Corruption and Illegality in Asian Investment Disputes: Indonesia

Abstract

Indonesia is notorious for high levels of corruption. This has remained the case in spite of significant reforms made since the collapse of the Soeharto government in 1998. This chapter briefly introduces some of the key law reforms which have sought to address corruption in Indonesia as well as ongoing concerns regarding high levels of corruption in the judicial system, which is one of the factors leading investors in Indonesia to prefer arbitration for resolving disputes. The chapter then considers the legal framework for international commercial arbitration in Indonesia, particularly relating to enforcement of arbitration awards and recent changes to Indonesia's policy relating to investment treaties and investor–state dispute resolution. The chapter includes consideration of two investor–state arbitrations involving Indonesia which featured allegations of corruption.