Foreign Investor Protection: Job Creation Law And Bilateral Investment Treaty Standards Alignment

Abstract

The enactment of Indonesia’s Job Creation Law (Law Number 6 of 2023) marked a significant effort to enhance the country’s investment environment and attract greater foreign direct investment (FDI). However, despite its objective of regulatory simplification, the law has raised concerns regarding legal certainty, labour rights, environmental protection, and the effectiveness of dispute resolution mechanisms. This research explores how the Job Creation Law aligns with international standards, particularly those established by the International Centre for Settlement of Investment Disputes (ICSID). It assesses its impact on foreign investor protection. This study analyses legal frameworks, international investment treaties, and relevant secondary sources using a conceptual approach. The research identifies critical gaps in the Job Creation Law, including the absence of comprehensive investor-state dispute settlement (ISDS) provisions, inconsistent regulatory enforcement, and potential risks related to labour flexibility and environmental deregulation. To address these issues, the thesis proposes harmonizing domestic investment regulations with BIT principles, strengthening institutional mechanisms, and enhancing legal safeguards. The findings suggest that while the Job Creation Law introduces important reforms, further alignment with international norms is essential to provide legal certainty, promote sustainable investment, and ensure balanced protection for investors and the host state.