State Capital Act 2023

The 2023 State Capital Act (Undang-Undang Ibu Kota Negara/UU IKN 2023) is an omnibus bill to amend the previous Law on State Capital, a piece of law to relocate capital of Indonesia from Jakarta to Nusantara at East Kalimantan as new capital of Indonesia. Introduced on 21 August 2023, the omnibus bill was passed into law on 3 October 2023. The law intended to amend and expand the power given to the Nusantara Capital City Authority (OIKN).

The bill was approved with almost all fractions in People's Representative Council (DPR). In unusual move, Democratic Party one of two opposing parties opposing Joko Widodo administration also supporting the law. Only Prosperous Justice Party rejected the law passage.

Changes and Amendments
There are 9 changes to the Law on State Capital introduced by the bill:


 * Specialized Authorities
 * Agrarian Affairs Autonomy
 * Financial Management
 * Position Filling
 * Update on Areal Delineation, resulted in changes on Nusantara's area
 * Housing Affairs Autonomy
 * Spatial Management
 * Relationship and Partnership between OIKN and DPR
 * Assurance for Sustainable Development.

Notable Changes
Some notable changes are:

Expansion of the Nusantara Capital City Authority' powers
The new bill expanded the power of the Authority to include investment licensing, easing businesses, providing special facilities to funders of Nusantara facilitators, its developers and its satellite areas.

Agrarian affairs autonomy
The new bill granted special agrarian affairs to the Authority to manage land use and spatial management within Nusantara.

Position filling autonomy
The new bill granted autonomy to the Authority to fill the Deputies and/or other high positions within the Authority with non-state apparatus experts. Thus, making the Authority having "mini cabinet"-like structure similar to the Presidential Cabinet.

Financing autonomy
The Authority granted power to issue bonds and securities to provide funding for Nusantara development. It also granted power to the Authority to make foreign loans with permission of the Ministry of Finance.

Extremely long cultivation rights and building use rights to the Investors
The law granted 190-years cultivation rights to anyone who invest in Nusantara. The 190-years cultivation rights not given at once but given by 2 cycles with each cycle has 95 years long. The law also granted 160-years building use rights to anyone who invest in Nusantara, given by 2 cycles with each cycle has 80 years long.

Status of Nusantara Capital City Authority assets
The Authority assets' status is much like treated in manner similar as state-owned enterprises rather than state-owned government institutions. As result, it may purchasable, exchanged, granted, or being included in equity capital for funding Nusantara development.

People Representation within Nusantara
By the law, future Nusantara people representation is solely exercised by members of Commission II of the DPR. There will be no representatives for Nusantara region in local or regional level.

"Sweeper" Article 42
Article 42 of the law noted as "omni-sweeper article", because its sweeping power in cancelling of any effects of regulations and laws that may limit or obstruct the capital relocation. Many legal experts condemned the article because its perceived unconstitutionality and accused the Joko Widodo administration as pro-Investor.

Criticism
Only Prosperous Justice Party condemned the passage of the law in parliament.

Indonesian Legal Aid Foundation condemned the passage of the law, especially because the sweeper Article 42, condemning the passage as unconstitutional.