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Abstract

International investment between countries is aimed at improving economic development of the state parties and its integration to the world economy. To attract foreign investors, the Government of Indonesia provides investment guarantees through BITs and domestic investment laws. However, in its implementation, those guarantees brought several disputes between Indonesian government and its foreign investors. Moreover, the BIT also shows an imbalance in the position between Indonesia as the host country and its foreign investors which affects the host state’s sovereignty. Reforms must be carried out in this area of law to strike a balance between the protection of foreign investors and the sovereignty of the host state. In addition, reforms in BIT must also be able to provide an equilibrium between economic improvement, human rights, and environmental sustainability. This article describes the participation of the Indonesian government in international investment law and the reforms that must be undertaken in the field of investment law, both at the domestic and international levels.

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