The Indonesia-Australia Comprehensive Economic
Partnership Agreement (IA-CEPA) officially came into force on 5
July 2020. It was signed by Indonesia and Australia in March 2019
and then survived domestic ratification in both countries. It takes
effect at a time when Australia and Indonesia are seeking to work
together more closely, including in relation to Indonesia's
response to COVID-19.
The IA-CEPA's Investment Chapter updates the investment
rules between the two countries which were contained in the
Indonesian-Australian 1992 Bilateral Investment Treaty (BIT). It is
more modernised than its predecessor and aims to better balance the
right of an investor to bring a claim with the right of the
government to regulate in the public interest. It contains
standards of protection which are better defined but which contain
appropriate carve-outs to allow both governments to make decisions
in key policy areas such as the environment, health and social
welfare.
