More than 20 developers from Batam are in a quandary over the legal status of their Rp 2 trillion (US$196 million) property projects built in a protected forest area, according to classifications by the Forestry Ministry.

The issue emerged after the Batam branch of the National Land Agency (BPN) in August 2006, forbade all public officers and other relevant agencies from issuing land sale certificates for properties built in protected forests without proper land use permits.

That policy has affected 20,000 houses built in 20 different locations in the 200-hectare protected forest area.

"There are around 20,000 houses that we cannot sell because notaries are not allowed to issue sale deeds to consumers *because* the area has been classified as protected," Mulia Pamadi, chairman of the Batam branch of the Indonesian Real Estate Association (REI) and president director of PT Mulia Realty Batindo, one of the developers, said Wednesday.

"We were never informed *about that matter*. Now the projects are in gridlock and developers will face many complaints from consumers."

He said developers had been running the projects in accordance with principle licenses issued by the Batam Industrial Development Authority (BIDA), which is now the Batam Free Trade Zone Management Body (BPK-FTZ Batam).

The BIDA issued the principle licenses, based on a 1977 forestry ministerial decree on land management and use in the industrial island of Batam, which was reaffirmed by a 1993 national land agency decree.

The issue escalated in 2000, when the Batam City Administration was formed. At that time, the Batam City Administration and the Batam City Council enacted an ordinance on spatial planning in Batam.

Recently, on June 8, 2009 more than 500 households from the Villa Muka Kuning housing complex staged protest rallies at three different locations, one in front of a developer's office, another at the Batam City Council and the third at Batam's Bank Tabungan Negara.

Protestors demanded the bank hand over house ownership certificates that belonged to the buyers who had paid off their installments.

BPK-FTZ Batam spokesman, Dwi Djoko Wiwoho, said that an independent team was conducting a study to resolve the legal issue related to the problematic permits.

The team, set up by the Forestry Ministry, consists of representatives from the Indonesian Institute of Sciences, the National Land Agency and academics, he said.

"In anticipation of the complicated legal procedure, we have proposed land replacements.

"We have asked the developers and consumers to wait patiently for the solution," added Djoko. (Source : Jakarta Post)