Borobudur Law and Society Journal

Since 29 May 2006, hot mud erupting from the drilling site of PT Lapindo Brantas in Porong, Sidoarjo, has submerged homes, farmland and industrial land and left the owners’ rights uncertain, which engages the protection of property in Article 28H(4) of the 1945 Constitution. This article asks which rights to land the mudflow affected, whether Article 27 of the Basic Agrarian Law, under which ownership ends when land is destroyed, defeats the owners’ claims, and who owes compensation and on what legal basis. It is normative legal research that uses statutory, conceptual and case approaches to legislation, court decisions and scholarship, analysed qualitatively; no interviews or fieldwork were conducted. The analysis finds that the mudflow impairs ownership (hak milik), building rights (HGB) and cultivation rights (HGU); that Article 27 does not extinguish the claims, because it presupposes natural destruction while the cause of this event was contested and the state itself treated the rights as continuing; and that compensation rests on separate bases, namely the company’s obligations under Presidential Regulation No 14 of 2007 and tort liability, and the state’s budgetary and supervisory duties. Payment remains partial and disputed. Compensation should reflect the full replacement value of the rights lost, with the state guaranteeing payment where the company does not.