Indonesian Civil Society wins major case on trade and investment deals

January 9, 2019: A decision by the Indonesian Constitutional Court on November 22, 2018, has found that the Indonesian President cannot approve trade agreements without presenting them to the House of Representatives for approval. All such agreements will need to be reviewed.

More generally, the decision widened the definition of a treaty which required House of Representatives approval, ensured that it is the House of Representatives which determines this question, and required extensive public consultation and input prior to such important treaties being finalised.

As part of the process of determining if a treaty must be presented to the House of Representatives, there must be Impact Assessments on their impact on the economy, social, environmental and human rights.

Treaties that could be affected include the Indonesia-Australia CEPA, Indonesia-Europe FTA (IEFTA), the Indonesia-Singapore Bilateral Investment Treaty (BIT), and the Agreement of AIIB - Asian Infrastructure Investment Bank.

The Constitutional Court decided that the International Treaty Law was being implemented in contradiction with Article 11 paragraph (2) of the 1945 Constitution of the Republic of Indonesia which states: "The President in making other international agreements which have broad and fundamental consequences for the lives of the people related to the burden of state finances, and / or require changes or the formation of laws must be approved by the House of Representatives”.

As well, the Constitutional Court said that the involvement of the state in international treaties under the pretext of world order should not conflict with the principles of independence, peace and social justice. Civil society groups argue that this should mean that treaties which harm the people’s interests or offend social justice should not be ratified.

The case was brought to the Constitutional Court by the Advocacy Team for Economic Justice, comprising Indonesia for Global Justice (IGJ), Indonesian Human Rights Committee for Social Justice (IHCS), Indonesian Peasants Union (SPI), FIELD Indonesia, KIARA, Bina Desa, Indonesian Peasants Alliance, Women Solidarity, Palm Oil Farmers Union, and five individual Salt Farmers.