DOI: 10.5176/2251-3809_LRPP1221

Authors: Iman Prihandono

Abstract: The disparity of human rights obligation between parties in International Investment Agreements (IIAs) has raised critiques. One of the strongest comments is that capital exporting countries should not be free from responsibility for human rights violations arising out of foreign investment activities of their Transnational Corporations (TNCs) national. This article examines Indonesia’s bargaining power in requesting renegotiation of IIAs with some major home countries of TNCs that operate in Indonesia. It analyses recent developments of two elements that may contribute in improving Indonesia’s bargaining position: (1) economic and investment advantages; and (2) strategic position. The finding of this article is twofold. First, human rights provisions are still absent in all of Indonesia’s IIAs,. They significantly lag behind recent developments in IIAs which have incorporated human rights provisions. Second, Indonesia has sufficient bargaining power to request IIA renegotiations. The world’s changing economic and political constellation has significantly contributed in improving Indonesia’s bargaining power. While Indonesia should take more serious actions to overcome its corruption problems, it should not let the opportunity to renegotiate IIAs to pass. In fact, Indonesia should be aware that its current bargaining power may not last long because the state of the world’s economy and politics changes very rapidly.

Keywords: Indonesia; treaty renegotiation; bargaining power; transnational corporations; human rights

Price: $4.99

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