting the physical transfer of the population.
d. Entitlement
A range of measures comprising compensation, transfer assistance, income substitution,
income restoration and relocation which are due to affected people, depending on the
nature of their losses, to restore their economic and social base.
e. Resettlement
Resettlement occurs when people are required to relocate their place of habitat and/or
their productive activities to different sites. Resettlement may be voluntary or involuntary.
 Resettlement has three distinct phases or social processes:
• Displacement of people from the site of their residence or productive activities;
• Transfer of the people to a different site, and
• Reconstruction of livelihoods and communities.
f. Resettlement with Development
Resettlement with development occurs when the economically and physically displaced
population sees significant improvement over previous standards of living. This includes
restoration of previous levels of living, but goes further by deliberately using the
opportunities of change and development created through resettlement to enhance the
conditions of resettlers at their new habitat. Resettlement with development takes time
and does not occur suddenly and simultaneously with the act of physical relocation to the
new location. However, to ensure success, the basic premises for resettlement with
development must be established and planned for before the displacement process.
g. Rehabilitation and Reconstruction
After relocation, rehabilitation or reconstruction refers to activities intended to restore the
resources and capacities lost by displaced people to enable them to resume their
productive activities, income streams and patterns of life at a level at least equal to that
before the project. Rehabilitation measures include restoration of access to public
facilities, infrastructure and services, and to cultural property and common property
resources. Measures to mitigate loss of access to cultural sites, public services, water
resources, grazing or forest resources include establishment of access to equivalent and
culturally acceptable resources and income earning opportunities. Such measures must
be determined in consultation with the affected communities, whose rights may not be
formally recognized in national legislation. Where people are seriously affected by the
loss of assets, incomes and employment, compensation solely for lost assets may not be
adequate to restore their economic and social base. Such people will be entitled to
rehabilitation measures for restoring incomes and living standards.
h. Host Population
Displaced people usually relocate to areas already inhabited by other communities.
Often resettled groups are relocated next to existing communities, and sometimes even
within them, a process described as in-fill relocation. The concept of host population
refers to the people who live within, or in the immediate vicinity of, the area to which
physically displaced people will resettle. The resulting increase in the people-to-land
area ratio is likely to increase pressure on available natural resources and may include
other negative effects on the host communities. Therefore, the LARAP must include
comprehensive mitigation measures to protect and benefit the host population.
i. Resettlement Plan (RP)/Resettlement Action Plan (RAP)
A Resettlement Plan (or Resettlement Action Plan) defines a project’s involuntary
resettlement objectives and strategy. It also represents the project’s commitment to the
project-affected people and financing institutions. The content of a resettlement plan
varies depending on the nature of the project, its impacts and the size of the affected
populations. Further details of what is required are provided in Section 3.3.3.

5. International Policies and Standards for Resettlement

a. Tangguh Project Policy and Standards for Involuntary Resettlement
The Tangguh Project has adopted a policy framework that embodies internationally
acceptedprinciples and best practices. The internationally recognized policy
documents on which the present policy framework for Tangguh relies are:
(a) The Asian Development Bank’s Policy on Involuntary Resettlement (1995);
(b) The World Bank’s Operational Policy on Involuntary Resettlement (June 1990);
(c) The Organisation for Economic Co-operation and Development’s Guidelines on
Involuntary Resettlement for Aid Agencies of OECD Countries;
b. The IFC (International Finance Corporation) Handbook for Preparing a Resettlement
Action Plan;
c. The relevant World Bank/IFC safeguard policies and guidelines referenced in the
Statement of Principles dated June 2003, (referred to as the ‘Equator
Principles’).Reference was also made to the Asian Development Bank’s Operational
Manual Section F2 Involuntary Resettlement (OM Section F2) insofar as it provides
additional guidance and definitions relevant to the application of that institution’s
Policy on Involuntary Resettlement. Specific reference to the Asian Development
Bank’s Involuntary Resettlement Policy and the World Bank’s Policy and Guidelines
on Involuntary Resettlement (and related material) has guided the development of
this document.
d. Development of Involuntary Resettlement Policy and Standards
Over the last two decades both public and private sector agencies have developed
and adopted involuntary resettlement policies and standards. In the public sector,
the World Bank was the first agency to formulate a resettlement policy (first issued
in 1980). This was followed soon thereafter by the Asian Development Bank, Inter-
American Development Bank, the African Development Bank and other major
agencies. In addition, in 1991, the governments of 25 developed nation members of
the Organisation for Economic Co-operation and Development (OECD) adopted
similar policy guidelines for their bilateral aid agencies. These guidelines are binding
for development projects assisted by OECD countries in developing countries
(including Indonesia). The World Bank Policy on Involuntary Resettlement OD 4.30
was adopted by the International Finance Corporation (IFC—the private sector
development arm of the World Bank group) in 1998, and has now been replaced by
the revised policies and procedures issued by the World Bank in 20013. More
recently, in June 2003, 10 leading international banks involved in financing private
projects, particularly in emerging markets, adopted a set of principles with the aim of
ensuring that the social and environmental issues in projects funded by them are
properly managed. These principles referred to as the ‘Equator Principles’ reference
a number of the World Bank and IFC safeguard policies and specific guidelines,
including OD 4.30 on Involuntary Resettlement. In adopting the Equator Principles,
the adhering banks (whose numbers have reached 29 by end-2004) have
undertaken, in specified circumstances, to provide loans only to those projects
whose sponsors can demonstrate their ability and willingness to comply with host
country laws and with the relevant World Bank and IFC policies and guidelines. The
institutionalization of the Equator Principles reflects a move by the international
financial sector towards convergence with international public agencies regarding
the mechanisms for addressing the social and environmental issues associated with
major projects.
e. Asian Development Bank’s Policy on Involuntary Resettlement
The ADB Involuntary Resettlement Policy (1995) aims to ensure that people who
are dispossessed or displaced are able to realize development benefits. The
intention of the policy is to ensure that involuntary resettlement becomes a
development opportunity, and that those affected actually benefit from the project
that is causing the impacts. Expanding on the policy, OM Section F2 characterizes
involuntary resettlement as occurring in situations where the development of a
project leads to temporary or permanent social and economic impacts through: (a)
the acquisition of land and other fixed assets; (b) change in use of land, or (c)
restrictions imposed on land as a result of a project. ‘Affected People’ are defined as
any people,hou seholds, firms or private institutions who, on account of changes
that result from the project will have their: (a) standard of living adversely affected;
(b) right, title, or interest in any house, l and(including residential, commercial,
agricultural, forest, and/or grazing land), water resources, or any other moveable or
fixed assets acquired, possessed, restricted, or otherwise adversely affected, in full
or in part, permanently or temporarily, and/or (c) business, occupation, place of work
or residence, or habitat adversely affected, with or without displacement.
The three key elements of the policy are (a) compensation to replace lost assets,
livelihood and income; (b) assistance for relocation, including the provision of
relocation sites with appropriate facilities and services, and (c) assistance for
rehabilitation to achieve at least the same level of well-being with the project as
without it. The key principles for assessing and planning involuntary resettlement as
defined in the Asian Development Bank’s OM Section F2 are as follows:
a. Involuntary resettlement should be avoided whenever feasible.
b. Where population displacement is unavoidable, it should be minimized by
providing viable livelihood options.
c. Replacing what is lost. If individuals or a community must lose all or part of their
land, means of livelihood, or social support systems, so that a project might
proceed, they will be compensated and assisted through replacement of land,
housing, infrastructure, resources, income sources and services, in cash or kind,
so that their economic and social circumstances will be at least restored to the
pre-project level. All compensation is based on the principle of replacement cost.
d. Each involuntary resettlement is conceived and executed as part of a
development project or program. Affected people need to be provided with
sufficient resources and opportunities to re-establish their homes and livelihoods
as soon as possible, with time-bound action in coordination with the civil works.
e. The affected people are to be fully informed and closely consulted. Affected
people are to be consulted on compensation and/or resettlement options,
including relocation sites and socio-economic rehabilitation. Effective grievance
procedures must be established.
f. Social and cultural institutions. Institutions of the affected people and, where
relevant, of their hosts, are to be protected and supported. Affected people are
to be assisted to integrate economically and socially into host communities so
that adverse impacts on host communities are minimized and social harmony is
promoted. No formal title. Absence of formal legal title to land is not a bar to
entitlements. People without formal land title and those with established use
rights must berecognized.
g. Identification. Affected people are to be identified and recorded as earlyas
possible in order to establish their eligibility through a population recordor
census that serves as an eligibility cutoff date, preferably at the
projectmidentification stage, to prevent subsequent influx of encroachers or
others who wish to take advantage of such benefits.
- The Poorest. Particular attention must be paid to the needs of the poorest
affected people and vulnerable groups that may be at high risk of
impoverishment. This may include those without legal title to land or other
assets, households headed by females, the elderly or disabled and other
vulnerable groups, particularly indigenous peoples. Appropriate assistance
must
be provided to help them improve their socio-economic condition.
- The full resettlement costs are to be included in the presentation of project
costs and beneits.

Implementation of ADB policy requires that proposed projects be assigned an

involuntary resettlement category depending on the significance of the probable
resettlement impacts. Projects are classified as Category A – Significant;
Category B – Not Significant, or Category C – No Involuntary Resettlement
Effects. If a project is categorized as Significant, the policy requires the
development of a full resettlement plan. Significant means 200 or more people
will experience major impacts, which are defined as: (a) being physically
displaced from housing, or (b) losing 10% of more of their productive (income-
generating) assets. The Tangguh Project is therefore a Category A project in
terms of its involuntary resettlement impacts.
Project Policy and Legal Framework for Project-Affected People

This chapter describes the policy and legal framework within which the Tangguh Project has
carried out land acquisition and resettlement, and established compensation for Project-
Affected People (PAPs). It then describes in detail the way in which this has been
implemented. The chapter is setout as follows:
- The first section identifies the Project-Affected People and sets out an entitlement matrix.
- The second section describes the policy and legal basis for provision of compensation to
Project-Affected People. Based on the identification of Project impacts, this section
focuses on the basis for: (a) land acquisition; (b) resettlement, and (c) resource
compensation including forest, cultivated crops and marine resource rights. This section
includes a comparison of the Asian Development Bank’s policy on involuntary
resettlement and Indonesian legislation, and provides a summary of the way in which the
Project has fulfilled ADB requirements.
- The third section deals with the implementation of the policy and legal framework for the
three groups of identified PAPs. Implementation includes the process of establishing
appropriate compensation, consultation, and agreements with PAPs. The section
illustrates how the framework adopted by the Project reflects current Indonesian best
practices and international guidelines issued by the Asian Development Bank and the
World Bank.
- The final section addresses the complexity of resettlement for relocated and host
communities. It describes the development of specific agreements between the Project
and/or within the communities that facilitated resolution of the many issues that have
arisen during the resettlement process.

Entitlement Matrix
As discussed in Chapter 1, the Project has identified three Project-Affected groups:
a. Those affected by exploration-phase seismic work;
b. The resettlement-affected communities (i.e. those physically resettled and the host
villages—Tanah Merah, Saengga and Onar);
c. People impacted generally by land acquisition (primarily the three clans Sowai, Wayuri
and Simuna), and

Compensation for each of these groups has been dealt with in different ways in light of the
timing of the losses incurred by each of the groups. Project-Affected People who were
temporarily affected by seismic operations were compensated in the manner described in
Section 4.4.1 below. The main groups of PAPs are the villagers resettled from Tanah Merah,
the host communities of Saengga and Onar, and the three clans, compensated as set out in
Section 4.4.2. In addition, as described in Section 4.4.3, the Project commits to on-going
monitoring and assessing occurrence of resettlement-related impacts. Table 4.1 presents an
entitlement matrix that identifies the losses incurred by each group, and the way in which the
Project has provided compensation.

ADB – Asian Development Bank

AH – affected household
AP – affected person
BAPPEDA – Badan Perencanaan Pembangunan Daerah
(Provincial/District Development Planning Agency)
BPN – Badan Pertanahan Nasional (National Land Agency)
BWS – Balai Wilayah Sungai (Center for River Basin)
CBFRM – community-based flood risk management
COI – corridor of impact
CWZ – construction works zone
DED – detailed engineering design
DGWR – Directorate General of Water Resources
DMS – detailed measurement survey
EA – executing agency
EIA – environmental impact assessment
EMA – External Monitoring Agency
FMSRBSP – Flood Management in Selected River Basins Sector Project
GOI – Government of Indonesia
HH – household
IA – Implementing agency
IOL – inventory of losses
IR – involuntary resettlement
Km – kilometer
LA – Land acquisition
LAIT – land acquisition implementation team
LRP – livelihood restoration program
MAPPI – Masyarakat Profesi Penilai Indonesia (Indonesian
Professional Appraiser Association)
MOHA – Ministry of Home Affairs
NJOP – Nilai Jual Object Pajal (tax object selling price)
PIB – project information booklet
PIU – project implementation unit
PPAT – Pejabat Pembuat Akla Tanah (land deed official)
SES – socioeconomic survey
SOE – state-owned enterprise
SPS – Safeguards Policy Statement
SPPT – Surat Pemberitahuan Pajak Terhutang (government
notification of outstanding tax)

Affected Residents/ Population/Entitled Persons

Refers to any person or persons, customary community, private or public institution who are
physically displaced (relocation, loss of residential land, or loss of shelter) and/or
economically displaced (loss of land, assets, access to assets, income sources, or means of
livelihood) as result of i) acquisition of land; ii) restriction on land use or on access to legally
designated parks and protected areas. The affected populations are parties who control or
possess an object land acquisition.

Census of affected persons

The census is a count of all displaced persons irrespective of their titled or non-titled land
ownership status. Its purpose is to accurately document the number of displaced persons
and to create an inventory of their losses finalized on the basis of a DMS.A census describes
the persons who are displaced, their livelihoods and income sources, and what they are
likely to lose because of the project.

Compensation
Proper and equitable replacement provided in the form of cash or other agreed in kind at
replacement cost to the affected person / entitled party in the process of land acquisition /
resettlement for the assets and livelihoods lost or affected by the project.

Construction Works Zone

A CWZ shall be a designated zone defined during detailed design and clearly identified in
the resettlement plan update that will divide the canal/river into convenient stretches for
construction implementation
Corridor of Impact
Area, which is impacted by civil works in the implementation of any subproject of the
FMSRBSP. It is important in two particular respects: (a) Legally as the area within which
AHs will be entitled to compensation and other measures for any loss of land, structures or
land use and occupation and of livelihoods and (b) Operationally as the agreed and
demarcated area within which construction activities will take place.

Cut-off date
The cut-off-date for eligibility to project entitlements refers to the date when the Land
Acquisition Implementation Team (LAIT) led by Land Agency posts the result of the detailed
measurement survey (DMS) that include the list of the entitled parties and the losses in
public places (e.g village office, district office, and the location of the land acquisition). The
cut-off date sets the time limits to determine eligibility of persons living and/or with assets or
interests inside the project areas. Should they be adversely affected, they will be entitled
to compensation for their affected assets, including rehabilitation measures as needed,
sufficient to assist them to improve or at least maintain their pre-project living standards,
income-earning capacity and production levels. Those who encroach into the project area, or
any of its subprojects, after the cut-off date will not be entitled to compensation or any other
assistance. The cut-off date will be made known to entitled
parties and other stakeholders.

Detailed Measurement Survey

With the use of approved detailed engineering drawings, this activity involves the finalization
and/or validation of the results of the IOL, severity of impacts, and list of APs done during the
preparation of this resettlement plan. The updating will be carried out during land acquisition
implementation phase undertaken by the land acquisition team led by land office.

Eminent domain/ Compulsory Land Acquisition

The right of the state using its sovereign power to acquire land for public purposes. National
law establishes which public agencies have the prerogative to exercise eminent domain.

Entitlement
Refers to a range of measures of compensation and other forms of assistance provided to
displaced/ entitled persons in the respective eligibility category.

Entitled party
Party that controls or possesses land acquisition object

Impact
Extent of social and economic impacts resulting from the implementation of an activity. In
land acquisition / resettlement, the degree of impact will be determined by (a) scope of
economic loss and physical displacement / relocation; and (b) vulnerability of the affected
population / entitled party. Impact can be positive or negative.

Impact Indicator
Effect of benefits derived from project activity. Impact indicators can only be known in
medium and long term. Impact indicators show the rationale why a project is implemented,
describe the macro aspects of project implementation, and the purpose of
sectoral, regional and national projects.

Income restoration
This involves rehabilitating the sources of income and productive livelihoods of severely
affected and vulnerable APs to enable income generation equal to or, if possible, better than
earned by displaced persons before resettlement.
Inventory of Losses
This is the listing of assets as a preliminary record of affected or lost assets during the
preparation of this resettlement plan where all fixed assets (i.e., land used for residence,
commerce, agriculture; dwelling units; stalls and shops; secondary structures, such as
fences, tombs, wells; standing crops and trees with commercial value; etc.) and sources of
income and livelihood inside the COI are identified, measured, their owners identified, their
exact location pinpointed, and their replacement costs calculated. The severity of impact on
the affected assets and the severity of impact on the livelihood and productive capacity of
the Affected Persons or entitled parties are likewise determined.

Land acquisition
Land Acquisition activity by way of giving compensation and other measures adequately and
at replacement costs for damages / loss to the entitled parties / affected populations in
order to reduce adverse social impacts due to the project. Land acquisition and resettlement
are conducted involuntary for the benefit of the project.

Land Acquisition andResettlement Plan

A time-bound action plan with budget, setting out the resettlement objectives and strategies,
entitlements, activitiesand responsibilities, resettlement monitoring, and resettlement
evaluation.

Land Acquisition object

Land, space above ground and below ground, buildings, plants, objects related to land, or
any other objects that can be assessed

Relocation
The physical displacement of an AP from his/her pre-project place of residence and/or
business.

Relocation Assistance
Support provided to persons who are physically displaced by a project. It may include
transportation, transitional assistance (food, shelter, and social service) that is provided to
the displaced persons in connection with their relocation.

Replacement cost
Amount in cash or in kind needed to replace an asset in its existing condition, without
deduction for transaction costs or depreciation, at prevailing market value, or its nearest
equivalent, at the time of compensation payment

Resettlement
It is the displacement of people, not of their own volition but involuntarily, from their homes,
assets, sources of income and livelihood in the Corridor Of Impact (COI) in connection with
the Project.

Severely affected persons

This refers to Affected/ displaced Persons who will i) lose 10% or more of their total
productive assets, ii) have to relocate, and/or iii) lose 10% or more of their total income
sources due to the project.

Vulnerable groups
These are distinct groups of people who might suffer more or face the risk of being further
marginalized due to the project and specifically include: i) households that are headed by
women, ii) household heads with disabilities, iii) households falling
under the regional poverty line, and iv) elderly household heads.1
ADB Safeguards Policy
The objectives of the ADB social safeguards policy are to avoid involuntary resettlement
whenever possible; to minimize involuntary resettlement by exploring project and design
alternatives; and to enhance, or at least restore, the livelihoods of all displaced and
vulnerable persons in real terms relative to pre-project levels; and to improve the standards
of living of the displaced poor and other vulnerable groups. The policy indicates four
important elements in involuntary resettlement:
(i). Avoid the need for involuntary resettlement by exploring project and design
alternatives;
(ii). If avoidance is not possible, compensate for lost assets and loss of livelihood and
income of displaced / affected population so that their livelihood will be enhanced or at
least equal or restored to the pre-project level;
(iii). Assist in relocation including provision of relocation sites with appropriate facilities and
services; and
(iv). Enhance the living standards of the poor and other vulnerable affected / displaced
groups.

The absence of legal title to land cannot be considered an obstacle to compensation and
rehabilitation privileges per ADB Policy. All persons affected by the Project, especially the
poor,landless, and semi-landless persons shall be included in the compensation,
resettlement, and rehabilitation package. APs and/or AHs, whichever is deemed applicable,
who are unable to demonstrate a legalizable or recognizable claim to the land being
acquired will be eligible for compensation with respect to non-land assets only, and not the
land itself. They will however be provided with other benefits and allowances as provided to
other APs.

The following ADB-SPS principles on involuntary resettlement are put forward and will also
apply to the Project:
(i). Develop procedures in a transparent, consistent, and equitable manner, if land
acquisition is through negotiated settlement in order to ensure that those people who
enter into negotiated settlements will maintain the same or better income and livelihood
status.
(ii). Prepare a LARP elaborating on displaced persons' entitlements, the income and
livelihood restoration strategy, institutional arrangements, monitoring and reporting
framework, budget, and time-bound implementation schedule.
(iii). Disclose a draft LARP, including documentation of the consultation process in a timely
manner, before subproject appraisal, in an accessible place and a form and
language(s) understandable to affected persons and other stakeholders.
(iv). Disclose the final LARP and its updates to affected persons and other stakeholders.
(v). Monitor and assess resettlement outcomes, their impacts on the standards of living of
displaced persons, and whether the objectives of the LARP have been achieved by
taking into account the baseline conditions and the results of resettlement monitoring.
Disclose monitoring reports.

ADB’s SPS includes Indigenous Peoples safeguards, which is triggered if a project directly
or indirectly affects the dignity, human rights, livelihood systems, or culture of IPs or affects
the territories or natural or cultural resources that IPs own, use, occupy, or claim as their
ancestral domain. If impacts on IPs involve involuntary resettlement, SPS Safeguard
Requirements 3 will likewise govern the resettlement framework. There are no IP will be
impacted positively or negatively by the three identified core sub-projects and future projects,
therefore IPPF (Indigenous People Framework) is not prepared, and the project is
categorized as C for IP.

The ADB Policy on Gender and Development (1998) adopts gender mainstreaming as a key
strategy for promoting gender equity, and for ensuring participation of women and that their
needs are explicitly addressed in the decision-making process for development activities.
The new safeguard policy also reiterates the importance of including gender issues in the
preparation of safeguards documents at all stages to ensure that gender concerns are
incorporated, including gender-specific consultation and information disclosure. This
includes special attention to guarantee women’s assets, property, and land-use rights and
restoration/improvement of their living standards; and to ensure that women will receive
project benefits.

Another policy that has bearing on resettlement planning and implementation is the Public
Communications Policy (2011) that seeks to encourage the participation and understanding
of people and other stakeholders affected by ADB-assisted activities. Information on ADB-
funded projects should start early in the resettlement preparation phase and continue
throughout all stages in order to facilitate dialogue with affected people and other
stakeholders.

Principles of Land Acquisition and Resettlement Policy for the Project

The Policy on land acquisition and resettlement harmonizes relevant Indonesian laws and
procedures with those of the ADB-Safeguards Policy Statement (SPS) 2009. The
subprojects will avoid or minimize involuntary resettlement wherever possible by exploring
project and design alternatives. If unavoidable, efforts to enhance or at least restore the
livelihoods of all entitled parties to pre-project level, and to improve the standards of living of
the displaced poor and other vulnerable groups will be made.

Based on the above legal framework and equivalence gap analysis, the involuntary
resettlement objective and policy principles are set as follows:
(i). Screen subproject components during early stages to identify involuntary resettlement
impacts and risks indicators. These impacts and risks must be minimal, so that
appropriate resettlement planning should be developed precisely and accurately as a
result of a social assessment.
(ii). Carry out meaningful consultations with entitled parties particularly living in the project
areas, and concerned civil organizations. Inform all entitles parties on restriction to
access to natural resources as their sources of income, and ensure their participation
in the project cycle.
(iii). Improve or at least restore the livelihood of the entitled parties/APs through a)
landbased resettlement strategies or cash compensation at replacement cost for land;
b) prompt replacement of assets with access to assets of equal or higher value; c)
prompt compensation at full replacement cost for lost assets that cannot be restored;
and d) additional revenues and services through benefit sharing schemes where
possible.
(iv). APs without title or any recognizable legal rights to land are eligible for resettlement
assistance and compensation for non-land assets at replacement cost.
(v). Entitled parties shall be involved in resettlement planning and resettlement plan should
cover all appropriate mitigation measures to improve, or at least restore, the livelihoods
of all entitled parties, so that the living standard of entitled parties do not become
worse compared to pre-project levels. Resettlement plan should elaborate on their
entitlements, strategy for income and livelihood restoration, including institutional
arrangements, monitoring and evaluation, budgeting, and time-bound implementation
schedule. Provide entitled parties with appropriate assistance considering options
provided by the entitlement matrix.
(vi). Particular attention will be paid to women, women-headed households, the elderly and
other vulnerable persons including indigenous communities.
(vii). Disclose a draft resettlement plan and its updates to the entitled parties and other
stakeholders in a timely manner, in an accessible place and a form and
understandable language.
(viii). A well-defined, culturally acceptable and gender sensitive grievance redress
mechanism will be established in order to ensure that all entitled parties grievances
and complaints on any aspect of land acquisition and compensation are addressed in a
timely and satisfactory manner, and that all possible avenues are available to entitled
parties to air their grievances. Civil works and/or restrictions to use of land/coastal
resources will not commence unless entitled parties are fully compensated and all
other entitlements provided.
(ix). Civil works can proceed in any given construction works zone (CWZ) when the project
implementing agency through land acquisition implementation team has satisfactorily
completed payment of compensation for affected assets and nonassets and relocation
of entitled parties to new site, if any physical relocation, in accordance with the
approved resettlement plan.
(x). Any negotiated settlement will follow procedure in a transparent, consistence, and
equitable manner principles as set forth in the resettlement framework and be
confirmed through written record.
(xi). Monitor and assess land acquisition/resettlement activities and outputs, outcomes,
their impacts on the standards of living of entitled parties, and whether the objectives of
the resettlement plan have been achieved. Disclose the monitoring reports.
(xii). Should unanticipated involuntary resettlement impacts be determined during project
implementation, the PIU will ensure the conduct of a social impact assessment and
update the resettlement plan or formulate a new resettlement plan covering all
applicable requirements specified in the resettlement framework.

Strategy to address gender issues

The Project Gender Action Plan envisages entry points during differing phases of Project
implementation. In the Project Design and Monitoring Framework (DMF), gender
mainstreaming entry points, performance targets and indicators also extend to different
Subproject componentsof the Project that are provided in greater detail in the GAP.

Female representative of the AHs will be elected as member of resettlement-related

committees. In conducting the DMS, consultations on resettlement activities and relocation
options, both women and men will participate in the discussions. Specific to this resettlement
plan, the following specific actions are necessary to ensure the participation of women:
(i) Gender issues, including HIV/AIDS and human trafficking prevention measures, will be
included in the training to be provided during resettlement plan implementation.
(ii) Both husband and wife will be invited to receive the compensation and other allowances
due to the household for affected assets.
(iii) Women will be given equal chance in getting hired for unskilled labor and to receive
equal remuneration for the same work as the men.
(iv) Ensure that women will be prioritized for livelihood restoration program/income
restoration.
(v) Special measures will be taken in helping elderly, disabled and women-headed
households relocate or reconstruct their affected shops and houses.
(vi) Women will be prioritized in livelihood restoration program/income restoration.
(vii) Disaggregated monitoring indicators by gender will be developed for monitoring social
benefits, economic opportunities, livelihood, and resettlement activities.

Strategy to assist other vulnerable and severely households

As discussed in preceding sections, on top of compensation and allowances that vulnerable
AHs will receive for their losses as provided in the entitlement matrix, severely affected and
vulnerable AHs shall participate in the income restoration as crafted by the Serang Regency
Government that commenced in 2015 and still being implemented. Priority for severely
affected and vulnerable AHs to be employed in project-related jobs during the civil works is
likewise overseen by the Serang Regency Government. Specifically, the Regency has and
continues to provide since 2015, (i) employment services and opportunities for project-
related jobs as follows: (a) The work of cleaning and preparation of the land (the cutting of
trees/plants, soil excavation, stockpiling), (b) The embankment structure work (construction
of foundations, casting, installation of stones/bricks, stucco), and (c) The construction of
facilities and utilities (the construction of bridge, borrow pit, spillway, and sluice) and (ii)
livelihoods training as follows: (a) Entrepreneurship training for potentially affected people
who change their livelihoods; (b) Technical training on agriculture, livestock and fisheries
sectors; (c) The institutional capacity building for farmer groupsfor improving agricultural
production, business management and market access; (d) Training on improving micro and
small enterprises; (e) Training on cultivation of agriculture, livestock and fisheries; (f)
Training Skills: mechanics, sewing, and crafts; and (g) Joint Training: Entrepreneurship,
technical, cultivation, improving micro and small enterprises.