Abstract Indonesian agrarian law emphasizes that the management of land and natural resources is not merely a matter of ownership, but also involves moral and social responsibilities for the welfare of the people, in accordance with the inherent nature and essence of the earth. This principle is reflected in Article 33 paragraph (3) of the 1945 Constitution of the Republic of Indonesia and Law No. 32 of 2004 on Regional Government, which regulate state control over natural resources and the management of regional land through clear cooperation mechanisms. The case of the West Nusa Tenggara Provincial Government (NTB) and PT. Gili Trawang Indah highlights the importance of legal certainty and community protection in agrarian resource management, including its social, economic, and tourism impacts. This study employs a normative-empirical legal research design. The research utilizes the following approaches: (a) Statute Approach, (b) Conceptual Approach, (c) Philosophical Approach, and (d) Sociological Approach. The theoretical framework includes Welfare State theory and Roscoe Pound’s theory of law as a tool of social engineering. The study finds that, juridically, the termination of PT. Gili Trawang Indah’s production contract rendered the community’s agreements with third parties legally void; however, informal cooperation continued in practice, resulting in uncertainty regarding rights, obligations, and operations. Sociologically, this situation generates complex social dynamics, undermines public trust in the law, and encourages the persistence of informal practices.