Draft Government Regulation on Investor-State Dispute Resolution

The government is currently deliberating a Draft Government Regulation on Investor-State Dispute Resolution (“Draft Regulation”).The Draft Regulation represents an implementation of Article 32 of Law No. 25 of 2007 on Investment, which regulates in further detail the dispute-resolution mechanism which can be utilized by the Indonesian government (“Government”) and both foreign and domestic investors. [1] The Draft Regulation is of relevance to arbitration lawyers as well as to all investors who are currently or who are intending to invest within Indonesian territory.Scope of the Draft RegulationThe Draft Regulation sets out the dispute-resolution mechanism which is to be used by the Indonesian government and investors, both domestic and foreign, who have registered with the Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal–“BKPM”). [2] However, the Draft Regulation is not applicable to the following investments: [3]