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Closure of PARQ Ubud: Authorities Crack Down on Illegal Land Development Amidst Stricter Regulations in Bali

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Closure of PARQ Ubud Marks Turning Point for Bali’s Development Regulations

Ubud, Bali — January 20, 2025 — PARQ Ubud, a prominent residential and creative hub in Bali, was officially shuttered on January 20, following a series of regulatory infractions. The closure comes after authorities issued temporary closure notices in November 2024 and highlights the ongoing efforts by local officials to enforce compliance with land use and environmental laws.

Allegations of Regulatory Violations

Founded by Andrej Frey, a 53-year-old German national, PARQ Ubud had garnered a reputation for attracting a sizable Russian expatriate population, often referred to colloquially as the “Russian Village.” However, Frey’s extensive development of the property has come under scrutiny for violating various business and environmental regulations. The Bali Police Chief, Daniel Adityajaya, confirmed that Frey was taken into custody on January 24, in connection with allegations of the “illegal transfer of land functions.”

The 1.8-hectare PARQ Ubud site was reportedly built on land classified under Indonesian law as Zone 1 Protected Rice Field Land (LSD) and Sustainable Food Agriculture Land (LP2B). Such classifications strictly prohibit commercial development without proper permits and environmental impact assessments. Despite these requirements, the site has grown to include a 103-room hotel, residential spaces, co-working offices, gyms, and restaurants.

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Investigative Background

Prior to the closure, the site had been under investigation since April 2023 when immigration authorities raised concerns about the use of visas by various residents. While no immediate violations were found at that time, subsequent inquiries led to the uncovering of deeper regulatory breaches linked to land usage.

Chief Adityajaya stated during a press conference, “The land had been transferred from sustainable agricultural purposes to commercial use, which is not permitted.” He noted that the Gianyar Regency government lost significant productive land due to these violations, with approximately 1,845 hectares reported to be lost on a broader scale in Gianyar.

Official Statements and Consequences

Frey, the mastermind behind multiple companies including PT Parq Ubud Partners and PT Tomorrow Land Development Bali, was paraded in front of the press in handcuffs, dressed in prison attire. This dramatic presentation underscores the severity of the situation, as authorities aim to send a clear message regarding compliance with land and business regulations.

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In elaborating on the closure, I Ketut Pasek Lanang Sadia, the Assistant of the General Administration of the Gianyar Regency Secretary, stated, “The closure was conducted in accordance with Regional Regulations and after several compliance checks.” He referenced Article 19, paragraph 3 of Gianyar Regency’s Public Order Regulations, indicating that the business operations were unlawful.

Implications for Foreign Investments

The closure of PARQ Ubud may represent a significant turning point for foreign-owned properties in Bali. Officials, including former Deputy Governor Cok Ace, have indicated that they are prioritizing regulatory compliance in an effort to protect the island’s agricultural land and ecosystems. Cok Ace warned that many such developments may face similar scrutiny in the future, stating, “While we try to be orderly, foreign companies often do not follow the rules, which affects local competition and tax revenues.”

As Bali navigates the challenges of rapid development, the fate of PARQ Ubud serves as a critical reminder of the importance of adhering to legal frameworks aimed at preserving the natural and cultural integrity of the island. The impact of this closure will likely ripple through Bali’s expatriate community and foreign investment landscape in the coming months, as authorities intensify their crackdown on non-compliant operations.

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As Bali continues to balance development with environmental sustainability, the situation surrounding PARQ Ubud will remain under close scrutiny, signaling a potential shift in how foreign businesses operate on the island.

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