Category Archives: Law

Indonesia Research Update #16: Utilizing Effective and Efficient Legal Drafting in Investment Treaty by Surya Oktaviandra

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The greater purpose of Foreign Direct Investment (FDI) is to bring substantial benefit to states involved and the world through the expansion of international trade. At the time when host state can increase the level of its capital and economic growth, the investor may also obtain benefits such as lower cost in the production and further profit by expanding the business into new market.

Despite the empirical statistic of the impact of foreign direct investment is, unfortunately, inconsistent since researchers have different result due to method`s disparity, the practice of FDI is obviously fruitful in the world economic activity. Furthermore, the framework of FDI is usually covered by two mechanisms; first, by Treaty with Investment Provisions (TIPs) and second, by Bilateral Investment Treaty (BIT).

BIT is conceived as a vigorous commitment between two countries since the first discussion until the execution stage. In International Law context, the principle of Pacta Sunt Servanda stipulated a contract or an agreement between two or more sides should be respected as a law for the contracting parties.

The concept of BIT arises because of the concern of risk in foreign investment. A BIT is deemed as a device or mechanism to attract inward investment of investor by offering host state`s commitment in accordance with property rights. Moreover, BIT sets to define the minimum standard of behaviour towards the investor to reduce the risk of expropriation or regulatory measure. Furthermore, the original purpose of BIT is, undeniably, to ensure adequate or, in some occasions, full protection for the investment of the investor.

In many BITs, investment protection clauses such as Most Favoured Nation (MFN), National Treatment (NT), Indirect Expropriation (IE), Full Protection and Security (FPS), sunset/survival clause or even, umbrella clause become an international standard and widely adopted by many countries to govern their BIT.

However, the recent development shows many states raise their concern to the application of BIT by terminating, or at least, evaluating their BIT in a drastic path. Many reasons emerge, two of them are crucial, the lack of regulatory space and the concern of dispute settlement mechanism. Those factors are interdependent and contribute to the investment dispute in recent years. Therefore, many legal scholars attempt to impart some recommendations on how to balance between regulatory space and the investment protection.

When it comes into Bilateral Investment Treaty, the challenge is even higher for host state in regulating a fair protection compare to Multilateral Agreement because there is only two state face to face to determine what law they will establish.

Surya’s research will exert to provide the practical recommendation on fair BIT`s provisions and states will be advised in drafting them for a better balance in their investment agreement.

Surya believe we can exercise specific instrument to improve our regulation in Bilateral Investment Treaty. A tool which he propose is through the language of legal drafting in the agreement. Surya will examine how prompt language in a Bilateral Investment Treaty can produce a narrower interpretation, clearer understanding and how this is beneficial in reducing dispute settlement.

A quick example how this works is in the term of Full Protection and Security Clause. Some BITs adopted this language, and the word of ‘Full’ creates broad interpretation on the application and can sometimes confuse even before the international court. When we shift the language of ‘Full’ into “Adequate’, the interpretation becomes narrower.

In his research, Surya will attempt to provide that type of method, especially for all important provisions that may lead to the opportunity for a dispute. The effectiveness of this approach, in my opinion, is fruitful and legitimate. In the case of Bilateral Investment Treaty where both parties delegate their consent to apply for their agreement, it governs as ‘treaty contract’. The application of this law will be based on the Pacta Sunt Servanda principle whereby what parties have been agreed must be respected.

 

Surya Oktaviandra is currently studying Master degree Law at Maastricht University, Netherlands and is on his way to finishing his research thesis.

 

Indonesia Research Update is an initiative by GoLive Indonesia that aims to promote and disseminate knowledge and information obtained through research completed by Indonesian students outside of Indonesia.

We sincerely thank Surya and wish the best for his future endeavours in career and life.

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On Indonesian Disability Law: picking up the pace

In accordance with the Disability Day, 3 December 2016, our GoLive enthusiast Indra Kiling and Gracia Girsang write about progress and challenges of the Indonesian Disability Law after its enactment earlier this year. 

Six months past the enactment of Law No.8/2016 on Persons with Disabilities, Indonesia is still trying to keep up. Can Indonesia celebrate the next month’s Disability day on 3 December by presenting actual progress and implementation of the Law? Or this effort, once regarded as a significant movement, still falls short of creating an ideal environment for persons with disabilities.

Derivative regulations, socialization activities and establishing the National Disabilities Commission are key activities to implement the law up until now. However, these initiatives are considered sluggish in producing progress and the recent 800 billion rupiahs cut in Ministry of Social Services’ budget further restrain follow-up efforts.

This state of affairs is an indication that there is a crisis in the government’s commitment and understanding to disability issue, precipitating the delay in completing and implementing the law. It is hardly a new problem, considering the enforcement of another second priority law like Mental Health Law No.18/2014 is still unsatisfactory hitherto, with only one derivative regulation completed until October 2016.

Also read: Questioning our dignity in mental health

As a means to put the Disability Law into effect, both central and local government has a lot of tasks to be done swiftly in multiple sectors. According to recent doctoral research done by Indra Kiling (2016) regarding programs for persons with disabilities in Indonesia, there are at least three feasible approaches that can expedite the implementation of Disability Law.

First, as underlined by many stakeholders before, accurate data on persons with disabilities are desperately needed. Programs could not be formulated and applied effectively in the absence of a good set of data. In this matter, apart from collecting data in village level, early screening for young children is essential. Early screening not only serves as an intervention that helps to anticipate severe or multiple disabilities, it also supplies data to further improve services for persons with disabilities.

Yet, the use of early screening in community level is still somewhat lacking in Indonesia. Indra’s research found that even though health workers are equipped with the developmental screening checklist, it is often useless since the health workers don’t really grasp on the subject of disability and inclusive service.

Solving the problem with the old fashioned way, training provision for active health workers is simply not enough for the long-term scope. Universities with health courses should insert disability and inclusive health services topic in their courses’ curriculum. This move will complement article 44 in the disability law that regulates similar approach in education courses. Conceivably, the knowledge gained in higher education could help health workers in conducting disability-friendly health services, including early detection.

Second, among people with disabilities, persons with mental disability are the most discriminated and disadvantaged group. The fact that most of them could not advocate for themselves, unlike persons with physical disability, is worsening the phenomenon. Conditions like bipolar disorder, anxiety disorder and depression can actually be prevented and treated with adequate mental health services before it becomes a disabling illness. Alas, mental health services in Indonesia, like other developing countries is under performed.

According to Basic Health Survey in 2013, only 11.9 percent persons with emotional mental disorder received recent treatment, while 38.2 per cent persons with the severe mental disorder have not received any treatment. This lack of performance can be easily solved with making the most out of existing resources.

Indonesia actually has a growing mental health workforce that could be employed to empower mental health services. Jakarta has provided an exemplary service with “Healthy Jakarta” program that involves psychologists to provide services in the community health centres. The benefit of this program is that it does not depend solely on the rare and expensive services from psychiatrists, instead, it utilises the underused but ever growing psychologists’ services. This could also simultaneously reduce the rate of mental disabilities, suicides, drug abuses, and domestic violence. We believe that best practice should not only be found in the capital but also proliferated to other provinces as well.

Last but not least, as a pillar of the contemporary disability movement, inclusive education often clashes with special education. A study from Stephen Meyers, a professor at the University of Washington found that in Nicaragua, posits that an established special school often competes with new inclusive schools for students. Parents there felt that their children benefitted more in the special school. In the end that special school was forced to cease their activities by local government backed up by an international non-government organisation (NGO) that supported inclusive education.

This conflict has the potential to occur also in Indonesia, a nation that is trying to improve the inclusive education system and a home of many disability-focused international NGOs who supported inclusive education. Education service providers must always prioritise the right of persons with disabilities to choose which school is best for them. The government, like regulated in Disability Law, must provide both inclusive education and special education services, and support them without playing favourites to any side. Moreover, future derivative regulations should ensure equal implementation of both education systems throughout the nation.

The International Day of persons with disabilities – 3 December – should be used as a reminder and a boost to gain (another) momentum to reinforce the Disability Law in Indonesia. We should not wait for the next Paralympics games or worst, regional elections to harvest attention. We must act now.

Indra Yohanes Kiling  is a LPDP scholarship awardee, member of GoLive Indonesia and also a Ph.D candidate in Psychology, at The University of Adelaide. His research focuses on finding best practices to support persons with disabilities in Indonesia.

Gracia Girsang is an Australia Awards awardee and a Ph.D Candidate at the Institute of International Trade, Faculty of the Professions, the University of Adelaide under the Australia Awards Scholarship. Gracia is also the project coordinator of GoLive Indonesia, a University of Adelaide-based project aiming at promoting discussion in various topics.

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Transit Country’s Challenges on Migrant Smuggling: exploring gaps in Indonesia’s law enforcement response

UNHCR News Story: UNHCR calls for concrete steps to protect refugees through Bali Process

The distance from Christmas Island and Ashmore Reef to the nearest Indonesian coastline is less than 250 nm. About 5,000 people on board of leaky Indonesian boats – that navigated by Indonesian crews – arrived in Australia during the first four months this year.

And many more had arrived through similar way in the previous years. These are clear evidences that these boats and these people must have previously departed from Indonesia.

In Indonesia, almost all investigated migrant smuggling cases are related to the transporting of people leaving Indonesia illegally to Australia, the outbound migrant smuggling.

However, as a transit country, Indonesia is not only experiencing outbound migrant smuggling but also the inbound one, entering Indonesia’s northern-shore of its western region.

Evidences from the investigated outbound cases strongly indicate that:

most irregular immigrants were previously smuggled too, from Malaysia.

This indication of massive inbound smuggling operations is not responded very well by Indonesian law agencies. There is also no strong evidence that Indonesia has liaised with Malaysia adequately to deal with this issue.

It is pretty much in contrast with Indonesia’s response to the outbound migrant smuggling. There seems to be gaps in Indonesia’s law enforcement response. 

Akhmad Khumaidi’s research explores and identifies these gaps with an expectation that its findings can be used to balance and to improve Indonesia’s law enforcement response to this serious crime.

 

*Akhmad Khumaidi, a research scholar at Flinder Law School at Flinders University, is presenting his research findings at the GoLive Indonesia discussion series on 29 August 2013. For more information about our program please visit: https://goliveindonesia.wordpress.com/event/

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