Indonesia was still firm
about bilateral commitment with other countries investing in Indonesia based on
bilateral treaty. The Government still referred to the clausules already signed
in treaty including assurance to foreign investors in Indonesia. But the
consequences was that each time there was dispute or claim brought to
arbitration, Indonesia always lost. “Such as claim of Churchil Mining claim to
arbitration, in any court at all we lost.” The director General of Law and
International Agreement, Ministry of Foreign Affairs Linggawati Hakim disclosed
to Business news.
Churchil Mining brought their claim to the International
Centre for Settlement of Investment Dispute, Washington, USA. The company
complained that their mining permit was cancelled by the Regency of Kutai in
East Kalimantan. “Contract made by the Regional Government, this is a typical
mistake. Contract must not be made by the local Government because in case of
sue, the Target is the Central Government, not the local Government” Hakim remarked
The Ministry of Foreign Affairs felt the need for
coordination and consultation between the Central and local Governments; this
was the one point not understood by the local Governments. Churchill’s sue was
not the only case, there were many other foreign investors who sued for rights.
Pursuant to that matter, the Ministry of Foreign Affairs of RI was fostering
collaboration with South Center to support capacity building of developing
countries. “Capacity of building is most important for Indonesia and the
developing countries. We act as co-host in meetings with negotatiors who are
mostly lawyers of around 50developing countries.”
The Ministry of Foreign Affairs saw that developing
countries had no better bargaining position, particularly in times when foreign
investors made their claims. It was the point that made developing nations
skeptical about the Investor-State Dispute Settlement [ICSID/UNICITRAL]. “There
is more loss thain gain. Many developing nations refuse to go to ICSID” Hakim
concluded.
Scepticism was even beginning to haunt developing
countries like America and Australia. Many aspects made developing countries skeptical
such as objectivity of Arbitration judges. The Minister of Foreign Affairs saw
that the judges were no longer pro developing nations. Some developing nations
were unwilling to sign any treaty which tend to give privileges to foreign
investors. “We have dissected the matter, as Indonesia is not too far different
from other countries. At least in the forum there are recommendations for
developing countries”
The Minister still saw that every international
collaboration agreement was indeperable from ISDS/ICSID; but if there was any
clausule which gave to much privilege to investors, the Ministry saw the need
of amendments. Besides, every international agreement had expiry dates. If the
agreement was overdue, the Government of RI would not prolong it. “We need not
to prolong it; such is one alternative next to amendment and revision.”: Hakim
remarked.
Indonesia
had not decided whether to improve treaty with foreign investors countries. The
Ministry of Foreign Affairs had considered several alternatives to maintain
foreign investments, without disadvantaging the Government. Other alternative
way was through mediation process by involving a third party to bridge
communication for win-win solution. “Mediation is a long and winding process,
while investors believed that time is money. They would not be involved in a
long process. Very ofter the process of mediation is mis-communication.”
Business News - November 13, 2013
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