Umbrella Clauses Investment Agreements

Safeguard clauses carved out in the 1950s to improve the protection of contracts between investors and states1 provide for: that host Member States “respect” (or for example. B “respect,” “respect,” “respect” or “ensure compliance” have “commitments” (or, for example. B, “commitments” or “commitments”) they have made with respect to investments. B. Umbrella clauses apply only to companies in the host Member State and not to companies of foreign investors2. The many employment opportunities are also very influential on economic growth, where employment opportunities for the Community can reduce the unemployment rate in the Community itself. The creation of employment opportunities is achieved by opening up the most important investments. This investment is essentially divided into two types: direct and indirect investment. While direct investments to Komarudin (1983) are interpreted as efforts to control ownership of a company in another country, Suny`s (1976) indirect investment is defined as an investment by buying shares/bonds in a company for such amounts, so it is not enough to transfer control of the company to foreign investors.

Direct investment or foreign direct investment is divided into two parts, namely foreign and domestic investment. According to Article 1, paragraph 3, of The Foreign Investment Act 27, “Foreign investment is an investment activity for foreign investors to conduct transactions in the territory of the Republic of Indonesia by foreign investors, whether they use foreign capital in full or in conjunction with the domestic investor.” Article 1, paragraph 2 of the law states that “domestic investment is an investment activity to carry out transactions on the territory of the Republic of Indonesia by domestic investors through the use of domestic capital.” The implementation of foreign investment often involves mutual interests. Reciprocity here means that an Indonesian entrepreneur can expand his activities abroad, but the entrepreneur also has the right to do business in Indonesia. Indonesia has concluded several international investment agreements to ensure that foreign investment is operational and not mutually damaging.

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