Investment treaty with Indonesia clears next hurdle

The approval process for the bilateral investment treaty between Switzerland and Indonesia has progressed one step further. The Federal Government issued a message regarding the treaty via the Federal Assembly – the Swiss Parliament – on April 5, according to a press release from the Federal Government. The treaty signed by Federal Councillor Guy Parmelin and Indonesian Minister of Investment Bahlil Lahadalia in Davos on May 24 last year aims to close the gaps created when the previous agreement expired in 2016. 

“The treaty grants protection against political risks for Swiss investments in Indonesia as well as Indonesian investments in Switzerland,” the Federal Government writes. Indonesia is one of the most important Asian destinations from a Swiss point of view for direct investments. The corresponding capital stock amounted to 2.1 billion Swiss francs in 2022. Overall, Switzerland is one of the ten largest capital exporters in the world, with a network of 111 bilateral investment protection treaties and more than 1.46 billion Swiss francs in direct foreign investments.

A new negotiation approach was used for the first time to develop the new investment protection treaty with Indonesia according to the Federal Government. This limited the discretionary powers of arbitration courts when interpreting and applying the treaty via additional conditions. Furthermore, provisions were implemented to bring the aims of the investment protection in line with sustainable development targets. hs