Recent Developments

Recently the Government of Indonesia has revealed that draft model of new bilateral investment treaty (BIT) will be ready soon. The new BIT will have features which are considered new. Among the new features in the draft model BIT is treaty claim and contract claim, the issue which attracts controversy in international investment law.

It is unknown yet on how new BIT model will formulate the relationship between treaty claims and contractual claims. As a country with abundance of natural resources, Indonesia has entered into many State contracts with foreign investors in the area of oil and gas, mineral and coal.

The following is the likely contents of Indonesia new BIT model: (1) Preamble, (2) Covered Investment, (3) Definition of Investment, (4) Investment License, (5) Definition of Investor, (6) Definition of Measure, (7) Scope of Application, (8) Treaty Claim and Contract Claim, (9) Treatment of Investment on National Treatment, (10) Most Favoured Nation Treatment and Standard of Treatment, (11) Compliance with International Obligations, (12) Compliance with Domestic Laws and Regulations, (13) The Cause of Action under the Agreement, (14) Investor-State Dispute Settlement, (15) Governing Law in Dispute Settlement, and (16) Period in Force and Termination.