No more bi-lateral investment treaties for Indonesia

The government of Indonesia has recently (i) informed the Netherlands that its bi-lateral investment treaty with Indonesia, for the promotion and protection of investment, will be terminated from July 2015 and (ii) indicated that it will, at the earliest possible opportunity, terminate all of its 62 investment treaties with other countries including Australia, China, France, Germany, India, Singapore, South Korea and the UK.

The investment treaties guarantee (i) basic rights for foreign investors in Indonesia and (ii) basic rights for Indonesian investors in foreign countries.

There are significant variations in the wording as between different investment treaties and that wording has changed over time. However, the investor treaties generally guarantee basic investor rights of (i) fair and equitable treatment, (ii) adequate physical security and protection, (iii) most favoured nation status, (iv) no expropriation or nationalisation without market value compensation, (v) free repatriation of capital and profits and (vi) the arbitration of disputes in Washington DC…

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