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ARTICLE · 03 DECEMBER 2014

Protecting foreign investment in Indonesia

Corrs Chambers Westgarth
Corrs Chambers Westgarth
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Corrs Chambers Westgarth

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A range of legal protections – both domestic and international – may be available to Australian businesses in Indonesia.

AustraliaInternational Law

Australian businesses investing in Indonesia are often concerned about general sovereign risk. A range of legal protections – both domestic and international – may be available, although each has its complications.

DOMESTIC PROTECTION

Indonesia's Investment Law provides some basic protection for foreign investment.

Any nationalisation must be in accordance with law, with compensation based on the market price. If the government and the foreign investor cannot agree on the compensation, the dispute must be settled through arbitration.

Market price is explained as a price determined according to an internationally used method by an independent appraiser appointed by the parties.

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