When Land Administration Becomes a Criminal Matter

The Corruption Eradication Commission (Komisi Pemberantasan Korupsi/KPK) conducted a sting operation (OTT) on 14 September 2026 concerning alleged corruption in the processing of Building Use Rights (Hak Guna Bangunan/HGB) held by PT Summarecon Agung Tbk in Bogor Regency. The following day, the KPK designated eight suspects, including the President Director of PT Summarecon Agung Tbk and several officials and private-sector parties allegedly involved. The KPK also seized evidence valued at approximately IDR 106.3 billion.

According to the KPK’s preliminary case construction, the matter originated from a land dispute between Summarecon and several heirs, which subsequently became connected with the blocking of nine HGB Certificates (SHGB) held by Summarecon. In the process of lifting the block and subdividing the HGB, the KPK suspected that a payment of IDR 2 billion had been requested, which was subsequently agreed at IDR 1.5 billion. The money was allegedly handed over to an intermediary on 27 August 2026.

This case demonstrates that issues in land administration do not always end with whether the documents and land rights have satisfied the applicable requirements. The manner in which a company conducts such processes may also give rise to criminal risk where there are payments or actions intended to influence the exercise of an official’s authority.

So, where is the line between legitimate administrative fees and a payment that may develop into a criminal matter?

From Land Dispute to HGB Processing

According to the KPK’s preliminary case construction, the matter originated from a dispute over land that subsequently resulted in nine of Summarecon’s SHGBs being blocked. Summarecon was then said to have requested assistance in lifting the block and subdividing the HGBs.

In the process, the KPK suspected that a payment had been requested. The KPK stated that in early August 2026 there had been communications concerning a request for IDR 2 billion to lift the block on the nine SHGBs. Summarecon was then said to have agreed to IDR 1.5 billion, which was handed over on 27 August 2026.

Accordingly, the legal issue becomes more specific: can a payment relating to a land administration service or decision be categorized as a prohibited payment if it is intended to influence the exercise of an official’s authority?

When an “Administrative Fee” Becomes a Criminal Matter

Law Number 31 of 1999 concerning the Eradication of Criminal Acts of Corruption, as amended by Law Number 20 of 2001, regulates various forms of bribery offenses involving civil servants or state officials.

Article 5 paragraph (1), in essence, regulates the giving or promising of something to a civil servant or state official with the intention that such official perform or refrain from performing an act contrary to his or her duties, as well as the giving of something in connection with the official’s duties. The KPK also explains that bribery and “facilitation payments” may fall within this provision where the elements of the criminal offense prescribed under the Anti-Corruption Law are satisfied.

This means that the issue is not merely whether the money is described as a “fee,” an “administrative fee,” or by another term. What must be examined is whether the payment was made pursuant to an official bill or provision of the state and paid into the state treasury. Accordingly, the status of a payment is determined not only by the terminology used, but also by the basis for the charge, the party receiving the payment, and where the payment is deposited.

In the Summarecon HGB case, the KPK stated that the IDR 1.5 billion was related to a request to lift the block and process the subdivision of the HGB. The KPK also stated that IDR 200 million of that amount was subsequently given to the Head of the Bogor Regency Land Office.

As the case remains at the investigation stage, this construction remains an allegation that must subsequently be proven through the legal process.

Risk Does Not Stop at Individuals

This case is also notable because one of the suspects announced by the KPK is the President Director of PT Summarecon Agung Tbk.

This raises another question: to what extent can an act carried out in the interests of a company give rise to criminal liability for the company or its management?

The Anti-Corruption Law has in fact provided for such a possibility. Article 20 paragraph (1) stipulates that where a corruption offense is committed by or in the name of a corporation, prosecution and the imposition of criminal penalties may be brought against the corporation and/or its management. Article 20 paragraph (2) also provides that a corruption offense may be deemed to have been committed by a corporation where it is committed by persons based on an employment relationship or other relationship acting within the corporate environment.

Accordingly, the involvement of a corporation as a party to a transaction does not, in itself, eliminate the criminal risk attaching to either individuals or the corporation.

Conversely, the involvement of a member of management in a case does not automatically mean that the corporation has committed a criminal offense. Such liability must still be assessed based on the construction of the case, the relationship between the conduct and the interests of the corporation, and the evidentiary establishment of the elements of the criminal offense.

It Is Not Only About the Validity of the HGB

The Summarecon HGB case remains under investigation. The KPK has continued to conduct searches to complete the evidence, including at Summarecon’s office on 18 September 2026.

The KPK has also stated that it is continuing to investigate the possible involvement of other private-sector parties and other alleged corruption within the ATR/BPN, including in connection with other land administration services.

Therefore, it is premature to draw conclusions regarding the criminal liability of each party. Nevertheless, this case demonstrates that legal risks in land transactions do not stop at the validity of land rights, but ensuring that every process for administering land rights is conducted through an accountable channel, with authority, payments, the use of third parties, and approvals properly documented.