Nominee Arrangement in Co-operative

In the practice of land asset ownership by Cooperatives, there are still Cooperatives that commit irregularities through Nominee Arrangement (borrowing names). I actually found the Nominee Arrangement in 2 (two) Co-operatives located in East Java Province.

In other words, I do not intend to corner the cooperative stakeholders, but rather try to show the Nominee Arrangement, there is a gap between the normative and the practice in the field. Therefore, in order to safeguard the confidentiality and interests of the Cooperative concerned in this paper, it is sufficient for me to mention the position of the Cooperative concerned only.

One of the Cooperatives located in Mojokerto Regency to recognise the ownership of Cooperative assets in the form of land through the creation of a Deed of Contra Letter Statement (Nominee Arrangement). The deed contains a unilateral statement that the title deed contained in a Certificate of Title (Nominee Arrangement) registered in the name of one of the Management is an asset owned by the Cooperative concerned.

Furthermore, one of the cooperatives located in Malang City recognised the ownership of cooperative assets in the form of land and buildings by making a Deed of Nominee Arrangement. The Deed of Nominee Arrangement contains an agreement between the Cooperative and one of the administrators whose name is borrowed to be included in the Certificate of Title as the Certificate is one of the evidence of the Cooperative's property rights concerned even though the Certificate is in the name of one of the Administrators.

Both Cooperatives in the practice of Nominee Arrangement as the basis of ownership of Cooperative assets involve the role of Notary to make the deeds referred to earlier. The Notary concerned in exercising his authority should be obliged to provide legal counselling related to the making of deeds with the purpose of Nominee Arrangement on land plots is a prohibited causa.

The Indonesian legal system does not allow the practice of Nominee Arrangement for immovable property in the form of land through Article 26 paragraph (2) of Law No. 5/1960 on the Basic Regulation of Agrarian Principles (PA Law). The Supreme Court in its stance also did not recognise the practice of Nominee Arrangement on ownership of land parcels. This is based on SEMA No. 10/2020 concerning the Implementation of the Formulation of the Results of the Plenary Meeting of the Supreme Court Chamber in 2020 as Guidelines for the Implementation of Tasks for the Courts.