This study aims to analyze the role of customary institutions within the environmental legal system and to identify the gap between customary law values and local policies in achieving sustainable environmental governance. The research employs an empirical juridical method with a socio-legal approach, combining statutory and sociological approaches. Data were collected through in-depth interviews, field observations, and document analysis, and were qualitatively analyzed using an interactive model to examine the relationship between legal norms and social practices. The novelty of this study lies in emphasizing customary institutions as a form of living law that functions not only culturally but also possesses regulatory capacity in managing the environment based on local wisdom. The findings reveal that customary institutions play a significant role in maintaining environmental sustainability through social mechanisms and local values; however, they have not been optimally integrated into the formal legal system, resulting in normative and implementation gaps. Based on these findings, this study concludes that strengthening and integrating customary institutions into local environmental policies is a strategic step toward achieving inclusive, sustainable, and equitable environmental governance.
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