FDI Stabilization Clauses Post-Omnibus: Balancing State Control and Renewable Energy Investor Protection
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This article examines the systemic tension between foreign direct investment deregulation under Indonesia's Omnibus Law and the constitutional mandate of state control within renewable energy projects. Utilizing a normative doctrinal approach, this research thoroughly analyzes statutory frameworks, conceptual doctrines, and international arbitration jurisprudence to dissect the structural clash between investors' legitimate expectations and state sovereignty. The results demonstrate that conventional stabilization clauses acting as absolute freezing mechanisms precipitate regulatory chill, severely undermining the state's sovereign capacity to adapt to ecological crises without facing massive international arbitration claims under fair and equitable treatment standards. To legally resolve this dichotomy, this study recommends restructuring power purchase agreements by implementing a dynamic integrated stabilization clause. Rooted deeply in the rebus sic stantibus doctrine, this novel contractual mechanism incorporates environmental carve-outs, thereby safeguarding investors' economic equilibrium while definitively preserving the host state's inalienable right to regulate for sustainable development and national public interest effectively.
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