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VIII. Inadequate Compensation

Basically we are…offering alternatives, but the problem is that [the people] are demanding compensation. But we see that compensation should be related to [registered property] rights, not occupation.

—Jornal Effendi Siahaan, Deputy Head of Department for Public Order and Community Protection ²³¹

The evictions have increased our poverty and made us into homeless people.

—Budi Santoso, a tailor in his forties²³²

The Jakarta government is repeatedly failing to provide adequate remedies for evicted residents’ loss of property, whether it is the loss of rights over land seized or the destruction of property in the form of a home or personal belongings. Failing to provide fair market value or replacement cost compensation for land or property confiscated or destroyed amounts to stealing from the city’s poor. The financial loss to evicted residents is not limited to their property, however, but also includes the value of their existing business ventures in the destroyed community and the disruption to their sources of income caused by the displacement. An adequate compensation package must therefore take into account not only the loss of land, buildings, and personal property, but also the disruption to an individual’s income.²³³

In some instances investigated by Human Rights Watch, evictees received absolutely no compensation at all. In other instances, residents complained that the compensation offered to them was insufficient to find adequate or comparable alternative housing. We found no instances where the government paid compensation for loss of income in the case of properties used for family businesses, or income losses caused by other disadvantages related to displacement.

Coercion and Lack of Consultation in the Compensation Process

The current legal regulations in Indonesia on compensation for land acquired for public interest projects require that the government negotiate with affected communities for 120 days (recently extended from 90 days, the applicable period at the time of our interviews with evictees), after which point the government may seize the land and the level of compensation then becomes a matter to be decided by the courts.²³⁴ Some residents noted that government officials used this provision to pressure them into accepting an unfavorable settlement on compensation, because residents felt they could not sustain themselves while waiting for the outcome of a court case once they had already been evicted. Adi Saleh tried to negotiate the level of compensation for his land which is to be seized for the East Canal Project, but when he tried to object to the money offered, he tells us: “The mayor informed me of the legislation, saying that if I didn’t take the money offered then I’d have to go to court.”²³⁵

Residents who were already evicted before they were offered compensation found themselves in a very difficult position to negotiate. As Suryo Witoelar explained: “Because the community was living in tents [following the eviction] and had no food, that forced the community to accept the money even though it was [inadequate].”²³⁶

Government officials sometimes also intimidate residents into agreeing to compensation. Irwan Naibaho, who at the time of our interview was due to be evicted for the East Canal Project, told us about the experiences of members of his community:

A lot of intimidation happens, but one example of it is my neighbor, who is insisting on staying in his place. One day, an officer in military uniform came and intimidated him by saying, “Oh, so this is the guy who does not want to move.” Because my neighbor is so afraid, he called me, and I went to my neighbor’s house. When I went there, I met the officer, and I asked him, “Who are you? Where are you from? From what institution? Where is your ID? Are you from the office of the head village official?” And he said “No,” that he was coming from one of the military institutions. And then I said, “if this person still wants to stay where he is, then that is his right.”.…The military guy said that he was only doing what his commander had asked him to do it.²³⁷

No Compensation

Human Rights Watch met with some individuals to whom the government had offered no compensation at all. The community we visited in Cikini received no money for the destruction of their homes by public order officials in March 2005. Soleh Atmaji, who had lived in the community for seven years, told us: “We’ve received no compensation for the goods taken during the eviction.”²³⁸ Another community member, Sri Suharti, who has lived there for five years agreed: “We received some help from some of my friends. Some brought clothes. But from the government, nothing at all.”²³⁹

Sometimes, even though local officials promise compensation, it is not actually paid. Arif Wijayanto, a forty-three-year-old part-time laborer, told us about the experiences of his community at Teluk Gong: “Some of the community was given compensation of Rp. 500,000 [US$50] per family. Even that money was not enough for us to move…But only about 30 percent of the community got their compensation, and after that [the government] said they’d run out of money, but [those who didn’t receive the compensation] were still evicted.”²⁴⁰

A former lawyer who worked for evictees from a site in Tanjung Duren explained to Human Rights Watch the situation of his clients: “It was in the news that [the local government] would offer alternative housing, but that didn’t happen. No one got any money. The Social Department also offered Rp. 200,000 [US$24], but [the community] didn’t receive that either.”²⁴¹

We also met with some communities that were offered minimum levels of compensation, but individuals felt pressured either by local officials or their fellow community members not to accept the compensation as it was deemed too low. Some ended up receiving nothing all. Sujatmi Wadud, a twenty-three-year-old mother of one, explained this situation to us: “[I’ve received] no compensation. Before the eviction, there was an offer, but [the local neighborhood official] said we shouldn’t take it, and also the people didn’t want to take it. The money didn’t cover our needs. It was Rp. 500,000 [US$59] or maybe Rp. 300,000 [US$36].”²⁴²

Lusiana Annga, told us of pressure from some members of her community not to accept compensation when she was evicted from Jembatan Besi:

First of all they said they were going to compensate Rp. 1,100,000 [US$130] for permanent houses, and Rp. 600,000 [US$71] for non-permanent housing. The [head village official] told us this. They told us we had to take money there [at his office]. But Rp. 600,000 [US$71]? What can we do with it?…I didn’t ask [for the compensation]. The others didn’t take it. If the others had taken it, at once if the others took it we’d have the courage to take it. I didn’t want the other people to think “how dare she take the compensation?” But we had to be united. If I was not united then the people could hate me.²⁴³ At the end of the day we didn’t get a penny.

This decision by some community members to refuse compensation on the grounds that what the government was offering was so inadequate was perhaps a negotiation tactic pushed by some leaders within the community.²⁴⁴ An advocate who used to work with the community from Jembatan Besi told us that as a result of this pressure from certain community members: “They didn’t get any compensation. The [head village official] only gave them a box of rice to eat. He gave enough for only three days.”²⁴⁵

Low Compensation

When evicted residents do receive some monetary compensation, frequently the amount given is small in comparison to the value of the property lost, let alone the financial costs of moving and the interruption to residents’ livelihoods.

The Chairperson of Indonesia’s National Human Rights Commission’s sub-commission on economic, social, and cultural rights, told us: “Compensation that is being given by the Jakarta government is very low, about Rp. 500,000 [US$56] per family.”²⁵² As an NGO advocate who is himself an evictee told Human Rights Watch: “That’s not appropriate compensation…Rp. 500,000 isn’t even enough to hire a car to move people’s belongings. So many people remain on the land to try and find a solution that [works for them].”²⁵³

Because homes had already been destroyed by the time Human Rights Watch met with evicted residents, we were unable to obtain market value assessments for properties. Instead, we asked many evicted residents to compare the amount of money they received in compensation to the cost of purchasing and moving to a comparable dwelling. Chahaya Utari told us that the compensation he received lasted only four months:

I received Rp. 6,100,000 [US$611]…I used the money to fulfill my daily needs—for food. Even in the village if you want to build a house you need at least Rp. 30,000,000 [US$3,007] for a proper house. [The money] lasted four months. I used it also for schooling, because I had to move my children. So I had to use it wisely.²⁵⁴

The compensation Hariadi Tadj received for his eviction from his home in Cakung Cilincing would be sufficient to cover nearby alternative accommodation for just over one year: “I’m now renting a house near here. We pay Rp. 300,000 [US$30] per month. I received Rp. 5,000,000 [US$495] in compensation.”²⁵⁵

Irwan Naibaho fretted about the amount the government proposes to compensate him for surrendering his land for the East Canal Project: “How would you afford to buy a new house with Rp. 802,000 [US$89] per square meter? Maybe you could buy land in the [far away] hill areas for that price.” ²⁵⁶

Budi Santoso, whose house was demolished in early 2006, received more compensation than many people with whom we spoke. But even he told us: “If I had to buy a new house, this Rp. 16,000,000 [US$1700] is not enough. I would need Rp. 50,000,000 [US$5335] and that would just be for the house, [not to mention] for the land.”²⁵⁷

One resident who is scheduled to be evicted because of the East Canal Project, Siringo Ringo, showed Human Rights Watch letters from a real estate developer offering to sell on the open market neighboring land unaffected by the East Canal Project for between Rp. 2,000,000 (US$220) and 2,500,000 (US$275) per square meter.²⁵⁸ In contrast, the government was offering Siringo Ringo and his affected neighbors just 57 percent of this amount, Rp. 1,147,000 (US$126) per square meter. This demonstrates that the residents who will be displaced by the East Canal project will be unable to buy a comparable property given their current level of compensation. “How can I buy a nearby place, when land nearby is already Rp. 2,500,000 per meter?” he asked.²⁵⁹

Siringo Ringo was particularly upset because administration officials had publicly declared in 2003 that residents displaced by the East Canal Project would receive compensation of between Rp. 1,500,000 and Rp. 1,800,000. “And we’re wondering how has the [value] gone down?”²⁶⁰ he exclaimed. Moreover, although the regional government’s Office for the Planning of Structures and Buildings issued guidelines in 2004 citing the amount of compensation due for buildings in Jakarta, when the assessments for housing to be affected by the East Canal were released by the same office and the mayor of East Jakarta in 2005 values for most forms of building structures had dropped to an average of just 69 percent of even the minimum amounts originally prescribed by the regional office.²⁶¹ The decrees provide no explanation for the reduction in compensation.

Compensation Reduced by Government

Even when the government offers residents compensation, residents may sometimes lose part of their money to dubious “commissions” or “taxes” taken by local government officials. In other instances, the standards established by the government to assess and disburse compensation are flawed and result in less than adequate compensation.

Kersen Saptono, who was evicted from a site in Cakung Cilincing in September 2005, did receive some compensation after he was evicted from his home of more than thirteen years: “We got the money after the eviction. Rp. 10,000,000 [US$990]. But the [local neighborhood official] took a cut from the compensation of Rp. 3,000,000 [US$295], so I only got Rp. 7,000,000 [US$693].”²⁶⁶

Adi Saleh, whose house is scheduled to soon be demolished to make way for the East Canal Project, lost money to a “tax”: “They measured the land, and gave it a…valuation of Rp. 1,147,000 [US$113 per meter squared] and then they cut that with a 10 percent tax…The government took [the 10 percent].”²⁶⁷ Participants at a meeting of affected communities attended by Human Rights Watch also expressed concern and uncertainty over the government reducing payments related to the East Canal Project.²⁶⁸ Human Rights Watch has been unable to confirm whether these “commissions” or “taxes” are officially prescribed. Nonetheless, even if they are legally provided for, the impact of imposing a tax on already low amounts of compensation is that the compensation can not be considered adequate, despite the government’s assertion to the contrary.

In compensating people for land being acquired for the East Canal Project, the Jakarta administration is varying the level of compensation depending on what kind of proof of ownership individuals have over their land. As one resident worried:

I have girik [not yet certified] land, and I’m worried about compensation. I heard that if you have a hak milik [owner] certificate then you get 100 percent compensation, but if you have a akte jual beli [proof of transaction document], you only get 90 percent compensation. I feel disappointed and unsatisfied. It’s a government project, so the government is expecting the community to help them with this project. So, in return, we also expect the government to help us out.²⁶⁹

This system penalizes landowners merely because the government has not yet registered their land. Another resident soon to be evicted for the East Canal Project asked: “Why in the mayor’s process do people with a land certificate get 100 percent of [the assessed price] while people with tanah adat [customary land] get 90 percent…when they all pay the same amount of land taxes?”²⁷⁰

Another fundamental flaw in the Jakarta administration’s policy for assessing the value of compensation for people displaced for the East Canal Project is that they are tying compensation to a value known as Nilai Jual Obyek Pajak (NJOP), which is a government-appraised valuation for calculating land taxes. The recent Presidential Regulation on Land Acquisition specifies that one of three factors that should be taken into account when calculating compensation for land taken for public interest projects—along with the market value of the building and crops on the land—is the “NJOP or real/actual value of the land.”²⁷¹ However, as a representative from the World Bank in Jakarta informed us: “There is a big gap between NJOP and market values.”²⁷² The Bank recently estimated that NJOP on average tends to be 40 to 50 percent less than the actual market value.²⁷³ Even the government appears to recognize this disparity, as it prints a statement on the back of its tax letters that the “NJOP” value cannot be used to determine the price of the land, but only to determine the amount of tax.²⁷⁴ By relying on NJOP valuations rather than actual market rate valuations or replacement costs, the government is systematically under-compensating at the expense of the residents.²⁷⁵

Corruption in the Compensation Process

In numerous testimonies collected by Human Rights Watch, residents described being asked to sign blank receipts or receipts for amounts larger than they actually received. As already noted, several people also said that local officials demanded a portion of the compensation. The result is that residents are not receiving their full entitlement to compensation, and that other intermediaries and public officials are instead profiting from the evictions.

We interviewed Lena Arbali while she was sitting on her rain-soaked mattress under a temporary shelter where she had been living for a week since her eviction. Government security forces demolished her home in Jatinegara, East Jakarta, to make way for the “Double-Double Track” project. She told us:

Yes, I received compensation. I signed a receipt for the value of Rp. 27,000,000 [US$3,045] but I only received Rp. 15,200,000 [US$1,715]. But then the local village official asked me for Rp. 1,600,000 [US$180]. I don’t know why. I gave it to him, I gave it to him because I was under pressure from the government because we were threatened that if we didn’t give Rp. 1,600,000 [US$180] we would have to get compensation in court. The local village official told this to all the people…The officer from the transportation department gave me the money, and it was he who gave me the receipt to sign. I didn’t ask [for the full amount of money stated on the receipt] because I knew that the other people who asked were refused it by the government and I was scared I’d have to go to court or be taken to the police.²⁷⁶

Lena’s neighbor, sixty-one-year-old Ira Netra, told us: “I only received half [compensation]. The government promised Rp. 42,000,000 [US$4,738] but I only received Rp. 21,000,000 [US$2,369]. A letter sent by the government promised Rp. 42,000,000 [US$4,738]. A [local official] gave me the money. I didn’t ask him why only half the compensation, I just followed what the other people did.”²⁷⁷ Residents first reported these problems to the Corruption Eradication Commission in August, 2005, but they have received no reply or remedy, illustrating the lack of access to an effective remedy to challenge their exploitation by corrupt officials.²⁷⁸

Human Rights Watch also learned of bribery in the process of determining levels of compensation. Public order officials collected payments to expedite administrative processes. Some also extracted bribes before they would pay evictees proper compensation. In one case, a resident said that he had initiated the bribery knowing that, without “helpers,” his property likely would have received a low, inadequate valuation:

I had to give a commission—willingly—to middlemen,²⁷⁹people who offered to help. I paid them, but I promised not to tell on them. I gave some people Rp. 4,000,000 (US$450), and others Rp. 2,000,000 (US$225). Different people, different places…It was a token of gratitude for people who helped me by making the process be done quickly. I was the one who insisted to give the money, because at first the people refused to take the money. But in the end, they accepted the money. And we got fast service. We got prioritized first. I paid the people who carried out the [assessment and compensation] process…I also paid someone to assess my land as being bigger than it is.²⁸⁰

Ali Sadeh went on to admit that he paid a government evaluator to assess and grade his house at a higher level for compensation, not as a “fifth class” house (the most basic category of permanent house), but as a “third class,” medium quality, house.

A neighbor of Ali Sadeh’s suggested to us that payments to government valuators are not always entirely voluntary. Tommy Rustanto told us:

There is this [middleman/broker²⁸¹]who is asking to take money from the people to measure the land and the house. For me, that does not go along with the rules…It doesn’t go that you are paying to have your house and land measured. It’s not stated in the regulation that they can ask for money. This [local government] has actually been provided a budget for this field office, for the people doing the measurement.²⁸²

Numerous interviewees who worked for the Jakarta government, NGOs, and international financial institutions also complained about the involvement of land speculators profiting from using confidential and privileged information.²⁸³

Provision of Inadequate Alternative Land

In three of the incidents of forced eviction investigated by Human Rights Watch, the Jakarta administration gave the evicted communities the option of moving to alternative land or accommodations instead of taking monetary compensation. The United Nations’ Human Rights Commission has noted that, as an alternative to monetary compensation, governments may provide “appropriate and sufficient alternative accommodation or land, consistent with their wishes and needs, to persons and communities that have been forcibly evicted.”²⁸⁴ However, in all three incidents, residents of the affected communities found the alternative land inadequate given their chosen livelihood pursuits.

In 2001, government forces evicted the community of fishermen in Ancol Timur from their homes so that a yacht club and a sports club could be built on the North Jakarta coastline. The government offered the fishermen either Rp. 6,100,000 (US$613) or alternative housing in a different area. Santoso Mulyani, a sixty-one-year-old fisherman, explained to Human Rights Watch the problems with the land offered:

They offered a place called Marunda, but they were only providing shelter, not a house…[And] it was far from the sea…The previous area [where we lived before the eviction], it was really near the sea; you could just open your door….We depend on the boats for our living, so if you stay far from the sea it’s useless.²⁸⁵

Chahaya Utari, a fellow fisherman from the Ancol Timur community, who now sleeps on his boat, told Human Rights Watch why he did not accept the alternative land:

The problem with the alternative place was that it was five kilometers from the sea, and you couldn’t monitor the weather out at sea, and we would find it difficult to remove our boats from the sea at [the closest] point on the coast…At that alternative place you would have to fight the wind and the ocean. ²⁸⁶

At another eviction site, Pondok Kopi in East Jakarta, the government offered residents land owned by the state-owned housing company. “But the location was very far away from the current location,” an NGO advocate who worked with the community in 2001 informed Human Rights Watch, and was therefore far from residents’ existing livelihood activities.²⁸⁷ Accepting the social housing also required an advance payment by residents to the state-owned housing agency of Rp. 1,300,000 (US$130) and installments of Rp. 170,000 per month (US$17).²⁸⁸

In the case of both Ancol Timur and Pondok Kopi, some of the residents who took the alternative land found their livelihoods unsustainable and returned to their original site of residence. Santoso Mulyani, a fisherman from Ancol Timur, initially accepted the alternative land, but by the time Human Rights Watch interviewed him, he was living in an informal shelter on the side of the road close to the coast and near the site of his old fishing village. Santoso explained to us:

I took the alternative facilities…I moved in…. [But] you have to take three forms of transportation to get to the sea from Marunda. And it’s more [a problem] about where to put your boat. I worry about the condition of my boat. Here it’s only 300m away. So if something happens to the boat [it’s close]…[There] someone could take the engine from the boat and you wouldn’t know.²⁸⁹

Former residents of Pondok Kopi who accepted the alternative land faced similar problems pursuing traditional livelihoods and therefore returned to their original site. Of the sixty-eight families evicted from Pondok Kopi, only fifteen moved to the land offered in Parung Pajang, in West Java. But, as an NGO advocate for the community explains, “the fifteen families  have their place [in Parung Pajang] but they still live in Pondok Kopi because Parung Pajang is too far from their work.”²⁹⁰

In the case of the residents evicted from land in Cengkareng Timur, East Jakarta, in 2003, the government also failed to offer viable alternatives. Following the eviction from land claimed to be owned by the state-owned housing company, Perum Perumnas, the company gave residents two options for alternative sites.²⁹¹ The first option was for the former residents to buy a Perum Perumnas house in Parung Pajang district, outside of Jakarta, for a discounted price of Rp. 14 million (US$1,647). Considering that the residents received no compensation for the loss of their original housing, even these discounted apartments were pricey. The apartments were also far from existing work and family ties for some residents. Moreover, the apartments offered by the government had yet to be built.²⁹² This offer cannot be said to have constituted an adequate alternative.²⁹³

The second alternative accommodation offered was to rent low-cost apartments to be built on the site of the cleared land, where residents were promised they would only have to pay Rp. 100,000 (US$12) per month to rent. Again, however, the apartments had not yet been built. In fact, when Human Rights Watch visited the site in 2006, two-and-a-half years after the eviction, no new Perum Perumnas housing had yet been built.