Selanjutnya

AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

AND
THE GOVERNMENT OF AUSTRALIA
CONCERNING THE PROMOTION ANO PROTECTION OF INVESTMENTS

The
Gover-nment of
the Republi c
of
Indonesia a nd
Gover-nme nt of
Austr-ali a (her-ei nafter- r-ef erred
to a s
" Par ties") ;

t he
the

BEARING
IN MINO
the fr-iendly and
c ooper-ative
r-elations
e>< ation agreement or arrangement
third country .

with

a

2. Neither Party shall in i ts territory subject investor s

of

the other
Party,
regards
their

management,
use,
enjoyment or di sposal of in vestments or return s , or
a ny
other

ac t i vit i e s
assoc::iated
with
investments,
treatment
l ess favo u ra ble than that which i t. a ccord s
investors of an y third country .

to
to

ARTICLE V
Compensation for Losses

When

a Pa r t y ,

in respect of investme nts in

its

terr itor y,

adopts any measures re l ating to l osses owi ng to war or other
armed
c onfli c t , r evolution, a state of nat i ona l
emergency,
revolt,
insurrection,
riot or other sim ilar event
in
i ts
territory,

i t s ha 11 accord to inves tors of the ｯｴｨｾｲ＠
Party
treatment,
regards
restitution,
indemnification,
compensation
or other settlemen t,
less
fa v ourable
than
that whi ch i t accords to invi:>stors of any thi rd country.

-

7 -

ARTICLE V I
E 11: propri a t io n
1 . A Party shal 1 not nation a 1 ise, expropr- ia te or subj ec: t

having effect equivalent to nationalisation
expropriation
( her-einafter
referred
to
"exp r opriation")

the

investments of

investors

other Par-ty unless the fol lowing conditions are
with:

(a)

the expropriation is for- a
the i n ternal

of

needs of

of

the

complied

public: purpose related

to

the Par-ty and under due pr-ocess

law;

(b)

the expropriation is non-disc:riminator-y;

(C)

the
expropriation is accompanied by the
payment
prompt, adequate and effective compensation.

2 . The

to

compensation

and

referred to in paragraph

sha l 1

of

be

computed
the
basis of
the
market
value of
the
investment
immed iately
befor-e
the
expropriation
impending
expropriation became public

knowledge.
Wher-e
that

value

cannot

be

r-ead ily

ascer-tai n ed,

the

compensation
sha 1 1
be
det@rmined

in
accordancE'
with
general l y
recognised
principles
of
valuation
and
equitable
principles
taking into
account
the
capital
invested,

depreciation,

capital

alr-eady

repatriated,

replacement
value, curr-ency exchange r-ate movements
other relevant factors.
3.

The compensation shall
include

interest

and

be paid without undue .d elay, shall

at an agreed

commer-cial ly

r-easonable

rate calculated from the date the measures were taken

to

the
date
of payment and shall
be
fr-eely
transferable
betwee n the territories of the Par-ties. The
compensation
shall
be
payable either in the cur-rency
in
which
the
investmen t
investor,

was originally made or,

Transfe r
1.

Each Party,
its

if requested

by

the

in any other freely conver-tible cur-rency.

ART ICLE VII
of Investments a n d Returns

in respect of funds related to investments in

terr i tor-y

of

investors of

the

other

Party,

and

-

8 .-

subject
to its right in exceptional balance of
payments
difficulties
to exercise equitably and
in
good
faith
powers conferred
by its laws and
regulations,
shall
permit 'the transfer freely and without unreasonable delay
of such funds including:
(a) capital
and
additional
capi t al
amounts
e stabli s h , maintain o r e x pand inv e s tments;

used

to

( b ) re turn s ;
( c) rE>payments
(d)

any loan and interest thE'reon;

proceeds from sales of shares of i nvestors;

( e) compensation for lasses referred t o in Artie le V ;

2.

( f)

proc eed s
a n asse t

(g )

t he
earning s
and othe r
remunerat i on o f
p erso n nel
engaged
from
abroad
who are al lowed
to work
in
connection
with in v estment in the territory of
the
other Party.

r ece i ved b y a n in vestor in case o f
o r liquidation; and

s al e

of

To
the e x tent that an inv estor o f a P a r ty has not made
another arrangement with the app r opriate authorities of
the other Pa r t y in whos e ter ri tory
t he in v e stmen t
is
situated, c ur r e ncy tran s fe r s made p urs u ant to pa r agraph l
s h a ll
be
p e rmit ted
in t h e
curre ncy o f
the
o r ig i nal
in v estmen t o r a n y o the r free l y conve rti bl e c ur ren c y . S u c h
be made at
the
preva il i ng
r a te of
t r a n s f ers s h a 11
e xchan ge on the date of trans f er with r es pec t t o
c u r rent
transactions in the currenc y to be tran s f erred.

3. Consistentl y
with the preceding par agraphs,
may
maintain laws and regulations r equiring
currenc y transfer s.

each Party
reports of

4 . A P ar t y may p rotect the r ig h t s of credi t ors ,
sa ti s f act i o n
of
jud g ments
i n
a d j u dica to r y
t he
proc e e d i ng s ,
thr ough t h e
e q u ita bl e ,
n on-d i s c r i mi n atory
a nd good f ai th app l ication of i ts law.
5. Returns
that are not transferred but
reinv ested
i n accordance with the laws

and

invested
regulations

-

and

9 -

investment policies of the Par-ties shal 1 be

treatE!d

investments and any alter ation of t h e for-m
in
assets are inv ested or- r-ein v ested shall not affect

whi c h
thei r

character as inv estments.

ARTICLE VII I
Subrooation
1.

If a Par-ty or an agenc y cf a Party ma k es a

paym""'nt ta

in v estor of that Party under a guar-antee , a contract
insurance or o ther form of indemnity i t has granted

of
in
respect of a n investment, the other Party shal 1 recognise
the
tr-ansfer
o f any r-ight or- title i n r espect of
suc h
investment.
The subrogated right or- c laim shall
not
be
gre ater than the origin a l right or cla im of the in v estor.
2.

Wher-e a Par t y

taken

has made a p ayme nt to i ts

r-igh t s

and c l a ims

of

i nvestor and

the

inves t or,

has

t ha t

investor s h a l l n ot , u nl e s s a u t hor-i sed t a a c t on beha l f o f
the Par-ty
making the pay ment, pu r- sue those
r-ights
and
c laims agains t the other- Par-ty .

ARTICLE IX
Entr-y and Sojourn of Personnel
1. Each
Par-ty
shall, subject t a i ts l a ws
and
r-e gulatio ns
r e l ating to t h e e n tr-y a n d s ojou r-n c f non-c i t i zen s , p er-mi t

n a tu r-a l p e r-sons who a r-e inves tor-s of the other- P a r-ty
and
p er-sonne l
e mpl oye d by i n v es tor-s o f t h at ot h&>rPar- t y
to
enter- and
r-emai n in its ter-r-itor-y forthe
pur-pose o f
engaging in acti v ities connected with in v eo;;.tments.

2 . Each

Par-ty shall, s ubj ect ta i t s

laws

and

per-mit
in v estor-s
of
the
other- Par-ty
i n v e s tments i n t he ter-r-i tar-y o f the fi r-s t
within

i ts

pers onnel o f

ter-r i tory

k ey

t e chn i ca l

r-egulatians ,

who
have
made
Par-ty ta empl oy
and

ma nagerial

t heir c ho ice .

ARTICLE X
Transoarency of Laws
Eac h Pa r t y shall, with a v iew to promoti n g the under-standing
of
i ts
l a ws that perta in t o
af fect inv estments
in
i ts

territory
by inv estors of the other Par ty, make
public and readil y accessible.

such

laws

ARTICL E XI

Settlefllent of Disputes
between a Party and an Investor of the other Party
1.

In the eVent of a dispute b etween a Party and an investor
of the other .P arty relating to an investment, the parties
to the dispute shall initiall y
seek
to resolve
the
dispute by cqnsultations and nego.tiations .

2.

In
the event
that such a
dispute c...a.nnot be settled
through consultations and negotiations, the investor
in
question may submi t the disp!:Jte, for settlement:
(a) in
accordance with the laws and regulations of
the
Party which
has
admitted
the
investment
to
the
competent
judic ial or administrative bodies of
that
Party; or
(bl to
the
International Centre for the Settlement of
Investment
Disputes
( " the
Centre")
for
the
application
of
the conciliation
arbitration
procedures
provided
by the 1965 Convention
the
Settlement of Investment Disputes between States and
Na ti on a 1 s of Other States ("the Convention") .

3.

If
both Parties are no t a t the time the di s pute arises
party to the Convention, the dispute may be submitte_ct
to
s uch
proce dures for se ttl ement as may be agreed
between
the parties to the dispute. If no such
procedures
have
· been
agreed
within a three month · per iod
from
written
notification of
the claim, the parties to the dispute
shal 1
be
bound to submit i t to arbitration under
the
Arbitration
Ru les of the United Nations Commission
International
Trade Law as then in force.
The arbitral
tribunal
shall
have the power to a ward
interest.
The
parties
to
the di Spute may agree in writing
to modify
those Rules .

4. Where
dispute is referred to the Cent re
sub-p.iragraph 2 (b) :

pursuant

to

-

(a)

11 -

wher-e
that action is taken by an
investor of
Party,
the other- Par-ty shall consent in
wr-iting
ta
the
submission of the dispute ta the
Centr-e within
forty-five days of receiving such a r-equest fr-om
the
investor-; or-

( b)

if
the par-ties to the dispute cannot
agree
whetherconciliation
or- arbitr-atian is the more appropriate
pr-ocedure,

the investor- affected shal 1 have the r-ight

to choose.
5. Once an action r-efer-red to in par-agr-aph 2 has been taken,
neither Par-ty shal 1 pursue the dispute thr-ough diplomatic
channels unless:
(a)

the

r-elevant

judicial or- administrative

body,

the

arbi tr-a 1 authority or other bod y , as the case may be,
has
decided that i t has no jurisdiction in
relation
to the dispute in question;
(b)

the other Pa rty has failed ta abide by or- comply with
any
judgment,
award, order or other determination
made by the body in question.

6.

In
any
pr-aceeding involving a dispute · r-elating
to
inVestment,
a
Party
shall. not asser-t,
defence,
c:ounter- - claim,
right of set - off or- oth er-wise,
that
the
investor concer-ned has received or- wi 11 r-eceive, pursuant
to an insurance or guar-antee contract, indemnification or
other compensation for all or- part of any alleged

loss.

ARTICLE XI I
Settlement of Disputes between the Par-ties Concerning
the Interpretation and Appl i cation of the Agreement
1. Disputes
between
the
Parties
concerning
the
interpretation
or appl ic:ation of this Agreement
should,
if possible, be settled through diplomatic: channels.
2.

If

a dispute betweem the Parties cannot thus be

settled

within
six months, i t shall upon the written request
e ither Party be submitted to an arbitral tri bun al.
3.

Such
an arbitral tribunal shall be constituted for
individual case in the fol lowing way:

of

each

-

(a)

12 -

within
two months of the receipt of the ｮｾｱｵ･ｳｴ＠
for
arbitration,
each Party sha ll appoint one member
of
the tribunal.

Those two members sha l l

national

third country who on approval

of a

then select
by

the

two
Parties
shall
be
appointed
Chairman
of
tribunal. The Chairman shall be appointed within

the
two

months from the date of appoiritment of the other

two

members;
( b)

in

any arbitrator appointed as provided for

in

this Article shall resign or become unable to act,
successor
arbitrator shal 1 be appointed in the
prescribed
for the
appointment
of
original arbitrator and the successor shall have
the powers and duties of the original arbitrator.
4.

the
all

If
within
the
period
specified
in
paragraph
3
the
necessary
appointments have not been made, either
Party
may,
in the absence of any other agreement,
invite
the
President
of the International Court of Justice to
make
any
necessary
appointments.
If
the
President
is
national
of either Party or is unable to
discharge
the
said function, the Vice-President or the next most senior
Member

who

is not disqualified on such a

ground

shal 1

make the necessary appointments.
5.

The

arbitral

relating

to

agreement
procedure.

tribunal

shall

decide

its competence and shall,

all

questions

subject

to

any

between
the
Parties,
determine
its
It
shal 1 reach its award
by
majority

vote

taking into account the provisions of this Agreement,
international agreements both Parties have concluded
the generally recognised principles of international
The arbitral tribunal shall afford to the Parties a
hearing.
It
may
render an award on the
default
Party. Any award sha 11 be
rendered in wr.i ting and
state

its

legal

basis.

An award

shall

be

final

the
and
law.
fair

of
sha 11
and

binding on the Parties .
6.

Each

Party

shall

bear

the

costs

of

its

appointed

arbitrator. The cost cf the Chairman cf the tribunal
other
expenses
associated
with
the
conduct
of

and
the

arbitration
shal 1
be
borne
in
equal
parts
by
both
Parties .
The arbitral tribunal may decide, howe v er, that
a higher proportion of costs shall be borne by one of the
Parties.

-

13 -

ARTICLE XIII
Settlement of Disputes between Investors of the Parties
1.

In

the event that a dispute ar-ises between investor-s

the Parties, the dispute shall, if possible,
through consultations and negotiations.
2.

be

ot

resolved

A Party shal 1 in accor-dance with its law:
(a)

provide
investors of the other- Par-ty who
investments
within
its
ter-r-itor-y
and

have
made
per-sonnel

employed
by
them
foractivities
associated
with
investments full access to its competent judicial
adnlinistr-ative
bodies
in or-der- to aftor-d
asser-ting
claims and enfor-cing rights in r-espect
disputes with its own investors;
(b)

per-mit its investor-s to select means of

their

of
of

choice

to settle disputes r-elating to investments with
the
investors
of the other- Par-ty, including
arbitr-ation
conducted in a third country; and
(c)

pr-ovide
for- the recognition and enfor-cement
result i ng judgments or- awar-ds.

of

any

ARTICLE XIV
Consultation and Ainendnient
1.

The

Pa r- ties

shall consult at the r-equest of

them
matters
concerning
application of this Agr-eement.

the

either-

of

inter-pr-etation

2. This Agr-eement may be amended at any time by agr-eement of
the Parties.

ARTICLE XV
Entry into Force. Duration and Tennination
1. This
Agr-eement shall enter- into force thirty days
after
the date of the later- notification by either Party of the
fulfilment of its constitutional requirements for
coming
into for-ce of the Agreement. It shall remain in for-ce forper-iod
of fifteen year-s and shall continue
in
for-ce
thereaftertor- .;i further per-iod of fifteen years and

-

14 -

fort h
unless terminated by notice in writing
Party one year before its expiration .
2.

In

respect

of

investments made prior to

termination

of

this Agreement,

the

by

the

provisions

eithe r

date

of

of

the

Agreement
sha ll continue to be ef f ective for a
further
period of fifteen years from the date of ter-mination of
the Ag :eemen t.

IN WITNESS WHEREOF, the undersi gned, dul y authorised ther-eto
by their respective Gov er-nmEmts, tiave Signed this Agr-eement .

Done
1992 ,

in duplicate at Jakar-ta this 17th
in the English language.

FOR THE GOVERNME NT OF
THE REPUBLI C OF, I NDONES 1 A

Signed
ALI

ａｌ

ｾ ａｓ＠

Mini ster f orForeign

Affairs

day

of

F OR THE ｇｏｖｅｒｎｾｔ＠
AUSTRAL1A

November,

OF

Signed
SENATOR GARETH EVANS
Ministerfor
Foreign Affair-s and T,r ade

Jakarta, November 17, 1 992

Excellenc y ,
have the honour ta refer ta the Agreement
the

Government

of

of

Government
Pr-atection of

'the

Republic

Australia

Investments,

of

concer n ing

In signing this AgreE'ment ,

in

Article II,

paragraph l

respe c t

the Republic

of

inter-preted as the
which
and,

have

between
and

the

Promotion

and

today.

it is the understanding of
Indone-sia that :

1. The phrase "investment policie-s"

(a),

the

which was signed

the Government of the Republic of

l

Indonesia

in Article I,

pa r- agraph

an? Article VII,

polic i es of

of

Indonesia

paragraph
shal J

the Republic of

legal effect on foreign

in r-espect of Au5tra1ia, shall

be

Indones i a

investmen t

matter-s

be interpreted as the

requirements set down b y way of Ministerial .statement
foreig n

investment matters.

2 . The scope of agreement in Article

III,

paragraph 1

(a)

is

limited to investment which has been g ranted admission in
accor-dance with the Law Mo.
Investment
However,
to

with any

Foreign

replacing

I I I,

paragraph 1

ra)

covered

and efforts sha ll

be made

hav e steps ta ken so tha.t those sectors s hal 1 also

pla.ce ,

by

this Ag reement . As

this Ag r eement sh all

sectors .

His E x cellenc y ,
ｾ ｾｂＭＸﾣｬＺｌ＠

ｾｦｩｬＺﾧ＠

Min.ister for Foreign Affair-s
and Trade of Austra 1 ia

i t.

needs to be broadened

cover other sectors outside those at present

cove red

ｾｧｂＱｑ

1 of 1 967 concerning

law amen di ng

the scope of the Agreeme n t

in Article
to

or

such

developments

automat.i ca l l y cq ve r

the

be
take
said

Jakcarta, November 17, 1 992

Excell en c y,
have the h onou r
the

Governmen t

Government

of

Protection of

of

"the

to refer to the Agreemen t
Republic

Australia

of

concern ing

Ind ones ia
t he

between
a nd

the

Promotion

and

In v estfllents, which was signed today .

In signing this Agreement ,

i t is the understanding of

the Government of the Repu bli c of Indonesia that :
1 . The phrase "in v estment policies" in Article I,
1

paragraph

(a), Article I I , paragraph 1 and Article V II ,
in

res p e ct

of

interpreted as the
which
and,

have

the Republi c

of

Indonesi a

paragraph
s hall

pol ici.es of the Republic of

legal effect on foreign

in respect of Australia, sha ll

be

Indonesia

investment

matters

be in terpreted as the

requirements set down by way of Ministerial statemen t
foreign investment matters.
2. The scope of agreement in Article lII,

parag ra ph 1

(a)

is

limited to investment whi ch has been granted admission in
accordance with the Law II.Jo.
Investme nt
However,
to

with an y

(a) and efforts shall

covered
be made

have steps taken so tha.t those se c tor s shal 1 a l so
by

this Agreement. As

this Agreemen t sha l I

place,

sec tors.

H is Excellency,
Ｎ ｑＡｌﾧｂﾣＮｔｉＺｾａ

ｎｓ＠

Minister for Foreign Affairs
and Trade of Austra I ia

such

it .

broad e ned

cover other sectors outside those at present

cov ered

ｓｅｎｂＡ

Fore ign

replacing

the scope of the Agree me nt needs to b e

in Article I I I , paragraph l
to

l of 1967 con ce rn ing

1 aw a.mending

be

developments

take

automatically cqv er the

said

-

3. The

Gover-nment

of

2 -

the

Republic

of

Indonesia

wil 1

interpret phrases refer-ring to investments made vid thir-d
countries
Article

in Artic l e
I I I,

compliance

I,

paragr-aphs

paragr-aph 1

(b l

(ii)

5 and 6 so as to

with the legal system and the

(8) i i
be

and

in

ful 1

existing

laws

and r-egulations in Indonesia.
The
Government

confir-mation
of

of

Austr-alia

these

will

under-s t a nding s

constitu te

the

by

the

agreed

interpretation_ of the abovementioned Articles .
Please accept, Excellency,

the renewed assurances

of

my highest conside r- ation.

Signed
ALI ALilTAS

Minister for FoJ.eign Affairs
of the Republic of Indonesia

Jakarta, Novemb·e r 17, 1992

E xce llency,
have

the honour to ack nowledge

r eceipt

of

y our

letter of tod ay·s date whi c h r eads as follows:
1. The phrase "investment policies" in Article I,
1 (a), Article . ｉｾ＠

i r,

respect

of the Republic:

interpreted as t h e
which
and,

hav e

of

Indonesia

shail

poli c ies of the Re public of

legal effect on f orei gn

in res p ect o f

r equirements

paragraph

paragraph 1 and Article VII, parag r aph

Aus tra l ia, shall

be

Indonesia

investment

matters

be interpreted as the

set down b y way of Ministerial s tatement

f o r ei gn in ves tme nt ma t ters .
2 . The scope of ag r eement in Article I I I,

paragraph 1

(a) is

limited to inves tment which has been granted admission in
accordance with the Law No. 1 o f
Inv e s tment
However ,
to

with any

Foreign

r e placing

c o ver o ther sectors outside those at present
paragraph 1

.covered

(a) and efforts s h a ll be made

have steps taken so that those sectors shall also

covered
pl ace ,

it.

the s cope of the Agreement needs to be broadened

in Article II I ,
to

1967 .concerning

law amen ding

by

this Agreement. As

such

be

deve l o pments

take

t hi s Agreement s h a l 1 automat i c.ally cover the

s.a id

sectors.
3. The

Government

of

the

Republic

of

Indonesia

will

interpret phrases referring to investments made via third
countries
Artie le

in
I I I,

His

Article I, paragraph 1
paragraphs

Excel ! e n cy,

ALI ALATAS
Minister for F o reign Affairs
of the Republic of Indonesia

( b)

5 and 6 s o a s

(ii)
to

be

(8)
in

i i and
fu l 1

-

compliance

with t he l "egal system and the

and r-egulations i n

h ave
recorded

in

With

ｲｾｧ

that,

ope ra tion

the
y our-

appli cation o f

adv ise

2 -

honour to
le tter

c o nfir-m

a b o ut

the

laws

the

under-stand i ngs

inte rpr-etation

a nd

the Ag reement.
｡ｲ､＠

to par-agraph 3 o f
should

substant i al

you r

t he mat tel"" ma y be b r-o ught to the

letter- I wish

ineq uity

of . the Agreement in r e l ation

in Australia via thir-d countr-ies b y
of

existi n g

I n donesia.

r-esult

to inves tmen ts

in v estor s

at t ent J o n

of

the Re puli l 1r o f Indonesia, with a vi ew t o

of

to
f r-om
mad e

Indonesia,

the Government
ame li orat i on of

t he sih.1ation .

Pl e ase acce pt , Exce llency,
my

the renewed assur-an ces

of

highest c on"" i. d e r-at ion.

Signed

SENATOR GARETH__EVANS

Minister f or- For-eign Affairs
an d Trade of Au stralia