Analysis of the Enforcement of the Survival Clause for Foreign Investors in Indonesia Due to the Termination of the Bilateral Investment Treaty (BIT)

ABSTRACT


Introduction
Advances in information and communication technology have created a growing sub-field of marketing communications, rich in innovation and creativity, giving birth to breakthroughs, namely the concept of integrated marketing communications analysis (Fonna, 2019).Marketing Communications (IMC).Integrated Marketing Communication (IMC) is a marketing communications planning process that is applied to communicate planning concepts comprehensively to evaluate the strategic role of various marketing communications elements (Fonna, 2019).IMC pays attention to the added value of comprehensive marketing planning to evaluate the strategic role of various disciplines from the communication discipline, including general advertising, direct response, sales promotion, and public relations (Oana & Schneider, 2018).
The activity of the marketing process in setting company targets requires an optimization component of the promotion mix, that consists of advertising, sales promotion, public relations, personal selling, direct marketing, interactive marketing, publicity, sponsorship and targeted word of mouth to integrate with mark brand (Baek et al., 2021), and if done with correct optimally, they will give effect in a way direct impact on the behaviour of the targeted audience.All of the communication aspects become important matters to deliver information, thoughts, ideas, messages, and intentions verbally and non-verbally to the audience (Fatimayin & Jacob, 2022).
Optimization of marketing communication elements focuses on the effort to reach effective performance, elaborating with additional sophisticated information and communication technology that is applied in marketing channels, destinations, accessibility, HR media channels, and tourism institutions.Entering the era of digitalization, rapid technological developments are driving marketing patterns to expand into digital base areas.Nowadays, the internet is an effective role player in carrying out marketing (Watts et al., 2018).
Studies related to the implementation of Integrated Marketing Communication in hotel and tourism companies have been carried out by previous researchers, both using quantitative and qualitative designs.Currently, this has received quite a bit of attention, especially since the shift in marketing communications towards digital.Some of the previous research was carried out within the scope of hotel and tourism companies, for example, research carried out by (Ndizera, 2018); (Penney et al., 2017); (Šerić & Mikulić, 2020).
The phenomenon and development of the D'Emmerick Hotel Salatiga company journey is one of the attractions and concerns for studying the integrated marketing communication concept based on digital marketing in the company.This research aims to explore further the implementation of IMC at D'Emmerick Hotel Salatiga, which in turn also forms ideas about strategies to improve market position after the COVID-19 pandemic using SOSTAC analysis (Hutahayan, 2020).The use of SOSTAC analysis is the differentiator from several previous analyses carried out (Ndizera, 2018); (Penney et al., 2017); (Šerić & Mikulić, 2020).SOSTAC analysis involves exploring the implementation of IMC from the stage of formulating the situation faced by the company, the objectives of IMC implementation, strategy formulation, tactics, actions that have been and will be taken and control or evaluation of the results of IMC implementation.Strategic communication itself is management's effort to pay attention to and coordinate something that will be carried out with the elaboration of several aspects of communication components to support and align the objectives of activities to influence persuasively (Nurohmah et al., 2022).

Research Methods
The research methodology carried out in this study is normative legal research with a juridical approach.The form is by reviewing laws and regulations, international investment agreements, international journals and secondary materials taken in the form of literature studies.Then the literature will be used as a study in this writing.

Analysis of the Basis and Reasons for Termination of the Bilateral Investment Treaty (BIT)
From 2013 to 2014, several countries, including Indonesia, began to consider the problems arising from the existence of BIT.BIT as a legal instrument that should be able to provide mutual benefits to the two countries is considered not to provide benefits as expected.Countries such as Bolivia, Ecuador, South Africa, Pakistan, Venezuela, India, Brazil and including Indonesia intend to terminate or refuse to renew the BIT after the end of the treaty.The main consideration is the need to revise the BIT to protect the national interests of the country concerned.What is of concern is that a powerful agreement such as a BIT should be made carefully and openly, so that control by the host state is required.
Control by the host states in foreign investment, according to Prof. Erman Rajagukguk, refers to the measures and policies implemented by the host states to regulate and supervise the presence of foreign investment in their territory.The main purpose of the control carried out by the recipient country is to protect the national interests of its country.One of the control measures taken by Indonesia against foreign investors was to end the BIT between Indonesia and the Netherlands in March 2014.Indonesia communicated its intention to terminate the agreement to the Netherlands Embassy in Jakarta, effective July 1, 2015.The communication was conveyed through Diplomatic Memorandum No. D/00405/02/2014/60 dated February 17, 2014 and the agreement ended on June 30, 2015.Indonesia also stated its intention to stop 67 (sixty-seven) BITs similar to 67 (sixty-seven) other countries.To date, Indonesia has violated as many as 31 (thirty-one) BIT agreements with 31 (thirty-one) countries, including the BIT Agreements with the Netherlands and India.
Indonesia's decision to terminate the Bilateral Investment Agreement (BIT) was triggered by an increasing number of legal disputes arising under the provisions of investment agreements filed by transnational companies seeking damages in the amount of hundreds of millions of dollars.In addition, the act of signing international investment and trade agreements is also considered to have reduced Indonesia's policy space to regulate matters related to the protection of national interests.One example of an international arbitration dispute case that uses the BIT as the basis of the lawsuit is the international arbitration case, namely the IMFA which sued the Government of the Republic of Indonesia in 2015 using the basis of the BIT lawsuit between Indonesia and India in 1999, one year after the BIT between Indonesia and India was terminated by Indonesia on April 7, 2016.

Analysis of the Survival Clause for Foreign Investors after the Termination of the Bilateral Investment Treaty (BIT)
In BITs that Indonesia has signed as a host state with partner countries, termination clauses are often combined with 'validity' and 'duration' provisions.The validity and duration clause regulates when the agreement becomes effective and how long the agreement is valid.Meanwhile, the termination provisions stipulated in the BIT affirm an appropriate time frame to be submitted to the partner country.This is done by giving official notice to the partner country regarding the intention to terminate the agreement before the expiration of the agreement.
In mutual termination, the consequences of termination for partner countries are usually limited whereas the BIT usually includes a survival clause in its provisions.This survival clause will ensure that investment protection will continue for investments that occur before the termination of the agreement for a certain period.The Survival Clause can be found in the BITs between Indonesia and its partner countries, including the following: The BIT between Indonesia and India which was signed on February 10, 1999, and terminated on April 7, 2016, the survival clause is contained in Article 15 (3), quoted as follows:

Article 15 Entry into Force, Duration and Termination
Notwithstanding termination of this Agreement under paragraph (1) of this Article, the Agreement shall continue to be effective for a further period of fifteen years from the date of its termination in respect of investments made or acquired before the date of termination of this Agreement.
In Article 15 (3) of the Indonesia-India BIT, there is a survival clause that protects foreign investors from India who have entered Indonesia before the termination date and is valid for up to 15 (fifteen) years from the date of termination of the BIT.
The BIT between Indonesia and the Netherlands which was signed on April 6, 1994 and terminated on June 30, 2015, the survival clause contained in Article 15 (2) is quoted as follows: Article 15 In respect of investments made before the date of termination of the present Agreement, the foregoing Articles shall continue to be effective for a further period of fifteen years from the date of termination of the present Agreement.
In Article 15 (2) of the Indonesia-Netherlands BIT, there is a survival clause that protects foreign investors from the Netherlands who have entered Indonesia before the termination date and are valid for up to 15 (fifteen) years from the date of termination of the BIT.
The BIT between Indonesia and the Federation of Russia was signed on September 6, 2007, and terminated on October 15, 2009, the survival clause contained in Article 12 (2), is quoted as follows:

Article 12 Entry into Force, Duration, Amendment and Termination
This Agreement shall remain in force for ten years.Upon expiry of this period, it shall automatically be extended for subsequent five-year periods unless one of the Contracting Parties notifies the other Contracting Party in writing at least twelve months before the expiry of the corresponding period about its intention to terminate this Agreement.
In Article 12 (2) of the Indonesia-Russia Federation BIT, there is a survival clause that protects foreign investors from the Russian Federation who have entered Indonesia before the termination date and are valid for up to 10 (10) years from the date of termination of the BIT.
The survival clause is also still applied in the latest BITs between Indonesia and Partner Countries where the BIT has not ended and is still valid today, including the following: The BIT between Indonesia and Saudi Arabia which was signed on July 24, 2019, and is still valid today, the survival clause is contained in Article 22, quoted as follows:

Article 22 Entry into Force, Duration and Termination
This Agreement shall remain in force for ten years and shall continue to be in force thereafter unless terminated by paragraph 3.
The BIT between Indonesia and Singapore which was signed on October 11, 2018, and is still in force today, the survival clause is contained in Article 44 (3), quoted as follows: Article 44 Entry into Force, Duration and Termination (3) This Agreement shall remain in force for ten years and shall continue in force thereafter, at any time after the expiry of the initial period of 10 years either party notifies in writing the other Party of its intention to terminate this Agreement.The notice of termination shall become effective one year after it has been received by the other Party.
From the above quotes, it can be concluded that the survival clause does not apply to foreign investments made by foreign investors from the Partner Country after the expiration date of the agreement so the foreign investor loses protection from the BIT.This does not mean that investments made after that will not be protected.These investments can still be protected through the Multilateral Investment Treaty (MIT) and Free Trade Agreement (FTA), where Indonesia as the Host State is one of the parties involved in the agreement.
The applicability of the survival clause is reflected in the case of international arbitration disputes that use BIT as the basis of the lawsuit, namely the IMFA case that sued the Government of the Republic of Indonesia in 2015 using the basis of the BIT lawsuit between Indonesia and India in 1999.Although the BIT of Indonesia and India was terminated by Indonesia on April 7, 2016, the BIT remains valid throughout the case until the issuance of an international arbitration award on March 29, 2019.
The survival clause cannot always be enforced for a certain period, and parties who have agreed to terminate the BIT may also cancel the survival clause in some cases.One of them is what happened when Australia and Chile ended the BIT, while both were negotiating a new trade agreement.Australia and Chile agreed to change the survival clause from 15 (fifteen) years to only 3 (three) years.
Although the ISDS mechanism is an important issue that makes Indonesia want to review its BITs, the Government of Indonesia still has to pay attention to the balance between national interests and investor protection.This can be summarized in the change of clause as follows: Specifying and narrowing the definition of "investment" rather than the flexibility of a broader definition.Indonesia should be able to process the word "investment" into a specific and narrow approach.This will clarify which assets are directly related to investment or not and encourage their use for national development; The Most Favoured Nations Treatment (MFN) provisions are integrated into international investment and economic integration treaties, both existing and to be developed (e.g.FTA, ACIA, RCEP, and so on); The Fair and Equitable Treatment provisions not only focus on the full rights of investors and quick access to legal proceedings but also pay attention to the national interest; Provisions containing the ISDS mechanism must be enforced on a case-by-case basis.The new provisions also involve domestic arbitration institutions as an alternative to dispute resolution.
The BITs that exist today between Indonesia and other developing countries were mostly made about 50 (fifty) years ago with an automatic renewal clause, still the same content as at the time of signing.There has been no substantial development with changes in the economic and political situation in Indonesia.Therefore, the need for a new BIT agreement model is important, not only to strengthen the fair and balanced treatment of investors but also to strengthen and protect national interests by maximizing the benefits of foreign investment in the country.

Conclusion
The reason behind Indonesia's decision to terminate the BIT Agreement with partner countries arises because Indonesia faces an increasing number of cases of legal disputes arising under the BIT filed by multinational companies claiming damages in the amount of hundreds of millions of dollars.In addition, the act of signing international investment and trade agreements is also considered to have shrunk Indonesia's policy space to regulate matters that protect national interests.
The result of the termination of the BIT by Indonesia for foreign investors is the enactment of the provisions in the survival clause, where even though the BIT has ended, there is a certain period for the BIT to still be valid for investment made before the expiration of the agreement period.Foreign investors who invest after the agreement period expires can seek protection from the Multilateral Investment Treaty (MIT) and the Free Trade Agreement (FTA) where Indonesia as the host country is one of the parties involved in the agreement.The new BIT model can take an example from the United States BIT model which has previously become a guideline for Indonesia's BIT, or it can take an example from the Brazilian BIT model which is more suitable for developing countries.In addition, Indonesia also needs to pay attention to the points of change in the BIT related to the definition of "investment", the provisions of the Most Favoured Nations Treatment (MFN), the provisions of Fair and Equitable Treatment, and most importantly the provisions of the Investor-State Dispute Settlement (ISDS) mechanism so that there is a balance between national interests and the protection of foreign investors.