Abstract
International investment between countries is aimed at improving economic development of the state parties and its integration to the world economy. To attract foreign investors, the Government of Indonesia provides investment guarantees through BITs and domestic investment laws. However, in its implementation, those guarantees brought several disputes between Indonesian government and its foreign investors. Moreover, the BIT also shows an imbalance in the position between Indonesia as the host country and its foreign investors which affects the host state’s sovereignty. Reforms must be carried out in this area of law to strike a balance between the protection of foreign investors and the sovereignty of the host state. In addition, reforms in BIT must also be able to provide an equilibrium between economic improvement, human rights, and environmental sustainability. This article describes the participation of the Indonesian government in international investment law and the reforms that must be undertaken in the field of investment law, both at the domestic and international levels.
Highlights
Foreign investment plays significant role in the interactions between state and non-state actors for their economies
This article describes the participation of the Indonesian government in international investment law and the reforms that must be undertaken in the field of investment law, both at the domestic and international levels
Investment treaty arbitration involving the Indonesian government can be separated into two categories: before and after the establishment of the Foreign Investment Law Number 25 Year 2007 since it brings a reform in Indonesian foreign investment policy by providing fundamental protections in international investment law
Summary
Foreign investment plays significant role in the interactions between state and non-state actors for their economies. Exporter of palm oil, the second-largest producer of rubber, coffee and fisheries products, and the holder of 40% of the world’s geothermal energy reserves.2 Given these conditions, it is important for Indonesia to open itself to foreign investment since greater integration with the world economy can further increase investment opportunities in the country.. In order to answer the research question, this article provide a legal analysis of the Indonesian government’s participation in the international investment law, especially with regard to BITs and international investment arbitration It examines the types of international investment law reforms that Indonesia can enact in its domestic legal system and in the international community
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