BASIC POLICY AND IMPLEMENTING POLICY OF THE CAPITAL INVESTMENT LAW

This article is written to provide a solution regarding the sovereignty-international obligations dilemma known as the regulatory chill caused by the promulgation of the Capital Investment Law. In achieving this purpose, this article implements the normative research method by quoting the basic policy and implementing policy doctrines as the main basis. This article is also supported by the prevailing Indonesian investment regulations, multilateral treaties concerning trade and environment, and public law doctrines. This article consists of two discussions. The first discussion counters the government of Indonesia's dilemma due to the promulgation of the Capital Investment Law by implementing the basic policy doctrine. Meanwhile, the second discussion answers the same issue based on the implementing policy doctrine. From the first discussion, it can be understood that such regulatory chill is caused by the two main purposes of the Capital Investment Law which are economic development and liberalization. Although the basic policy doctrine can find the root cause of such a dilemma, it cannot be applied as the prescription of the regulatory chill phenomenon. Meanwhile, from the second discussion, this article recommends Indonesia revise the prevailing rules concerning expropriation in the Capital Investment Law. By mixing the police power doctrine and the sole purpose doctrine, this article believes that Indonesia may have a balanced investment measure.