Singapore and Indonesia signed an Agreement on the Promotion and Protection of Investments, also known as the Bilateral Investment Treaty (BIT), at the Singapore-Indonesia Leaders’ Retreat in Bali, Indonesia, on 11 October, 2018.
Singapore has been the largest investor in Indonesia since 2014, with realised investments reaching USD 8.4 billion in 2017. The BIT aims to protect investors’ interests and reinforce the strong economic ties and cooperation between Singapore and Indonesia.
The BIT is a legally-binding agreement between the two countries and it will complement the ASEAN Comprehensive Investment Agreement (ACIA), that Singapore and Indonesia are also Party to. It establishes rules on how Indonesia should treat investments and investors from Singapore and vice-versa. With the BIT, Singapore companies operating in Indonesia will enjoy protection on their investments, on top of that already accorded under Indonesia’s domestic laws. Similarly, Indonesian companies operating in Singapore will also enjoy investment protection. Some of the key areas of protection are:
- Non-discriminatory treatment compared to other foreign investors and their investments (Most-Favoured-Nation treatment)
- Non-discriminatory treatment compared to local investors and their investments (National Treatment) in most sectors
- Fair and equitable treatment, and full protection and security, based on customary international law
- Protection from illegal expropriation
- Compensation for losses arising from war, armed conflict, civil strife
- Freedom to transfer capital and returns
- Right for investors to submit dispute claims on behalf of their locallyestablished enterprise in the host State
- Access to international arbitration for investment disputes
(Source: Ministry of Trade and Industry, Singapore)