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EU-Indonesia investment protection agreement

New proposalUpdated 29 Jun 2026
Editorial illustration of A large industrial crane or factory machine in an export-oriented facility for EU-Indonesia Investment Protection Agreement Decision
Latest official update

European Commission · 29 Jun 2026

EUR-Lex

Planned EU-Indonesia protections for foreign investment

This proposal asks the Council to conclude the Investment Protection Agreement between the European Union and Indonesia.

What this update means

2 min read

What is happening

The Commission has proposed a Council decision to conclude — formally approve — the standalone Investment Protection Agreement. This is a proposal, not the approval itself. EU and Indonesian negotiators completed the agreement’s text on 23 September 2025 alongside negotiations on a broader Comprehensive Economic Partnership Agreement.1

Investment protection is being handled separately from that broader agreement following a 2017 opinion from the EU Court of Justice. The conclusion proposal accompanies separate proposals to sign the investment agreement and to sign and conclude the broader partnership agreement. The Commission says the investment agreement would not require changes to EU rules, regulations or standards.1

Why it matters

The agreement would create a legal framework for investors and investments in the EU and Indonesia. Its standards include non-discrimination, physical security, compensation for losses caused by war or other armed conflict, and free transfer of funds. The Commission says the text also reaffirms governments’ right to regulateThe agreement’s recognition that governments may pursue public-interest policies and that rules applying to investments may change, including in ways that adversely affect particular investments. and allows investment rules to evolve, including in ways that adversely affect particular investments.1

The current dispute mechanism has two parts: investor-state mediationOne of the agreement’s two current dispute mechanisms, involving an investor and a state-side party. and state-to-state dispute settlementOne of the agreement’s two current dispute mechanisms, covering disputes between the EU and Indonesia. The Commission says it makes the agreement’s rights and obligations enforceable. between the EU and Indonesia. The Commission says the latter makes the agreement’s rights and obligations enforceable. Separately, the two sides undertake to restart negotiations on settling disputes between one side and an investor from the other no later than the agreement’s entry into force.1

What happens next

For the agreement to be concluded under the Commission’s proposed route, the European Parliament must first give consent. The Council would then decide whether to adopt the conclusion decision.1

If the agreement enters into force, a committee would supervise and facilitate its implementation and exchange views with civil-society representatives. Domestic advisory groups representing economic, social and environmental interests could submit recommendations on how the agreement works and would meet at least once a year.1

Bouleon Brief

2 min read

What is happening

On 29 June 2026, the Commission put forward a proposal asking the Council to conclude the agreement. It is the legal instrument the Commission wants the Council to use for formal approval; it is not itself a Council approval. EU-Indonesia negotiations on the investment agreement concluded on 23 September 2025.1

Investment protection began within broader economic-partnership negotiations launched in 2016. After a 2017 Court of Justice opinion concerning an EU-Singapore agreement, the Commission decided to separate investment protection into a stand-alone agreement and informed the Council’s Trade Policy Committee in 2021.1

The agreement sets standards for non-discrimination, fair and equitable treatment, physical security, compensation for losses from war or armed conflict, free transfer of funds and protection against expropriation without compensation. The Commission says these safeguards are balanced by governments’ right to regulateGovernments’ ability to change rules in pursuit of public-interest objectives, including when changes may adversely affect particular investments. in the public interest, including by changing rules in ways that may adversely affect particular investments.1

Why it matters

The agreement directly concerns EU and Indonesian investors and investments in each other’s territories. In 2024, EU foreign direct investment stock in Indonesia was EUR 24.7 billion, while Indonesian investment stock in the EU was EUR 1.3 billion. The draft Council decision says the agreement would not, within the EU, create rights or obligations for people beyond those created between the parties under public international law.1

For disputes, the agreement provides mediation between an investor and the other side, plus state-to-state dispute settlementA mechanism for disputes between the EU and Indonesia that, according to the Commission, makes the agreement’s rights and obligations enforceable. between the EU and Indonesia. The Commission says the latter makes the agreement’s rights and obligations enforceable. The parties also undertake to restart negotiations on settling disputes between a party and an investor of the other party, and on guidance for taxation measures and expropriation, no later than entry into force.1

What happens next

Under the procedure set out by the Commission, the Council is to adopt a decision concluding the agreement after obtaining the European Parliament’s consent. The 29 June document is the Commission’s proposal for that Council decision.1

If the agreement enters into force, a committee would supervise and facilitate its implementation. Domestic advisory groupsGroups with balanced representation from independent civil-society organisations covering economic, social and environmental interests. They may submit views on the agreement and must meet at least annually. representing independent economic, social and environmental organisations could submit views and recommendations and would meet at least once a year.1

Policy journey

New proposal

No later official step is currently published.

  1. New proposalEuropean Commission · 29 Jun 2026