Oil palm plantations are often offered as “papers complete”. But those papers can mean very different things. One plot has a freehold certificate, another only a letter from the village head, and a large estate may sit on a company’s Hak Guna Usaha.

This guide is for anyone buying oil palm land in Kalimantan, from a smallholder plot to a large estate. It covers the papers you will likely see, what each one proves, and the documents to ask for before you pay.

Two layers: the land and the business

A plantation’s legal standing has two layers people often mix up.

The first is the right to the land. The proof can be a Sertifikat Hak Milik (SHM, the strongest freehold title), a Hak Guna Usaha certificate (HGU, a right to cultivate state land), or, for unregistered land, a possession letter such as a Surat Keterangan Tanah (SKT).

The second is the registration or licence for the farming business. A small plantation registers with an STD-B (Surat Tanda Daftar Usaha Perkebunan untuk Budidaya). A large estate needs a plantation business licence.

One does not replace the other. An STD-B without clear land papers proves nothing about ownership. A land certificate does not mean the business is registered either.

Smallholder plots: SHM, SKT and STD-B

A smallholder’s plantation usually sits on SHM land or on land that only has an SKT.

  • SHM is the strongest land right and only Indonesian citizens (WNI) can hold it, under the Basic Agrarian Law (UU No. 5 Tahun 1960). A sale is made by an Akta Jual Beli (AJB, the deed of sale) signed before a PPAT (Pejabat Pembuat Akta Tanah, a land deed official), then registered at the Kantor Pertanahan, the district land office. Where no PPAT is nearby, the camat can act as a temporary PPAT.
  • SKT, segel and sporadik are letters from the lurah, village head or camat that show who has held the land over time. Central Kalimantan also has the SKTA (Surat Keterangan Tanah Adat), issued through the customary institution (the damang). None of these is a land title. Our guide to SKT and segel letters explains them.
  • STD-B is the registration for plantations under 25 hectares, issued by the bupati or wali kota. Ask whether the plot has one. If not, ask the Dinas Perkebunan, or whichever regency office handles plantations, what registration needs.

If the land only has an SKT, the safe route is to record the sale officially, then register the land. That can be a first registration at the Kantor Pertanahan, or through PTSL (Pendaftaran Tanah Sistematis Lengkap, the government’s systematic registration program) if it is running in that village.

Large estates: HGU and the business licence

A plantation of 25 hectares or more needs a plantation business licence for cultivation (IUP-B), which now sits within Indonesia’s business licensing framework (perizinan berusaha). Estates that size are usually held by a company on HGU land.

An HGU is a right to cultivate state land for a fixed period. Under PP No. 18 Tahun 2021 it is granted for up to 35 years, extended for up to 25, then renewed for up to 35. Extension and renewal must be applied for and assessed. They are not automatic.

What to check on an HGU estate:

  • The remaining term of every HGU certificate, since one estate can have several.
  • Whether the HGU map matches the palms on the ground. Palms outside the HGU boundary mean part of the estate stands on other land: forest zone, village land or another company’s concession.
  • Any unplanted part of the HGU, and why. Local people may still claim it.
  • The plantation licence, including whether the licensed area matches the HGU and the planted area.

Forest zones, the problem that keeps coming up

Overlap with kawasan hutan (the state forest zone) comes up regularly with oil palm in Kalimantan. Forest zone status is set by the government’s maps. It does not depend on how long the land has been farmed or on a village letter.

Land inside the forest zone cannot simply be certified. The Job Creation Law (UU Cipta Kerja) added a settlement route for plantations that ended up inside it. That route has conditions, takes a long time, and no seller can promise the outcome.

Do not pay a clean-estate price for a plantation still waiting on that process.

How to check:

  1. Ask the seller for the GPS coordinates of the boundary, or record them yourself with a phone GPS app during the visit.
  2. Take the coordinates to the provincial or local forestry office to check against the kawasan hutan map.
  3. Open the parcel map in BHUMI, run by the Ministry of Agrarian Affairs and Spatial Planning (ATR/BPN), to see certified parcels nearby. Then ask the Kantor Pertanahan whether the plot can be registered.
  4. Ask whether the location overlaps an HGU or another company’s concession.

Peat plantations have an extra layer, since peatland management has its own rules. Ask the local environment or plantation office whether limits apply to that spot.

Plasma plots and ISPO certification

A plasma plot is tied to a partner company (the inti) and usually to a cooperative. The owner cannot sell it alone without the cooperative or the company being involved.

Before you make an offer on a plasma plot, ask:

  • Whether the cooperative and the inti company know about and agree to the sale.
  • Where the original certificate is now, and whether it is still tied to a plantation development loan.
  • How the fruit will be sold and paid for after the sale.

ISPO (Indonesian Sustainable Palm Oil) is the government’s sustainability certification for palm oil. It is mandatory for companies and is being extended to smallholders. For a company estate, ask for the ISPO certificate or a written note on its status. For a smallholder plot, clean land papers and an STD-B leave it better prepared if the obligation reaches smallholders.

Buying land or buying a company

A smallholder plot is bought like any other land. The AJB is signed before a PPAT and the certificate is transferred at the Kantor Pertanahan. The seller pays final income tax (PPh) of 2.5 percent of the sale value, and the buyer pays BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan, the land acquisition duty) under the local regulation.

An HGU estate is more often sold by taking over the shares of the company that holds it. The HGU stays in the company’s name. What changes is who owns the company.

You take on everything attached to it: debts, unsettled tax, disputes with local people, plasma obligations and any licence problems. That needs legal and financial due diligence with a notary and a lawyer, plus an accountant for the books.

Foreigners cannot hold SHM. Their route is through a company, which needs its own legal advice before any offer.

Documents to ask for

For a smallholder plot:

  • The seller’s KTP (ID card), family card and marriage book. A plantation bought during a marriage is joint marital property, so selling it needs the spouse’s consent.
  • The original certificate or SKT, with the village land register entry and the boundary sketch.
  • The boundary coordinates and the forest zone check result.
  • The STD-B, if there is one.
  • PBB receipts (Pajak Bumi dan Bangunan, the annual land and building tax) for the last few years.
  • Production records, such as weighbridge tickets from the mill or the collector.

For a company estate:

  • The deed of establishment and amendments, plus the current shareholders and directors.
  • The HGU certificates and maps, with the plantation business licence.
  • ISPO status and the environmental documents.
  • Plasma obligation documents and the cooperative agreements.
  • Financial statements, tax records and debts, including any HGU pledged to a bank.
  • A list of disputes with local people, contractors or other companies.

What to do next

A safe order is to gather the documents, check them with the Kantor Pertanahan and the forestry office, inspect the plantation, then work out the numbers. For the visit, use our oil palm plantation inspection checklist. For the numbers, read how to calculate an oil palm investment.

The plantations Vorneo is marketing in Kalimantan are on our oil palm plantations for sale page.