DIREKTORAT JENDERAL HUKUM DAN PERJANJIAN INTERNASIONAL ...pustakahpi.kemlu.go.id/dir_dok/OPINIO_JURIS_vol_14.pdf · (Purn) dan Istilah Hukum yang secara umum mendeskripsikan berbagai

i

DIREKTORAT JENDERAL HUKUM DAN PERJANJIAN INTERNASIONAL

KEMENTERIAN LUAR NEGERI REPUBLIK INDONESIA

Volume 14 September—Desember 2013

ARTIKEL Treaty Making Power in ASEAN: Legal Analysis on ASEAN Practices Damos Dumoli Agusman The Legal Implication of the Volcanic Ash Cloud Contingency Plan Adrianus Adityo Vito Ramon Global Governance in a Globalizing World: Do Globalization and Global Governance Erode National Sovereignty? Frassminggi Kamasa Teinver v. Argentina: The Most Favored Nations Principle in a Multiple Bilateral Investment Treaties Era Nenda Inasa Fadhilah RESENSI BUKU Refleksi dan Kompleksitas Hukum Humaniter Ratih Wulandari ISTILAH HUKUM

Jurnal Hukum dan Perjanjian Internasional

OPINIO JURIS

Volume 14 September—Desember 2013

DIREKTORAT JENDERAL HUKUM DAN PERJANJIAN INTERNASIONAL

KEMENTERIAN LUAR NEGERI REPUBLIK INDONESIA 2013


OPINIO JURIS Volume 14 September—Desember 2013

Diterbitkan oleh Direktorat Jenderal Hukum dan Perjanjian Internasional Kementerian Luar Negeri Sejak Oktober 2009

Penanggung Jawab

Linggawaty Hakim, SH., LL.M Raudin Anwar, SH., LL.M Redaktur Yoshi Iskandar, SH.; Kemal Haripurwanto, SH., LL.M; Amrih Jinangkung, SH., LL.M; Elmar Iwan Lubis, SH.; Drs.Sukarsono; Sudarsono, SH., MM; Rofita, SH; Zainul Idris Yunus, SE; Hendrar Pramudyo, SH. Editor Nenda Inasa Fadhilah, SH., LL.M.; Santa Marelda Saragih,SH., MH.; Ratih Wulandari, SIP.; Vina Novianti, S.Hum.; Rike Octaviany, SH., LL.M.; M. Ferdien, SH. Disain Grafis Abdul Hayyi Sekretariat Uki Subki, S.Sos, M.Si.; Anisa Husna, S.Hum; Tasunah; Maisaroh, S.Sos. Alamat Redaksi: Sekretariat Direktorat Jenderal Hukum dan Perjanjian Internasional Kementerian Luar Negeri Jl. Taman Pejambon No. 6 Jakarta Pusat Telp. +62 21 3846633 Fax. +62 21 3858044; Email: [email protected] Jurnal Opinio Juris versi digital dapat diunduh di website http://pustakahpi.kemlu.go.id/

Tulisan yang dimuat dalam Jurnal Opinio Juris adalah pendapat dan

analisis pribadi dari para penulis dan tidak mewakili pandangan/posisi

Kementerian Luar Negeri dan/atau Pemerintah Republik Indonesia.

JURNAL OPINIO JURIS Vol. 14 September-Desember 2013

v

DAFTAR ISI

Daftar Isi .......................................................................................................... v Daftar Gambar .............................................................................................. vi Pengantar Redaksi ...................................................................................... vii Treaty Making Power in Asean: Legal Analysis on Asean Practices ... 9 Damos Dumoli Agusman The Legal Implication of the Volcanic Ash Cloud Contingency Plan .......................................................................................................................... 37 Adrianus Adityo Vito Ramon Global Governance in a Globalizing World: Do Globalization and Global Governance Erode National Sovereignty? ................................. 68

Frassminggi Kamasa

Teinver v. Argentina: The Most Favored Nations Principle in a Multiple Bilateral Investment Treaties Era ........................................... 102

Nenda Inasa Fadhilah

RESENSI BUKU ......................................................................................... 131 Ratih Wulandari

ISTILAH HUKUM ..................................................................................... 135 TENTANG PENULIS ................................................................................ 138


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DAFTAR GAMBAR

Figure 1: The location of world volcanoes – in red ...................................... 43 Figure 2: Eruption column and umbrella ...................................................... 45 Figure 3: The damages on aircraft engine due to volcanic ash cloud ........ 48 Figure 4: The flow of information in ICAO IAVW ....................................... 52 Figure 5: Regional VAAC ................................................................................. 53


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PENGANTAR REDAKSI

Di tahun ke-5 Volume 14 penerbitan Jurnal Opinio Juris tetap eksis

mempertahankan ciri khasnya sebagai Jurnal yang mengkhususkan diri

pada kajian dan tulisan dibidang hukum internasional. Redaksi Jurnal

Opinio Juris tidak saja berupaya mempertahankan dan meningkatkan

kualitas tulisan yang ada, namun juga menyajikan tulisan yang aktual

sesuai dengan perkembangan isu hukum internasional.

Jurnal Opinio Juris Volume 14 tahun 2013 dan volume sebelumnya

dapat pula dibaca dalam bentuk e-journal melalui website

http://pustakahpi.kemlu.go.id. Hal ini dimaksudkan agar para pembaca

yang tidak memperoleh hard copy-nya dapat mengakses dan terbuka luas

untuk publik.

Pada Volume 14 tahun 2013 ini, redaksi memuat empat tulisan

mengenai yaitu: ―Treaty Making Power ASEAN Legal Analysis on ASEAN

Pratices” oleh Damos Dumoli Agusman, ―The Legal Implication of the

Volcanic Ash Cloud Contingency Plan” oleh Adrianus Adityo Vito Ramon,

―Global Governance In A Globalizing World: Do Globalization And Global

Governance Erode National Sovereignty?” oleh Frassminggi Kamasa dan

―Teinver V. Argentina: The Most Favored Nations Principle In A Multiple

Bilateral Investment Treaties Era” oleh Nenda Inasa Fadhilah. Dalam

penyajian tulisan tersebut di atas, tergambar beberapa topik bahasan dari

Hukum Organisasi Internasional, Hukum Udara, Hukum Investasi dan

hubungan antara kedaulatan negara dan globalisasi yang semuanya

bernuansa Hukum Internasional.

Untuk mempertahankan ciri khas Jurnal Opinio Juris, kami

menampilkan Resensi Buku Refleksi dan Kompleksitas Hukum

Humaniter yang dikarang oleh Prof. KGPH. Haryomataram, SH., Brigjen

http://pustakahpi.kemlu.go.id/


viii

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istilah hukum yang dipilih secara khusus dan lazim digunakan sebagai

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Terima kasih dan selamat membaca!

Redaksi Opinio Juris


9

TREATY MAKING POWER IN ASEAN: LEGAL

ANALYSIS ON ASEAN PRACTICES Damos Dumoli Agusman

Abstrak

Dengan berlakunya Piagam ASEAN, ASEAN telah menjadi sebuah organisasi internasional yang berdasarkan atas ketentuan hukum dan memiliki kapasitas untuk melakukan tindakan hukum, salah satunya untuk membuat perjanjian internasional. Akan tetapi, beberapa pertanyaan muncul terkait hal tersebut, misalnya apakah Sekretaris Jenderal ASEAN dapat membuat perjanjian internasional atas nama negara-negara anggota, apa sajakah jenis perjanjian internasional yang dapat dibuat dan bagaimanakah implikasi hukum penandatanganan suatu perjanjian internasional oleh ASEAN atas keterikatan negara-negara anggotanya terhadap perjanjian tersebut. Tulisan ini akan menganalisis praktik-praktik pembuatan perjanjian internasional oleh ASEAN sebelum dan sesudah berlakunya Piagam ASEAN serta hal-hal yang perlu dibenahi oleh ASEAN dalam upaya memperkuat sistem hukumnya, khususnya dalam hal pembuatan perjanjian internasional. Keywords: ASEAN Charter, international law, treaty making power, international organization, representation

Abstract

As the ASEAN Charter has entered into force, ASEAN has become an international organization with legal basis and has a capacity to do any legal conduct. One of them is the power to make an international treaty. Furthermore, some questions arise regarding such power, for instance, can the Secretary General of the ASEAN make an international treaty on behalf of the ASEAN’s member countries, what kind of international treaty that can be made, and how does the legal implication for ASEAN’s member countries upon an international treaty signed by the ASEAN. This paper will analyze practices of international treaty making by the ASEAN before and after the ASEAN Charter entered into force, and will suggest matters that need to be solved by the ASEAN in its effort to strengthen its legal system, particularly in making international treaty.


10

Keywords: ASEAN Charter, international law, treaty making power, international organization, representation

Since the entry into force of the ASEAN Charter in 2008, it is widely

said that ASEAN has moved from a loose organization to a rule-based

one. It implies that the activities of ASEAN shall be on the basis of law

applicable to the organization. ASEAN Charter as a treaty known to

international law will serve as a legal basis to all activities conducted by

ASEAN, both for internal and external objectives.

Unfortunately, ASEAN as an international organization for the

purpose of international law has not received much attention from

international legal scholars. Albeit its growing structure as a mature

international organization, it is hardly approached from international law

perspective. On the other hand, as commonly experienced by many

organizations alike, some legal questions may arise with regard to

ASEAN. Is ASEAN an international organization having legal capacity to

enter into a treaty? If yes, how does it exercise its treaty making power?

In order to answer these questions, it is worth exploring the defined

concept of ASEAN as subject of international law and what elements are

required to constitute an international organization for having quality as a

subject of international law. This paper attempts to discuss the practical

problem arising from its practices before the entry into force of ASEAN

Charter and explore the remaining potential conflict that might be

encountered in the future. This paper will demonstrate that the legal


11

problems facing ASEAN treaty making power are those that have

encountered the International Law Commission when it dealt with the

problematic question of treaties concluded by international organizations.

The first is the question on the status of its members when ASEAN

concluded a treaty and the second is on the representation, in the sense of

whether ASEAN could conclude a treaty on behalf of its members. The

paper will explore the issue that needs to be addressed by ASEAN with a

view to strengthening its rule-based system as an organization,

particularly in treaty making regime.

A. ASEAN as an International Organization

ASEAN Charter endorses in Article 3 its legal personality by

providing that ASEAN, as an intergovernmental organization, is hereby-

conferred legal personality. The formulation is carefully drafted in a way

that the Charter is only confirming the legal fact that ASEAN is, and was

before, an intergovernmental organization having legal personality. It

must be held, that the personality under international law has been

already enjoyed by ASEAN before the Charter. Chesterman1 puts it

correctly when arguing that the fact that ASEAN now claims international

legal personality in the Charter does not mean it lacked it previously, nor

that it now possesses it in any meaningful way.

1 Chesterman, Simon, Does Asean Exist? The Association Of Southeast Asian Nations as

An International Legal Person, (2008) 12 SYBIL 199-211, at 199.


12

From the legal writings and the jurisprudence it might be concluded

that the question as to whether international organizations are subject of

international law as well as the question on their legal capacity to enter

into treaties has been completely resolved either in theoretical or practical

level. 2 However, preconditions established by international law (objective

criteria) shall be met before an organization is recognized as international

organization for that purpose. 3 It is widely agreed that there are at least

two constituent elements required to form an international organization

status, i.e. a treaty establishing the organization and a permanent independent

organ detached from that of the founders. The ILC in its present works on the

responsibility of international organizations defines international

organization as:

2 The ICJ in the most important case on this matter, i.e. Reparation for Injuries Suffered

in the Service of the United Nations Case, 1949, has affirmed that the United Nations is a

subject of international law and capable of possessing international rights and duties,

and that it has capacity to maintain its rights by bringing international claim, ICJ

Reports, 1949, pp.178-179. This established view was reaffirmed in ICJ Advisory

Opinion in Interpretation of the Agreement of 25 March 1951 between the WHO and

Egypt,2 1980, which is held that: International Organizations are subjects of international

law, as such, are bound by any obligations incumbent upon them under general rules of

international law, under their constitutions or under international agreements to which

they are parties. 3 Schermers, Henry G,, International Institutional Law, Leiden, Stijthoff & Noordhoff,

1980, p. 277, Reuter, Paul, International Institutions, London, George Allen & Unwin

Ltd, 1958, p. 21, Brownlie, I, Principles of Public International Law, Oxford, Fourth Ed.,

1990, pp. 681-682, Rama-Montaldo, 'International Legal Personality and Implied Powers

of International Organizations', (1970) XLIV BYIL 111, pp. 144-145, Arangio-Ruiz,

Gaetano, 'the Concept of International Law and the Theory of International Organization',

(1972) III RdC 419, pp. 676-677.


13

“International organization” means an organization established

by a treaty or other instrument governed by international law

and possessing its own international legal personality.

International organizations may include as members, in addition

to States, other entities;4

When the two criteria apply to ASEAN, it appears that since its

inception through Bangkok Declaration in 1967 until 1976 ASEAN lacked

its legal personality. It was not a proper international organization in the

sense of international law since, although established by a treaty, it was

lacking the organ detached from its founders. It was merely a joint organ,

which acted on behalf of its members. The establishment of the ASEAN

Secretariat in 19765, gives effect to its legal status because the second

precondition, i.e. an organ detached from its founder has then been fulfilled.

Since then, ASEAN could be qualified an international organization for

the purpose of international law in the sense that it is a distinct entity

subject of international law.

4 Draft articles on the responsibility of international organizations, adopted by the

International Law Commission at its sixty-third session, in 2011, Article 2 (a). 5Agreement on the Establishment of the ASEAN Secretariat, Bali, 24 February 1976,

http://www.asean.org/1265.htm.


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B. ASEAN Treaty Making Power

Since 1976 and before ASEAN Charter, ASEAN has exercised its

treaty making power. However, the rules of ASEAN prior to the ASEAN

Charter did not as yet contain any clear rules for regulating the conclusion

of treaties with other subjects of international law on its behalf, but the

principles have been laid down that the capacity to make treaties resides

in its plenary organ, i.e. ASEAN Ministerial Meeting. ASEAN external

relations will be the primary responsibility of the ASEAN Ministerial

Meeting, which will formulate, when appropriate in consultation with

relevant Ministers, guidelines for establishment of the machinery for the

formalization, supervision, suspension or termination of negotiations

with other governments and international organizations. According to

Bangkok Declaration 1967, external relations between ASEAN and third

countries and international organizations should have the approval of the

Foreign Ministers. The Chairman of the ASEAN Standing Committee will

be authorized to sign all agreements reached between ASEAN and third

parties.

The ASEAN Charter has provided general rules on ASEAN external

relation and under Article 41 (7) prescribes that ASEAN may conclude

agreements with countries or sub-regional, regional and international

organizations and institutions. The procedures for concluding such agreements

shall be prescribed by the ASEAN Coordinating Council in consultation with the

ASEAN Community Councils. Such procedures are still in intensive labour.


15

i. Relation between Members and Treaties Concluded by ASEAN

At initial stage, and even until recently, confusion has come to fore

with regard to status of treaties6 concluded by the so-called ASEAN. In

this regard, one must be cautious in dealing with the term ASEAN. The

term of ASEAN in legal terms as a distinct entity detached from its

members is always confused with ASEAN as a merely collective noun for

all the members, which is frequently used in many ASEAN documents

and writings. The practices of ASEAN in concluding treaties with other

subjects of international law shows that the term ASEAN tends to be

interpreted as a collective noun of all the members instead of a distinct

entity. It could be seen for instance in the Cooperation Agreement

between the Member Countries of ASEAN and the EEC, 7 March 1980.

The agreement was signed by all foreign ministers of ASEAN member

states on one part and by President in office of the Council of the EC on

the other part. Thus, it is not a bilateral agreement between ASEAN as an

organization,- which has been incorrectly claimed as the first agreement

that it has signed as an international entity,- but merely a multilateral

between individual members of ASEAN and the EEC.

6 The term treaties in this paper will cover all formal instruments concluded by ASEAN,

such as agreements, MOUs, Arrangements, Exchange of Notes, and other designations

without making any distinction whether they are properly regarded as treaties for the

purpose of the Vienna Convention on the Law of Treaties.


16

Another example could also be found in the exchange of letters

constituting an agreement establishing the Sectoral Dialogue between

ASEAN and the Republic of Korea. On one part this agreement was

signed by Minister of Foreign Affairs of the Republic of Korea and on the

other part by Minister for Foreign Affairs of Indonesia as Chairman of the

ASEAN Standing Committee. Looking at this participation clause alone,

one might assume that this agreement is concluded by ASEAN as a

proper distinct entity in pursuant to the rules of ASEAN. However, from

the terms of the agreement, it reveals that ASEAN in this case is merely a

collective noun of all the members since the word ASEAN refers to

ASEAN member countries. The Chairman of ASEAN Standing Committee

signed the letter on behalf of ASEAN member countries instead of

ASEAN. In this instance ASEAN is not a party and no legal effects

devolve upon it. One may be questioning whether ASEAN as a distinct

entity could conclude that particular treaty. The answer is obviously

negative. A dialogue between ASEAN and a third country is not a

bilateral relation between ASEAN as a distinct entity and the country

concerned, but a kind of multilateral relations in which the member states

of ASEAN individually involve. Thus, ASEAN as a distinct entity was

lacking capacity to deal with such a relation on its own behalf.

The term ASEAN as is envisaged in the Charter may pose an already

long confusion and appeared to be so when it was being discussed in the

various discussions in the High Legal Expert Group for the

implementation of Article 41 (7) of the Charter. This Article only states


17

that ASEAN may conclude agreements with countries or sub-regional, regional

and international organizations and institutions. However, it does not define

the notion of ASEAN in terms of whether it is a distinct organization or

simply a joint collective of Member States.

From the legal perspective, ASEAN external relations under Article 47

(1) shall be distinguished into two different legal characters:

a. The relations between ASEAN member countries and a third

party where the status of each member country is as an

independent subject of international law. In this regard, the

term ASEAN is only used to refer to each member country as

collective members.

b. The relations between ASEAN as a subject of international

law, as a distinct subject separated from its members with a

third party. In this regard, member countries of ASEAN are in

the position as components of the ASEAN‘s organs (Standing

Committee, Committee, etc.).

On the first category, with regard to the relations between ASEAN as

collective members with a third party, it is often stated that ―ASEAN has

made numerous international agreements with other countries or

international organizations‖. However, when such agreements use the

term ASEAN, it will refer to each member country separately and forming

as a collective group without necessarily relinquishing its independent

status. This is reflected in the participation clause of such agreements


18

where all members are, individually, required to put their respective

signatures in the agreement. For example, in the Cooperation Agreement

between the Member Countries of ASEAN and the EEC, 7 March 1980, all

members of ASEAN individually signed the agreement and for the EEC,

on the other hand, it was signed by its authorized representative, i.e.

President of the Council. In this agreement, each individual member

country entered into contractual agreement with EEC as an international

organization. In this case, ASEAN is not an organization as a distinct

subject independently from its members. It is a logical consequence of the

fact where the scope of the agreement is not within ASEAN‘s competence

as an independent international organization, but rests on the authorities

of the member countries.

On the second category, ASEAN has made numerous agreements in

its capacity as a distinct subject separated from its members, in which the

term ASEAN Secretariat is commonly used. The agreements made by

ASEAN as an international organization and on its own behalf are, among

others, as follows:

a. The Agreement relating to the Privileges and Immunities of the

ASEAN Secretariat, 20 January 1979, between ASEAN Secretariat and

Indonesia.

b. Agreement of Cooperation between the Association of Southeast

Asian Nations (ASEAN) and the United Nations Educational,

Scientific and Cultural Organization (UNESCO), Jakarta 12th

September 1998.


19

c. The Agreement on the Use and Maintenance of the Premises of the

ASEAN Secretariat, 15th March 1996, between ASEAN Secretariat and

Indonesia.

d. Memorandum of Understanding between the Secretariat of the

Association of Southeast Asian Nations (ASEAN) and the

Secretariat of the United Nations Economic and Social

Commission for Asia and the Pacific (ESCAP Secretariat).

e. Arrangement between the ASEAN Secretariat and the United

States Patent and Trademark Office (USPTO) on Cooperation

in the Field of Intellectual Rights, 19th April 2005.

f. Memorandum of Understanding between the Secretariat of the

Association of Southeast Asian Nations (ASEAN) and the

Shanghai Cooperation Organization (SCO), 21st April 2005.

g. Memorandum of Understanding for Administrative

Arrangements, this memorandum of understanding (MoU)

will form the basis of Cooperation between the Association of

Southeast Asian Nations Secretariat and Asian Development

Bank (24th August 2006).

In the aforementioned agreements, ASEAN Secretariat acted on its

own behalf as an independent legal subject, separated from its member

countries. The Secretary General of ASEAN signed the agreements. This

position is a logical consequence to the fact that the substance of the

agreements is within the scope the ASEAN Secretariat competence.


20

Therefore, from the execution of such agreements shall not arise any

obligation to its member countries, as they are not parties to the

agreements.

Two agreements that have been concluded by ASEAN on its behalf

are worth noting, i.e. the Agreement relating to the Privileges and

Immunities of the ASEAN Secretariat, 20 January 1979 and the Agreement

on the Use and Maintenance of the Premises of the ASEAN Secretariat, 25

November 1981. The parties to the respective agreements are on one part

ASEAN as a distinct entity detached from its members and, on the other

part, Indonesia. Although Indonesia is a member, its status vis a vis

ASEAN in this agreement is a distinct subject separated from the

personality of ASEAN. The participation clause of the agreements clearly

indicates that Secretary General ASEAN who signed the agreements

represents ASEAN per se not that of member states.

With regard to those agreements, ASEAN has a capacity to perform

all rights and obligations without necessarily being supported by its

member states. The matters covered by the agreements are concerning

administrative and diplomatic matters which are exclusively under

competence of ASEAN as a distinct entity. They are inter alia juridical

capacity of the Secretariat within Indonesian territory and the enjoyment

of privileges and immunities by the Secretary General and the staff

including the premises of the Secretariat.

These practices have shown that the relation between members and

treaties concluded by ASEAN as a distinct organization is merely ―third


21

party‖ in the sense that they are not automatically bound by it. This legal

construction is compatible with the principle enshrined in the 1986

Vienna Convention on the Law of Treaties concluded by International

Organizations. The ILC in preparing that Convention was encountered

with the question of effects of treaties concluded by an organization on its

member states, which should be relevant to be regulated under the

present Convention. The Commission came out with a proposal which

was then under the Draft Article became Article 36 bis:

Article 36 bis Obligations and rights arising for States members of an international organization from a treaty to which it is a party. Obligations and rights arise for States members of an international organization from the provisions of a treaty to which that organization is a party when the parties to the treaty intend those provisions to be the means of establishing such obligations and according such rights and have defined their conditions and effects in the treaty or have otherwise agreed thereon, and if: (a) the States members of the organization, by virtue of the constituent instrument of that organization or otherwise, have unanimously agreed to be bound by the said provisions of the treaty; and (b) the assent of the States members of the organization to be bound by the relevant provisions of the treaty has been duly brought to the knowledge of the negotiating States and negotiating organizations.

The proposed draft became a most difficult part during the

negotiation in the Diplomatic Conference and was finally being rejected.

The proposed article was widely claimed as compatible solely in the light

of the case of the European Economic Community. Most views were in

favor of a default rule that member states should be third parties vis a vis


22

treaties concluded by international organizations to which they are

members.7 Finally, the Conference provided only a saving-clause (Article

74, para. 3), which states that [t]he provisions of the present Convention shall

not prejudge any question that may arise in regard to the establishment of

obligations and rights for States members of an international organization under

a treaty to which that organization is a party. The formulation of this saving

clause received cautious reaction from many delegations by emphasizing

that it should not be understood as allowing any possibility of a treaty

concluded by an international organization producing any legal effects for

States members of the organization which were not parties to the treaty,

unless those States members expressly consented to accept the relevant

provisions of the treaty.8

During the drafting exercise on Vienna Convention on the Law of

Treaties by the ILC, an attempt had been made to enable a state or an

organ on behalf of one or more states to conclude a treaty to be binding

for those states concerned.9 Due to its complexity, the embryonic idea was

immediately aborted and did not even reach the drafting stage of the ILC.

The Commission left aside the question and considered it as a problem of

7 United Nations Conference on The Law of Treaties between States and International

Organizations or between International Organizations, Vienna, 18 February-21 March

1986, Official Records, Volume I, at 174. 8 United Nations Conference on The Law of Treaties between States and International

Organizations or between International Organizations, Vienna, 18 February-21 March

1986, Official Records, Volume I, at 19. 9 Yearbook of the International Law Commission, 1964, Vol. II, at 16.


23

representation. The representation of one State by another State or by an

international organization or, more generally, of one subject of law by

another subject of law probably gives rise to complex problems of treaty

law.

However, when it dealt with the draft of the Vienna Convention on

the Law of Treaties concluded by International Organizations (the then

Vienna Convention of 1986) a similar question came out again. It was

expected that the Commission refrained, as did the United Nations

Conference on the Law of Treaties, from dealing with that question. If the

Vienna Convention of 1969 remained silent on the representation of the

corporate body by another corporate body, it is reasonable to adopt the

same position as regards treaties to which an international organization is

a party.10 It appeared however that it was not merely a question of

representation which it could easily set aside.

The delicate problem facing the conference has apparently posed the

similar confusion to the ASEAN practices. ASEAN practices have also

shown a ―peculiar‖ model, which is not compatible with the principle of

―third party‖ status of its members. There are several agreements which

were binding all members with a third party, concluded by the Secretary

General of ASEAN, such as the following:

10

Yearbook of the International Law Commission, 1977, vol. II, Part One, at 122.


24

a. ASEAN – China Memorandum of Understanding on Cultural

Cooperation (Bangkok 3rd August 2005), signed by the Secretary

General of ASEAN;

b. Memorandum of Cooperation between the Department of Commerce

of the United States of America and the Association of Southeast

Asian Nations (ASEAN) Secretariat concerning Cooperation on Trade

Related Standards and Conformance Issues (5th April 2001), signed by

the Secretary General of ASEAN;

c. Memorandum of Understanding between the Governments of the

Member Countries of the Association of Southeast Asian Nations

(ASEAN) and the Ministry of Agriculture of the People‘s Republic of

China on Agricultural Cooperation (Phnom Penh, 2nd November

2002), signed by the Secretary General of ASEAN;

d. Memorandum of Understanding between the Governments of the


(ASEAN) and the Government of the People‘s Republic of China on

Cooperation in the Field of Non-traditional Security Issues (Bangkok,

10th January 2004), signed by the Secretary General of ASEAN;

e. Memorandum of Understanding between the Governments of the


(ASEAN) and the Government of the People‘s Republic of China on

Transport Cooperation (Vientiane, 27nd November 2004), signed by

the Secretary General of ASEAN;


25

f. Memorandum of Understanding between the Governments of the


(ASEAN) and the Ministry of Agriculture of the People‘s Republic of

China on Agricultural Cooperation (Cebu, 14th January 2007), signed

by the Secretary General of ASEAN;

These agreements pose various legal questions and perhaps reflect

two legal scenarios. Could it be presumed that ASEAN as a distinct

organization is entitled to bind its members into a treaty concluded by it?

Are the scopes of cooperation contained in the agreements exclusively

under ASEAN competence as a distinct personality? Two scenarios might

be relevant, first that ASEAN in this regard is a distinct personality

performing competences that have been transferred to it, or secondly,

ASEAN is merely acting on behalf of its members for which ASEAN itself

as a distinct personality is not bound. The second scenario is a question of

representation, which will be discussed, in the next part.

Whatever scenario may apply, these agreements are not legally

compatible to what has been cautiously envisaged by the Vienna

Convention of 1986. Article 36 bis proposed at the Vienna Conference was

claimed as fitting to the supranational model such European Union,

where some sovereign competences have been transferred to the

organization. Even under the EU Law, the Union cannot conclude treaties

which competences are not exclusively under it. In the event where

competence is shared between the organization and its members, both can


26

become parties. Such an agreement is known, in the EC model, as a

―mixed agreement‖.11

In relation to ASEAN capacity to conclude treaties, a legal question

has been put forward to the 23rd ASEAN Standing Committee Meeting

1991, with respect to the possibility of ASEAN to accede to the 1987

Montreal Protocol on Substances that Deplete the Ozone Layer. The

meeting rightly holds that ASEAN did not possess sufficient legal

capacity to accede to that Protocol since ASEAN has no competence in

respect of matters governed by the Convention or its protocol. ASEAN

per se could not carry out general obligations as provided for within Art.

2 of the Convention since those matters fall into competence of respective

member states and such competence is never being transferred to

ASEAN.

Within the legal principle that was finally adopted under the current

law of treaties, one may consider that the listed agreements are peculiar

on some basic legal reasons. First, it is lacking procedural requirement for

the Vienna Convention 1969 principle of ―consent to be bound by a

treaty‖ since it is not the member itself establishing its consent but

another third party. It is worth taking into account that international law

does not recognize the practices where a state can delegate its treaty

11

Verwey, Delano, The European Community, the European Union and the International

Law of Treaties, Asser Press, 2004, p. 155-208 and Keefe, David and Schermers, Henry

G, Mixed Agreements, Netherlands, 1984.


27

making capacity to another subjects of international law to act for and on

behalf of that state to establish consent to be bound by an international

agreement notwithstanding the question of ―representation‖ which will

be discussed later. Second, the treaty making capacity is an integrated

part of state sovereignty and the exclusive domain of national authority.

Even the European Commission (EC) practices, which have become

supranational and integrated, it can only sign agreements in which its

members have transferred the competence to the EC Council.

It is obvious that in concluding such legally incompatible ASEAN

agreements as listed-above, the Secretary General of ASEAN and the

member states do not intend to perceive ASEAN a supranational model,

which can bind the members. It is highly presumed that such practices

could happen due to a lack of legal awareness with regard to the meaning

of ASEAN as a distinct personality and be exacerbated by the spirit of

―ASEAN Way‖, which tends to sacrifice the legal premises for political

consensus and ASEAN conveniences.

ii. The Problem of Representation

The problem of representation is a subject of debate under the Law of

Treaties. The question arises whether a subject of international law may

act on behalf of other subjects to conclude a treaty for the latter. The

question appears to be closely related, albeit distinguishable, to the

problem of the status of member states vis a vis treaties concluded by their


28

organization in a way that the organization may be construed as acting on

behalf of its members.

This question of representation had been discussed by the ILC in

drafting the Vienna Convention on the Law of Treaties of 1969. The

Commission finally left aside the question and considered it as a problem

of representation rather than the Law of Treaties. The representation of

one State by another State or by an international organization or, more

generally, of one subject of law by another subject of law probably gives

rise to complex problems of treaty law.

The question of representation, by which one binds another states to a

treaty, becomes complex and untenable in the current globalization. The

question of representation is not only complex at international level but

also at national/constitutional level. Democratization at national level

under globalization is characterized by the increasing independent

powers invested with the various organs of a state, coupled with the

increasing role of individuals vis a vis their state, has affected the right of

legation and posed a problem of democratic accountability of any treaty

concluded by a state. The separation of powers, i.e. executive, legislative,

judicative has become strict so that it raises question as to whether the

executive can represent legislative and judicative interest with relations to

other states. Under these circumstances, treaty making power as

traditionally invested with executive branch is under intensive question

and states become cautious in defining and regulating the executive treaty

making exercises.


29

Indonesia under democratization and constitutional consolidation

would be encountered with constitutional difficulty with the question of

representation. The sovereignty principle on ―consent of state‖ would be

at stake when representation takes place. Indonesian Constitution 1945

and the Law No. 24 Year 2000 on Treaties have not paved the way for

another state or international organization to bind Indonesia to a treaty.

There is no precedent under Indonesian practices where government

submits to a parliament for ratification a treaty signed by another

sovereign power to be binding upon Indonesia. None even imagines that

it may happen in the current constitutional context.

An agreement signed by the Secretary General of ASEAN on behalf of

member countries, in principle, is not binding member countries on the

basis that the requirement of ―consent to be bound by a treaty‖ by

Indonesia in accordance with Article 11 of Vienna Convention 1969 on the

Law of Treaties and the Law of 24 Year 2000 has not been fulfilled. In this

case there is no expressed consent from its individual members to be

bound to the agreement. The very fact that its members are said to having

authorized the Secretary General of ASEAN to do so cannot be invoked as

legally sufficient for establishing consent to be bound by a treaty by the

member state, as required by the Vienna Convention.

Under Indonesian law, the problem of ―Full Power‖ for expressing the

consent of the State to be bound by a treaty arises. If an international

agreement signed by the Secretary General of ASEAN and assumed that it

is binding for Indonesia, it will be construed that the Secretary General


30

has obtained a full power from Indonesia. Full power is a constitutional

power and only presented to the national officials. Granting full power to

an international organization is not an accepted practice according to

Indonesian Law of Treaties.

Based on these principles, a country cannot ratify a legal act

conducted by another subject of international law. In this regard, for an

agreement, which is signed by the Secretary General of ASEAN or an

appointed official of a member country and requires ratification, the

members are not in a legal position to ratify the foresaid agreement. As

ratification means ―to confirm the conduct of its representative who is

signing an agreement‖, it would be peculiar if member states, through

their national mechanism, ratify the conduct of the foreign officials.

Further consequence is that a member state as a state party does not have

the direct competent authority to conduct a legal act in relation to the

agreement itself, such as invalidity; termination; suspension;

amendments; and modification. Such legal acts can only and have to be

conducted through and under the approval of the Secretary General as

the signatory party.

ASEAN has abundant practices concerning the problematic situation.

Adding to the agreements listed-above, one may look at the

Memorandum of Understanding between the Governments of the


(ASEAN) and the Government of Australia on the ASEAN - Australia

Economic Cooperation Program (AAECP) Phase III (Bangkok, 27th July


31

1994). For ASEAN signed by H.E. Surin Pitsuwan, Deputy Minister of

Foreign Affairs, Acting Minister of Foreign Affairs of Thailand.

On the contrary, ASEAN has also experienced a situation where

member states assumed representation despite ASEAN as a distinct

personality not really requiring it. In 1985 ASEAN was authorized to

conclude agreements on cultural matters with UNDP on ASEAN Training

Course for Drug Rehabilitation Professionals and on ASEAN Law

Enforcement Training Course. In this case ASEAN is assigned to conclude

those agreements but again not on its behalf but on behalf of its members.

It only performs its task as coordinator and it is the members who

implement the training courses. If one looks at the project documents on

such ASEAN training courses, it might be agreed that, instead of its

members, ASEAN per se could be a party to the agreements. It is firstly

because the conclusion of those agreements are in accordance with the

objectives of ASEAN as specified within Bangkok Declaration, thus, it has

competence in respect of matters governed by the agreements, and

secondly, ASEAN as an entity could undertake the programs as covered

by the agreements without necessarily involving the personalities of its

members.

C. ASEAN Treaty Making Power under ASEAN Charter and its Rules

As indicated in the previous part, ASEAN Charter provides specific

rules on treaty making power. It is prescribed by Article 41 (7) that the

procedures for concluding such agreements shall be prescribed by the


32

ASEAN Coordinating Council in consultation with the ASEAN

Community Councils. The set of procedures is under negotiation by the

High Legal Experts Group, which consists of legal officials from member

states. From the Law of Treaties perspective, such procedures are

tantamount to the rules of the organization as referred to by the Vienna

Convention of 1986.

The procedures are expected to make a clear distinction on the

conclusion of agreements concluded by ASEAN as a distinct personality

and those that are concluded by all ASEAN member states collectively.

The critical issues worth exploring would be to what extent ASEAN may

be entitled to conclude treaties on its own behalf. This is the problem of

scope of competences to be conferred to ASEAN for it to be subject

matters of treaties it concludes. There must be a clear rule and principle

for ASEAN concerning the entitled subject matters, which are and not

within its competences. At least there must be a component organ under

ASEAN whose task is to determine whether or not a subject matter could

be contained in a treaty concluded by ASEAN. The rule is necessary in

order to ensure that ASEAN concludes a treaty containing matters within

its competences, otherwise, it requires collateral participation from its

members as envisaged by so called ―mixed agreements‖.

It should cover the matter as required by 1986 Vienna Convention to

be regulated by the rules of organization. The Convention emphasizes the

determining role of the ―rules of the organization‖ to govern the acts of

organization in concluding a treaty. The rules mean, in particular, the


33

constituent instruments, decisions and resolutions adopted in accordance

with them, and established practice of the organization. The Convention

makes references to the rules of the organizations in dealing with some

aspects of treaty making, which shall be provided by ASEAN rules,

among others:

1. The use of terms in the present Convention are without prejudice to

the use of those terms or to the meanings which may be given to them

in the internal law of any State or in the rules of any international

organization. The ASEAN Charter uses the term ―agreements‖ instead

of ―treaties‖ and therefore should not affect the validity of the

instruments under such different term.

2. The capacity of an international organization to conclude treaties. It

prescribes a regime that governs what subject matters that are within

and beyond the scope of ASEAN Treaty making power. This

particular issue is concerning power sharing between member states

and the organization, which will determine the scope of competence

of ASEAN in making treaties. Such competence is normally governed

by constitutional provisions of the organizations. It appears that

ASEAN Charter provides no provision on this competence and

therefore an implied power might be presumed in such manner in

accordance with the purposes and objectives of ASEAN.

3. Full powers.


34

4. Act of Organization to express its consent to be bound by a treaty in

the form of Signature, Act of Formal Confirmation (corresponding to

that of ratification by a State), Accession, Accession and Acceptance.

5. Acceptance to Treaties providing for rights and obligations for third

states or third organizations.

6. Amendments of a provision of a treaty.

7. Notifications with respect to invalidity, termination, withdrawal from

or suspension of the operation of a treaty.

8. The appointment of arbitrators or conciliators under dispute

settlement mechanism.

As ASEAN has grown into a mature rule-based organization on the

basis of its Charter and having in mind that its role is becoming expansive

at international level, it is inevitable that ASEAN as a subject of

international law should be an international law-abiding organization. It

this regard, international legal norms governing the relations between

and by international organization shall be respected. Therefore,

compatibility of ASEAN rules with the international norms becomes

necessary.

Daftar Pustaka

Bowett, D.W, The Law of International Institutions, Stevens, 1982.

Cf. Holloway, Kaye, Modern Trends in Treaty Law, London, Stevens & Sons, 1967,

Chesterman, Simon, Does Asean Exist? The Association Of Southeast Asian Nations as

An International Legal Person, (2008) 12 SYBIL 199-211,

Dale, W, 'Is the Commonwealth an International Organization?', (1982) 31 ICLQ 451


35

Elias, T.O., The Modern Law of Treaties, Leiden, A.W. Sijthoff, 1974,

Fifield, Russell H, National and Regional Interests in ASEAN, Singapore, ISEAS.

G. E. do Nascimento e Silva, “The 1986 Vienna Convention and the Treaty-Making

Power of International Organizations”, German Yearbook of International Law,

vol. 29, 1986,

G. Gaja, “A „New‟ Vienna Convention on Treaties Between States and International

Organizations or Between International Organizations: A Critical

Commentary”, British Yearbook of International Law, vol. 58, 1987,

Greig, D.W., International Law, London, Butterworth, 1970,

H. Isak & G. Loibl, “United Nations Conference on the Law of Treaties Between States

and International Organizations or Between International

Organizations”, Österreichische Zeitschrift für öffentliches Recht und

Völkerrecht, vol. 38, 1987,

Indorf, Hans H, Impediments to Regionalism in Southeast Asia, Singapore, ISEAS, 1984,

Indorf, Hans. H, ASEAN: Problems and Prospects, ISEAS, 1975, p. 9.

K. Zemanek (ed.), Agreements of International Organizations and the Vienna Convention

on the Law of Treaties, Vienna, Springer Verlag, 1971 (Österreichische

Zeitschrift für öffentliches Recht, Supplementum 1).

K. Zemanek, “Agreements Concluded by International Organizations and the Vienna

Convention on the Law of Treaties”, University of Toledo Law Review, vol. 89,

1971,

Keefe, David and Schermers, Henry G, Mixed Agreements, Netherlands, 1984

Mann, F.A., 'Reflection on a Commercial Law of Nations', (1957) XXXIII BYIL 20,

O'Connell, D.P.O, International Law, London, Stevens, Second Ed., 1970, pp. 199-200.

Okeke, Chris N, Controversial Subjects of Contemporary International Law, Rotterdam,

University Press, 1974,

Rama-Montaldo, 'International Legal Personality and Implied Powers of International

Organizations', (1970) BYIL, XLIV, 111,

Report of the ILC in (1967) 61 AJIL 248,

Report of the ILC' in (1967) 61 AJIL 248, p. 288.

Reuter, Paul, International Institutions, George Allen & Unwin Ltd, London, 1958,

Reuter, Paul, Introduction to the Law of Treaties, translated by Jose Mico and Peter

Haggenmacher, London, Pinter Publisher, 1989,

Schermers, Henry. G, International Institutional Law, Netherlands, Sijthoff &

Noordhoff, 1980,

Seyersted, Finn, 'Applicable Law in relations between Intergovernmental Organizations

and Private Parties', (1967) III RdC 122.

Simmonds, K.R., 'The Evolution of the External Relations Law of the European

Economic Community', (1979) ICLQ 28,

Sinclair, I, The Vienna Convention on the Law of Treaties, Manchester, University Press,

Second Ed.


36

Sukrasep, Vinita, ASEAN in International Relations, Bangkok, Institute of Security and

International Studies, 1989,

Thammes, A.J.P, 'Decision of International Organs as a Source of International Law',

(1958) II RdC 261,

Verwey, Delano, The European Community,the European Union and the International

Law of Treaties, Asser Press, 2004,

Von Glahn, Gerhard, Law among Nations, New York, MacMillan, Third Ed., 1976.


37

THE LEGAL IMPLICATION OF THE VOLCANIC ASH

CLOUD CONTINGENCY PLAN

Adrianus Adityo Vito Ramon

Abstrak Beberapa insiden penerbangan yang disebabkan oleh awan panas gunung berapi telah menimbulkan dampak negatif terhadap penerbangan internasional, misalnya dalam kasus letusan Gunung Galunggung, Gunung Redoubt, Gunung Pinatubo, dan Gunung Eyjafjallajökull. Sehubungan dengan hal tersebut, komunitas internasional telah mengambil langkah-langkah yang diperlukan dan menyusun berbagai contingency plan untuk menanggulangi insiden serupa serta untuk memastikan keselamatan penerbangan. Tulisan ini akan menganalisis implikasi hukum atas contingency plan menghadapi awan panas gunung berapi dalam kaitannya dengan hak dan kewajiban para pemangku kepentingan dalam industri penerbangan internasional. Selain itu, tulisan ini juga akan memberikan analisa umum mengenai contingency plan yang ada saat ini, dari tingkat multilateral, kawasan dan nasional, serta memberikan rekomendasi bagi penyusunan contingency plan yang lebih baik. Kata kunci: awan abu vulkanis, rencana tanggap darurat, ICAO, keselamatan penerbangan, tanggung jawab, Konvensi Chicago.

Abstract Several aviation incidents caused by hot cloud of volcanic ash has brought about negative effects on international aviation, such as the eruption of Mount Galunggung, Mount Redoubt, Mount Pinatubo, and Mount Eyjafjallajökull. Therefore, international community has taken necessary measures to set up various contingency plans to overcome such incidents and to assure the aviation safety. This paper will analyze legal implication on contingency plan in overcoming hot cloud of volcanic ash related to the rights and obligations of the stakeholders in international aviation industry. Moreover, this paper


38

will generally analyze prevailing contingency plan as well, at multilateral, regional, and national level; and will suggest recommendations on how to make a good contingency plan. Keywords: volcanic ash cloud, contingency plan, ICAO, aviation safety, liability, Chicago Convention

I. INTRODUCTION

On 24 June 1982, a British Airways flight BA009 was flying out from

London heading for New Zealand with a stopover in Kuala Lumpur and

Perth.12 The flight was a Boeing 747-200 (G-BDXH) aircraft13 piloted by

Captain Eric Moody14 who took-over the flight in Kuala Lumpur.15 The

flight brought 247 passengers and 15 crews.16 At approximately 240 miles

south-east of Jakarta,17 while cruising at an altitude of 37,000 feet, passing

the Indonesian island of Java, when suddenly the flight encountered the

St. Elmo fire18 which was resulted from ‗a discharge of static electricity.‘19

* The views and opinions expressed in this article are those of the author. 12

Zoe Brennan, The Story of BA flight 009 and the Words Every Passenger Dreads. (29

January 2007) Daily Mail <http://www.dailymail.co.uk/news/article-431802/The-story-

BA-flight-009-words-passenger-dreads-.html#ixzz1qJml4WIj>. 13

Accident Description, Aviation Safety Network <http://aviation-

safety.net/database/record.php?id=19820624-0>. 14

Zoe Brennan, Above n 1. 15

Ibid. 16

Accident Description, Above n 2. 17

Ibid. 18

When Volcanic Ash Stopped a Jumbo at 37,000ft (15 April 2010) BBC News Magazine

< http://news.bbc.co.uk/2/hi/uk_news/magazine/8622099.stm>. 19

Ibid.


39

Consequently, all four engines of the aircraft failed abruptly20 and

accordingly, the aircraft glide downward to 12,000 feet.21 Fortunately, the

flight crew was able to restart three engines back.22 That was enough to

divert the flight to Jakarta where it made an emergency landing.23 The

aforementioned descriptions, arguably, illustrates the first recorded

incident of the interferences of volcanic ash cloud towards the aviation

safety.

Another incident was recorded on 15 December 1989, involving a

KLM flight KL867 from Amsterdam to Tokyo with a scheduled stopover

in Anchorage.24 The Flight was Boeing 747-400 (PH-BFC)25 aircraft piloted

by Captain Karl van der Elst.26 There were 231 passengers and 14 crews

onboard the flight.27 Around 75 miles northwest of Anchorage, the flight

flew through volcanic ash clouds from the eruption of Mount Redoubt.28

Consequently, all four engines of the aircraft were suddenly failed29 and

20


When Volcanic Ash Stopped a Jumbo at 37,000ft, Above n 6. 22

Ibid. 23

Ibid. 24

Richard Witkin, Jet Lands Safely After Engines Stop in Flight Through Volcanic Ash

(16 December 1989) The New York Times < http://www.nytimes.com/1989/12/16/us/jet-

lands-safely-after-engines-stop-in-flight-through-volcanic-ash.html>. 25


safety.net/database/record.php?id=19891215-1>. 26

Larry Campbell, A look back at Alaska volcano’s near-downing of a 747 (18 April

2010) Herald Net <http://www.heraldnet.com/article/20100418/NEWS02/704189878>. 27


Richard Witkin, Above n 13. 29

Ibid.


40

the aircraft descended rapidly leaving 25,000 feet to 13,000 feet in a mere

12 minutes.30 It was also reported that there was smoke in the cabin as

well.31 Fortunately, similar with the previous incident, the flights crews

succeed in reviving all engines32 and land the aircraft safely in

Anchorage.33

During the after-flight check of flight BA009, it was found that

microscopic particle of the eruption of volcano of Mount Galunggung,

had damaged essential parts of the engine components, in all four

engines.34 Similarly, the volcanic ash cloud had also inflicted engines

failures on the KLM flight.35 A closer analysis reveals that both aircrafts

suffered damages from the ‗sandblast‘ of the volcanic ash including in the

windshield as well as in the avionics system of the aircraft.36

Both incidents had arguably highlighted the dangerous consequences

of the volcanic ash cloud may cause for aviation safety. As a result, the

international community in multilateral, regional as well as domestic

level had established various contingency plans to ensure the safety of

aviation from the damaging effect of volcanic ash cloud. Those plans may

vary from a mere warning in the notice to airman (NOTAM) to ultimately

30

Larry Campbel, Above n 15. 31


Ibid. 33


When Volcanic Ash Stopped a Jumbo at 37,000ft, Above n 6. 35


Ibid.


41

shutdown an entire airspace. All of those actions will obviously

implicated legal consequences for the entire stakeholder involved in the

aviation industry.

This research will analyse the legal implications of the volcanic ash

cloud contingency plan for all stakeholders in the aviation industry. It will

provide a general analysis of the existing contingency plans. The research

will first discuss the negative impact of volcanic ash cloud towards

aviation safety. It will analyse the process of the volcano eruption, the

materials which comprised volcanic ash cloud and its damaging effects

towards aircraft. It will subsequently see various existing ash cloud

contingency plans. Finally, it will then analyse the legal implications of

the contingency plans vis a vis various stakeholders in the aviation

industry.

II. THE IMPACT OF THE VOLCANIC ASH CLOUD FOR

INTERNATIONAL AVIATION

A volcano is a mountain which assembled ‗around a vent that

connects with reservoirs of molten rock below the surface of the Earth.‘37

Its activity is resulted from ‗the buoyancy and gas pressure‘ which push

the molten rock upward and inflicts an event known as volcano

37

Robert I Tilling, Volcanoes (12 December 1999) United States Geological Survey

<http://pubs.usgs.gov/gip/volc/text.html>.


42

eruption.38 In the event of a volcano eruption, the pushed molten rock will

be discharge from the crater ‗as non-explosive lava flows‘.39 Alternatively,

the molten rock may also be projected into the air to certain altitude form

the infamous volcanic ash cloud.40

There are approximately 1,500 active volcanoes around the world

today.41 Five hundred among those volcanoes had been erupted at least

once in history42 with an average of fifty five to sixty volcanic eruptions

annually.43 The majority of those volcanos are located along the edge of

the continental plate forming a continuous string of line known as the

volcanic ring of fire.44

38

Ibid. 39

Ibid. 40

Ibid. 41

Volcanoes (2 December 2009) European Space Agency

<http://www.esa.int/SPECIALS/Space_for_our_climate/SEM3XU2VQUD_0.html>. 42

Volcano Environments (5 February 1997) United States Geological Survey

<http://pubs.usgs.gov/gip/volc/environments.html>. 43

Jos van Geffen, et al, „An Alert System for Volcanic SO2 Emissions Using Satellite

Measurements‟ (Paper presented at 2009 EUMETSAT Meteorological Satellite

Conference, Bath, England, 21 – 25 September 2009) 3. 44

Ibid.


43

Figure 1 the location of world volcanoes – in red45

There are several types of volcanic eruption. Among those types, the

aviation safety might arguably most impacted by the phreatic eruption

which contains water in-mixture with lave and the plinian type of

eruption which potentially projected a large amount of volcanic ash cloud

into the air.46 Additionally, vulcanologist had also developed the Volcanic

Explosivity Index (VEI) to determine the magnitude of the volcanic

eruption.47 It has nine categories ranging from VEI 0 to VEI 8.48

45

Active Volcanoes and Plate Tectonics, "Hot Spots" and the "Ring of Fire" (1 February

2003) United States Geological Survey

<http://vulcan.wr.usgs.gov/Glossary/PlateTectonics/Maps/

map_plate_tectonics_world.html>. 46

John Watson, Types of Volcanic Eruptions (5 February 1997) United States Geological

Survey <http://pubs.usgs.gov/gip/volc/eruptions.html>. 47

International Civil Aviation Organization (ICAO), Manual on Volcanic Ash,

Radioactive Material and Toxic Chemical Clouds 2nd ed, (2007) International Civil


44

The volcanic ash cloud produced by the eruption may also comprised

various shapes and sizes of sharp silicates glasses,49 feldspar, quartz,

pyroxene,50 aluminium, iron, calcium, and sodium51 which are abrasive

and accordingly may imposed considerable damages towards the

aircraft.52 Furthermore, the volcanic ash cloud also contain various gasses

includes water vapour, chlorine, hydrogen sulphide, nitrogen oxides53 as

well as sulphur dioxide (SO2) gas which very dangerous to the human

health54 and extremely corrosive toward metal compound.55 However,

there is a continuing disagreement on the precise measurement and

composition as well as the actual contact time for the aforementioned

material might be deemed to be hazardous towards aviation safety.56

During a volcanic eruption, the eruption column may reached to the

cruising altitudes of an aircraft57 and forms the umbrella of the ash

Aviation Organization Doc 9691–AN/954

<http://www.paris.icao.int/news/pdf/9691.pdf>, I-1-1 [1.1.1]. 48

Ibid, I-1-3. 49

Ibid, I-2-1 [2.1.1]. 50

Thomas J Casadevall, „Volcanic Hazards and Aviation Safety: Lesson from Past

Decade‟ [1993] (May) Flight Safety Digest 1, 4. 51

ICAO, Above n 36 I-2-1 [2.1.1]. 52

Ibid. 53

Ibid. 54

Jos van Geffen, et al, Above n 32, 3. 55

ICAO, Above n 36, I-2-2 [2.1.4]. 56

Karsten Theil, „What are the safety regulations regarding volcanic ash and why?‟

(Paper presented at Atlantic Conference on Eyjafjallajökull and Aviation, Keflavik,

Iceland, 15 and 16 September 2010), 11. 57

ICAO, Above n 36, I-2-3 [2.2.1.1].


45

plumes which comprised the early stage of the volcanic ash clouds.58 The

ash plumes in the umbrella parts of the eruption column will then travel

and disperse into various altitudes and directions, subject to the current

weather conditions, bringing various volcanic materials and gasses.59

There were also evidences of ‗electrical activities‘ inside the ash clouds

column60 manifested in the form of lightning and St. Elmo fire as seen in

the BA009 incident.

Figure 2 eruption column and umbrella61

The negative consequences of the volcanic ash cloud towards aircraft

are further categorized into several classifications. One of those

categorized the stage of the materialization of the effects.62 There are

effects which directly felt by the aircraft63 which include damages on the

58

Ibid, I-2-9 [2.4.1]. 59

Ibid, I-2-10 [2.4.1]. 60

Ibid, I-2-9 [2.3.1]. 61

Ibid, I-2-5, Figure 2-4. 62

Thomas J Casadevall, Above n 39. 63

Ibid.

Umbrella

Eruption column


46

windows, external navigational lights, air supply system and on the

fuselage.64 The volcanic ashes may also intrude the air supply system of

the aircraft and significantly danger the safety of the passengers and

crews with polluted air.65 Another significant damage in these categories

is engine failure from the erosion of the engine components and from the

scrape of the engine component with the sharp volcanic material or from

the massing of volcanic materials inside the engine and clog the flow of

the engine parts.66

Other damages may not as obvious and might need some time until it

become noticeable. The chemical composition of gasses in the volcanic ash

clouds may potentially inflicted corrosion on various parts of the aircraft

which need some time to occur.67 The corrosion may cause significant

structural failures of the aircraft body. This type of damage requires a

continuous check-up of the aircraft since the damages might only be

reveal for sometime after the actual exposure.

Another classification focussed on the severity of the volcanic ash

cloud impact toward the aircraft which being categorized into six

classes.68 It started from Class 0, the least severe of the impact until Class

64

Ibid. 65

Ibid, 5. 66

Ibid. 67

Ibid. 68

ICAO, Above n 36, Appendix G-8.


47

5, the most severe consequences.69 Class 0 marked with sulphuric odour

in the cabin and ‗electrostatic discharge‘ usually in the form of St. Elmo‘s

fire on the exterior without any considerable damage towards the

aircraft.70 Class 1 is manifested in the form of ‗light dust in cabin‘ and the

variation on the ‗exhaust gas temperature,‘.‘71 Class 2 sees the occurrence

of ‗heavy cabin dust,‘ the intrusion of dusk into the air system, exterior

damages, include abrasion, frosting or breaking of windows, minor flight

instruments failures and the massing of ashes in the engines.72 Class 3

marked with the ‗vibration of engines,‘ a severe instruments failures,

intrusion of ashes into the hydraulic system, and electrical failures.73 Class

4 is sees momentary engine failure which able to be revived.74 Class 5 is

the most severe effect of volcanic ash. It sees ‗engine failure or other

damage leading the aircraft to crash.‘75

69

Ibid. 70

Ibid. 71

Ibid. 72

Ibid. 73

Ibid. 74

Ibid. 75

Ibid.


48

Figure 3 the damages on aircraft engine due to volcanic ash cloud76

Looking at the examples provided in the introduction, both incidents

arguably categorized as Class 4 incident. It was understood that the

British Airways flight BA009 had experienced significant damages in

various parts of the engines caused by extensive erosion and clogging of

the volcanic materials into the engines system77 as well as considerable

exterior damages, including the flight deck windshield and various parts

of the fuselage.78 Likewise, the KLM flight had also endured various

degrees of damages in its four engines which caused by the intrusion and

76

Airbus Flight Operations Briefing Notes Operating Environment Volcanic Ash

Awareness‟ (September 2006) Airbus

<http://www.airbus.com/fileadmin/media_gallery/files/safety_library_items/AirbusSafety

Lib_-FLT_OPS-OPS_ENV-SEQ06.pdf>. 77

Thomas J Casadevall, Above n 39, 1. 78

Ibid.

Volcanic

materials melt in

the combustion

chambers

The

accumulation

of the melted

volcanic

materials in the

turbine

Compressor blade

edge erosion from

the sharp volcanic

material


49

blockage of volcanic materials.79 Its fuselage also suffered considerably

from the scrapes of the volcanic materials.80

From 1953 until 2009, there were 129 reported incidents of volcanic

ash clouds encounter with aircraft.81 The data is gathered by the United

States Geological Survey and shared to various related institution,

including to the ICAO International Airways Volcano Watch Operations

Group.82 Among those reported incidents, the majority, approximately

75% of all reported incidents, were categorized in Class 0 until Class 2

incidents.83 Fortunately, there is yet to be a Class 5 incident occurred.84

Additionally, volcanic ash clouds may also effected others element of

the aviation industry. The Volcanic ash clouds may also have the

potential to significantly undermine the operation of the airport.85 The

79

Ibid. 80

Jos van Geffen, et al, Above n 32, 2. 81

Marianne Guffanti, T J Casadevall, and Karin Budding, Encounters of Aircraft with

Volcanic Ash Clouds; A Compilation of Known Incidents, 1953–2009 (2010) U.S.

Geological Survey Data Series 545 <http://pubs.usgs.gov/ds/545>. 82

Overview of Database on Encounters of Aircraft with Volcanic Ash-Clouds. Fifth

Meeting of the ICAO International Airways Volcano Watch Operations Group Agenda

Item 5.4 Updating of the worldwide ash encounter database (including the model VAR)

ICAO Doc IAVWOPSG/5-IP/10 15/1/10 (15-19 March 2010). 83

Marianne Guffanti, T J Casadevall, and Karin Budding, Encounters of Aircraft with

Volcanic-Ash Clouds: An Overview, Department of Geological and Mining Engineering

and Sciences, Michigan Technological University

<http://www.geo.mtu.edu/~gbluth/Teaching/GE4150/lecture_pdfs/

L7a_aircraft_hazards.pdf>. 84

Ibid. 85

ICAO, Above n 36, I-5-1.


50

Volcanic ashes may also cover the airport which accordingly deemed to

be inoperable as seen during the eruption of Mt. Pinatubo.86

In conclusion, in spite of the slight disagreement on the actual

composition and length contact time, there is a significant prove on the

considerable negative effect of volcanic ash clouds towards aviation

safety. Consequently, international community had taken necessary

respond and established various contingency plans to mitigate the

incidents and to ensure the safety of the aircraft. The responds had come

from multiple sectors, started from an orchestrated multilateral effort

under the auspices of the International Civil Aviation Organization (ICAO)

to the regional and domestic level.

III. THE VOLCANIC ASH CLOUD CONTINGENCY PLAN

Pursuant to the provision of the Chicago Convention on the authority of

the ICAO to established an international standard on the safety of air

navigation,87 the ICAO had prepare several instruments such as the

Procedures of Air Navigation Services (PANS),88 which later expanded by

the ICAO Air Navigation Commission by prepared an ‗interim

guidelines,‘ and adopted by the ICAO council in March 1987, as an

86

Ibid, 1-5-2. 87

Convention on International Civil Aviation, opened for signature 7 December 1944, 15

UNTS 295 (entered into force 4 April 1947), art. 28. 88

Procedures for Air Navigation Services Rules of the Air and Air Traffic Services,

International Civil Aviation Organization (ICAO) Doc 4444-RAC/501.


51

amendment to PANS.89 The ICAO also established the Manual for

Aeronautical Meteorology Practice which focused on the meteorology

aspects of the aviation.90 The PANS amendment, lead to the development

of the ICAO International Airways Volcano Watch (IAVW)91 which

established pursuant to the provisions of Annex 3-Meteorological Service

for International Air Navigation92 and Annex 11-Air Traffic Service and

Annex 15-Aeronautic Information Services of the Chicago Convention.93

The ICAO IAVW is mandated to coordinate the monitoring and

subsequent dissemination of the information for the existence of volcanic

ash clouds in atmosphere using information provided by various sources

included the member states as well as other international organization.94

89

ICAO, Above n 36, iii-iv. 90

ICAO Doc 8896. 91

ICAO, Above n 36, iii-iv. 92

Raúl Romero, International Airways Volcanoes Watch, International Civil Aviation

Organization

<http://www.paris.icao.int/Met/Volc_Ash/VA_awareness_workshop/International%20Air

ways%20Volcano%20Watch%20%28IAVW%29%20-%20ICAO.pdf>. 93

Karsten Theil, Above n 45, 13. 94

Raúl Romero, Above n 81.


52

Figure 4 the flow of information in ICAO IAVW95

The ICAO IAVW, had further designated nine regional Volcanic Ash

Advisory Centre (VAAC) which pursuant to Annex 3, 3.5.1 of the Chicago

Convention and in accordance to the regional air navigation agreement,

would be conducting around the clock watch over the volcanic activities

and its effect to the aviation world within its own designated regional

area.96 The information gathered by VAAC would then be disseminated

to all related stakeholders in this issues, included meteorological watch

offices, others VAAC as well as airline companies.97

95

International Airways Volcano Watch (IAVW) of ICAO, International Civil Aviation

Organization <http://www.paris.icao.int/news/20100415_IAVW_ICAO.htm>. 96

Ibid. 97

Raúl Romero, Above n 81.


53

Figure 5 regional VAAC 98

Furthermore, to support the ICAO council functions in coordinating

the flow of information within the ICAO IAVW, in developing the IAVW

as well as in advising the ICAO with regards to the future of the IAVW,

the ICAO established the ICAO IAVW Operation Group in 2002.99 It

composed representatives from the nine and related international

organization such as the International Air Transport Association,

International Federation of Air Line Pilots‘ Associations, the International

98

Ibid. 99

Ibid.


54

Union of Geodesy and Geophysics, and the World Meteorological

Organization.100

The ICAO IAVW arguably has two main functions. First, it monitored

volcanic activities around the world using data from various sources,

including volcanic observatories as well as real-time aircraft report.101

This function arguably serves as a pre-emptive function since it was

activated before any actual volcanic eruption occurred. The second

function is to disseminate warnings for any volcanic threat to the aviation

safety.102 It also provide specific information with regard to the detail of

the volcanic threat, inter alia the coverage area of the volcanic ash cloud,

the altitude, the direction of its movement, as well as the composition of

the ash cloud.103 This function arguably aimed to mitigate the volcanic

incidents to prevent significant damages towards aviation safety.

Additionally, another pertinent role of the ICAO IAVW is to provide

check-list of procedures for various stakeholders, including the area

control centre, international NOTAM office, meteorological watch office

and for pilot in command of an aircraft, prior and during a volcanic ash

cloud emergency.104

100

Ibid. 101

Ibid. 102

Ibid. 103

Ibid. 104

Handbook on the International Airways Volcano Watch (IAVW) Operational

Procedures and Contact List Second Edition-2004 ICAO Doc 9766-AN/968.


55

The latest development for the ICAO plans occurred following the

eruption of Mt. Eyjafjallajökull in Iceland on April – May 2010 when the

ICAO established the International Volcanic Ash Task Force (IVATF) as

an interim group specifically aimed to evaluate the performance of

various contingency plans in mitigating the Eyjafjallajökull eruption as

well as to analyse the necessary revision and development to the plans.105

In addition to the aforementioned ICAO multilateral framework,

several ICAO Regions, such as the European (EUR) and North Atlantic

(NAT) as well as Caribbean (CAR) Regions, had also developed its own

contingency plan which arguably has a more technical feature compared

to the ICAO multilateral standard.106 The ICAO EUR and NAT

contingency plan distinguished the respond into three different phases,

‗alerting phase‘ which focussed on the ‗initial responds‘ in the event of an

imminent volcanic emergency, ‗reactive phase‘ when the volcanic

emergency started, and ‗proactive phase‘ which commenced after the

issuance of ‗the first Volcanic Ash Advisory and Volcanic Ash Graphic.‘107

105

Composition and Terms of Reference of the International Volcanic Ash Task Force,

ICAO

<http://www.icao.int/safety/meteorology/ivatf/Documents/TERMS%20OF%20REFERE

NCE.pdf>. 106

International Volcanic Ash Task Force First Meeting Agenda Item 4.1 ICAO Doc

IVATF/1-DP/4 (29/7/10), [1.1.1]. 107

International Civil Aviation Organization Volcanic Ash Contingency Plan EUR and

NAT Regions EUR Doc 019 NAT Doc 006, Part II (December 2010), 2-3.


56

The CAR contingency plan also has three different phases.108 Slightly

different, CAR contingency plan is divided into ‗strategic phase, pre-

tactical, and tactical phase‘ albeit the similarity of the provisions of both

plans.109

Other regional organizations such as the European Aviation Safety

Agency had also take a more coordinative role and emphasises on the

support for the dissemination of the information, as pre-emptive measure,

and warning, as mitigating measure, of any volcanic emergency.110 They

would then rely on the individual member countries to implement the

necessary mitigating action towards the volcanic ash cloud emergency as

also mandated by the ICAO contingency plans.111

Thus, notwithstanding to the aforementioned multilateral as well as

regional contingency plans, it is fair to suggest that the contingency plans

of a particular countries are, actually, acted as the spearhead for the

orchestrated contingency plan to address the danger of volcanic ash cloud

towards aviation safety since the multilateral and regional plans need to

108

Regional Caribbean Contingency Procedures for Volcanic Ash, International Civil

Aviation Organization North American, Central American, and Caribbean Regional

Office

<http://www.mexico.icao.int/ATM/APX%20Volcanic%20Ash%20Contingency%20Proc

edures%2004%2030%202008.pdf>. 109

Ibid. 110

Flight in Airspace with contamination of Volcanic Ash, EASA Safety Information

Bulletin SIB No.: 2010-17R4 (24 May 2011). 111

Alberto Alemanno, „The European Regulatory Response to the Volcanic Ash Crisis

between Fragmentation and Integration‟ (2010) 2 European Journal of Risk Regulation

110, 104.


57

be adapted by the national contingency plans. These situations may

arguably be resulted from the current practice in international air law

which focused on the jurisdiction of a particular country.

Countries further categorized into those who had control over a

particular Flight Information Region (FIR) area and those countries which

become the ‗operator/state of registry‘ of airline companies.112

Accordingly, the responsibilities of those countries are also distinct. The

registry countries have to adopt and implement mitigating procedures to

enabled airline companies to make risk assessment over the danger of

volcanic ash cloud. The FIR countries have a greater responsibility since

they need to contribute the information and monitoring data to the wider

monitoring system as well as developing comprehensive pre-emptive

procedures. Furthermore, the ultimate power in responding to the danger

of the volcanic ash cloud is also arguably retained by the civil aviation

authority of a particular country as seen during the Eyjafjallajökull

eruption where the UK civil aviation authority suspend all air traffic in

UK air-space.113 The steps taken by the civil aviation authority of a

particular country to mitigate the emergency would undeniably implicate

legal consequences to all related stakeholder. One of the examples as seen

112

Karsten Theil, Above n 45, 17. 113

Peter Sammonds, Bill McGuire and Stephen Edwards (eds), Volcanic Hazard From

Iceland Analysis and Implications of the Eyjafjallajökull Eruption (UCL Institute for Risk

and Disaster Reduction), 8.


58

in the closure of the airspace during Eyjafjallajökull eruption resulted to

serious havoc in aviation industry leaving millions of passengers

stranded.114

IV. THE LEGAL IMPLICATIONS OF THE VOLCANIC ASH

CLOUD CONTINGENCY PLAN

Taking the Eyjafjallajökull eruption as an example, in general, there

are several legal liabilities which may be able to be asserted,115

notwithstanding to the general understanding that natural disaster

supposedly construed as a waiver in most legal issues.116 The first

focussed on the decision of the regulator to shut-down the airspace

pursuant to the contingency plans.117 This liability arose from claimed

made by several airlines that the decision of the aviation regulator was

excessive and without prior consultation with all related stakeholders,

includes the airline industry, and accordingly had caused significant

losses to the industry since the airlines were obliged to provide necessary

arrangements to the effected passengers, pursuant to Regulation (EC)

261/2004 of the European Parliament and of the Council on of 11 February 2004

114

Ibid. 115

Ruwantissa Abeyratne, „Responsibility and Liability Aspects of the Icelandic Volcanic

Eruption‟ (2010) 35 (4/5) Air and Space Law 281, 285-291. 116

John Richards, The Legal Consequences of the Iceland Volcano (11 May 2010) Law

Blog <http://lawblog.legalmatch.com/2010/05/11/legal-consequences-of-the-iceland-

volcano/>. 117

Ruwantissa Abeyratne, Above n 104, 285.


59

establishing common rules on compensation and assistance to passengers in the

event of denied boarding and of cancellation or long delay of flights, and repealing

Regulation (EEC) No 295/91,118 regardless to the loss of revenue inflicted to

them.119 This liability claim may arguably originate from the

disagreements on the actual the measurement and composition as well as

the actual contact time for the volcanic materials might be deemed to be

hazardous towards aviation safety.120

However, the regulator had very strong argument to support its

stance. The Chicago Convention had provide the regulator with

obligations to facilitate air navigation services to ensure the safety of

aviation as stipulated in article 28 and Annex 3 of the Chicago

Convention121 which had become the bases for the development of the

contingency plans. Furthermore, since the decision to suspend all flight

by the regulator supposedly construed as the ‗discretion‘ of the regulator

which implemented the ‗statutory duty of care,‘ thus, as shown in various

case laws discussed by Ruwantissa Abeyratne, the claimant need to prove

118

Regulation (EC) 261/2004 of the European Parliament and of the Council on of 11

February 2004 establishing common rules on compensation and assistance to passengers

in the event of denied boarding and of cancellation or long delay of flights, and repealing

Regulation (EEC) No 295/91 [2004] OJ L 46/1. 119

Ruwantissa Abeyratne, Above n 104, 285. 120

Karsten Theil, Above n 45. 121

Ruwantissa Abeyratne, Above n 104, 285 citing Chicago Convention 1944, art. 28,

Annex 3.


60

the negligence which undermined the capability of the regulator to

undertake such obligations.122

The airlines companies also obviously become liable to its passengers

for delay in the flight in accordance by Article 19 of the 1929 Warsaw

Convention,123 which also become Article 19 of the 1999 Montreal

Convention.124 Furthermore, for airlines which departed from the EU, the

Regulation (EC) 261/2004 should be remain enforced upon them and

made the airlines companies liable for the delay of the flight.125

Nevertheless, the provisions of the Warsaw Convention126 further ruled

that the liability of the airlines may be limited if the airlines, along with its

agents, had conducted all ‗necessary measures‘ to avoid the delay. The

volcano eruption should arguably be included in those exceptions.127

However, in accordance with the aforementioned EU regulations, as

122

Ibid, 288. 123

Convention for the Unification of Certain Rules Relating to International

Transportation by Air, opened for signature 12 October 1929, 137 LNTS 11 (entered into

force 13 February 1933), art. 19. 124

Convention for the Unification of Certain Rules for International Carriage by Air,

opened for signature 28 May 1999, 2242 UNTS 350 (entered into force 4 November

2003), art. 19. 125

Air travel: volcanic ash cloud - EU passenger rights continue to apply (15 April 2010)

European Union

<http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/131&format=HTM

L&aged=1&language=EN&guiLanguage=en>. 126

Warsaw Convention 1929, art. 20. 127

Ruwantissa Abeyratne, Above n 104, 290.


61

shown in the case of Eyjafjallajökull eruption, the airlines operated in

Europe retain their liability.

The third liability arose in relation to the passenger insurance. In an

unprecedented stance, the UK Financial Ombudsman Service had ruled

in-favour for a plaintiff who claims that volcanic ash cloud should be

construed as ‗poor-weather conditions‘ in contradiction to the insurance

companies which determines otherwise.128 Accordingly, the insurance

company should make adequate compensation to the claimant pursuant

to the insurance policy. This ruling potentially become an influential

decision for a significant number of insurance cases in the future which

related to the ash cloud emergency and added to the complexity of the

legal issues surrounding the volcanic ash cloud contingency plans since it

would potentially add to the financial obligation which need to be paid

by one of the stakeholder, the insurance company, during that kind of

situation.

The aforementioned three potential liabilities arguably described an

imbalance of legal implication which arises from the volcanic ash cloud

contingency plans. The current system had excessively protected the

passengers, as it should be, and the regulators whilst in the same time

have inflicted significant obligations to the airlines and the insurance

128

Financial Ombudsman Service, Final Decision Ms. B (March 2010)

<http://www.financial-ombudsman.org.uk/publications/technical_notes/travel-insurance-

ash-mar11.pdf>.


62

companies whereas supposedly, the system creates a balance between

those interests.

Thus, a more comprehensive framework may be needed to

accommodate this need for a novel and balanced legal regime as well as

to addressed legal loop-hole currently exist such as the absent of clear

liability on the failure to disseminate proper information with regard to

the volcanic ash cloud emergency by the relevant authority. The

momentum of the comprehensive review of the ICAO volcanic ash cloud

contingency plans undertakes by the IVATF subsequent to the Icelandic

eruption should be utilized to overhaul the existing systems and create a

more balanced system to all stakeholders. The liability system in this

regards should arguably take more into account the decision making

process by the regulator in responding to the volcanic ash cloud

emergency since that decision would serve as the bases for further action

by all stakeholders in responding for such emergency.

The passenger as the consumer, arguably, should always have the

greatest protection from the risk the airline industry might bring,

including for the delay or even cancellation of services due to the

disruption brought by the volcanic ash cloud. Yet, those protections

should not excessively burden the airline industry which also suffered

tremendous losses during the ash cloud emergency.

Thus, the ICAO should strive to establish a liability system where the

regulator, in responding to the volcanic ash cloud emergency, operates

pursuant to a certain set of standard, based on technical as well as


63

scientific features on the volcanic ash cloud emergency and its relations to

the safety of civil aviation. The current practice where the regulator may

decide the appropriate respond for the volcanic ash cloud emergency

based on its own discretion should be amended with a system where the

regulator based its respond pursuant to a specific factor, agreed and

decided internationally, and focussed on the technical and scientific

elements and its relation to the civil aviation safety, as well as the losses

incurred by all parties, including the passenger and the airline industry.

With a clear and specific benchmark as bases for the regulator

decision-making-process, all stakeholders would have a common

understanding and knowledge for its respective rights and obligations.

The negligence-of-the-regulator factor that previously essentially need to

be proven would no longer construed as the sole basis to questioned the

regulator decision in responding the volcanic ash cloud emergency.

Instead, the regulator would need to abide with the standard and

benchmark in deciding the appropriate respond, including to directly

assisting the airline during the volcanic ash cloud emergency condition.

That would subsequently enable the other stakeholders to easily observe

the adherence of the regulator to the pre-established international

standard in its decision-making-process for its respond towards the ash

cloud emergency condition. In the event that the regulator failed to

implement the standard, the regulator should also become liable for its

failure. This framework would arguably create a more balanced liability

system where the airline would not bear the sole liability in this regard,


64

yet the regulator should also accounted for its respond during the

emergency situation.

V. CONCLUSION

In responding to the obvious hazardous effects of volcanic ash clouds

towards aviation safety, the international community had established

various contingency plans, started from multilateral level, under the

auspices of the ICAO, regional level and in domestic level. The ICAO

contingency plans are aimed to coordinate international efforts in

monitoring as well as disseminating information on volcanic emergency.

A similar function also existed for regional plans, in a more technical

aspect and a narrower area. However in practice, all of those plans,

arguably, still rely on the implementation on the domestic level of each

particular country which would, generally, adapt the existing ICAO

contingency plans and, if any, a regional contingency plans.

Focussing on the legal implication of those plans, there was

suggestion which argues that the current legal frameworks may not

provide a balance legal implication for all stakeholders related to this

issue. Those opinions underline the excessive protection for passengers

whilst in the same time inflicted significant liabilities to the airlines. In the

end, international community should address this issue with

comprehensively amending the current legal frameworks to create a more

balance rights and obligations to all stakeholders, including for a greater


65

involvement of the domestic authority to support airlines during volcanic

emergency.

BIBLIOGRAPHY A. Articles/Books/Reports

Abeyratne, Ruwantissa, „Responsibility and Liability Aspects of the Icelandic Volcanic

Eruption‟ (2010) 35 (4/5) Air and Space Law 281


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Active Volcanoes and Plate Tectonics, "Hot Spots" and the "Ring of Fire" (1 February

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International Civil Aviation Organization Volcanic Ash Contingency Plan EUR and NAT

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International Volcanic Ash Task Force First Meeting Agenda Item 4.1 ICAO Doc

IVATF/1-DP/4 (29/7/10)

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<http://www.mexico.icao.int/ATM/APX%20Volcanic%20Ash%20Contingency%20

Procedures%2004%2030%202008.pdf>

Richards, John, The Legal Consequences of the Iceland Volcano (11 May 2010) Law

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67

Sammonds, Peter, Bill McGuire and Stephen Edwards (eds), Volcanic Hazard From

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B. Cases

Financial Ombudsman Service, Final Decision Ms. B (March 2010)

<http://www.financial-ombudsman.org.uk/publications/technical_notes/travel-

insurance-ash-mar11.pdf>

C. Legislations/Treaties

Convention on International Civil Aviation, opened for signature 7 December 1944, 15

UNTS 295 (entered into force 4 April 1947)

Convention for the Unification of Certain Rules Relating to International Transportation

by Air, opened for signature 12 October 1929, 137 LNTS 11 (entered into force 13

February 1933).

Convention for the Unification of Certain Rules for International Carriage by Air, opened

for signature 28 May 1999, 2242 UNTS 350 (entered into force 4 November 2003)

Regulation (EC) 261/2004 of the European Parliament and of the Council on of 11

February 2004 establishing common rules on compensation and assistance to

passengers in the event of denied boarding and of cancellation or long delay of

flights, and repealing Regulation (EEC) No 295/91 [2004] OJ L 46/1.


68

GLOBAL GOVERNANCE IN A GLOBALIZING

WORLD: DO GLOBALIZATION AND GLOBAL

GOVERNANCE ERODE NATIONAL SOVEREIGNTY?

Frassminggi Kamasa

Abstrak

Tulisan ini membahas mengenai hubungan antara globalisasi dan pemerintahan global dan efeknya terhadap kedaulatan bangsa dan negara. Secara khusus, tulisan ini akan mengkaji secara empiris proses globalisasi dan pemerintahan global yang telah mengakibatkan erosi terhadap kedaulatan negara yang bersumber dari ide Westphalia. Berbeda dengan kajian-kajan yang lain, tulisan ini mempertimbangkan apakah pemerintahan nasional yang lemah, berbagai tekanan dalam proses globalisasi, dan kompleksitas pemerintahan global dapat menjelaskan fenomena kedaulatan bangsa dan negara yang mulai terkikis. Perkembangan yang demikian akan mengurangi kapasitas negara dan konsolidasi nasional dalam mengatur urusan dalam dan luar negeri. Sebagai tambahan, akan dianalisa apakah proses dan interaksi globalisasi dan pemerintahan global bersifat otonom atau justru merupakan ekspresi dari hegemoni Barat. Dengan menggunakan analisis studi kasus tunggal mengenai globalisasi dan pemerintahan global yang terjadi di Indonesia dari tahun 1997—2007, ditemukan asosiasi antara globalisasi, pemerintahan global, dan kompleksitas pemerintahan global. Selanjutnya juga akan dibuktikan bahwa interaksi antara berbagai tekanan dalam proses globalisasi dan kompleksitas pemerintahan global menghambat kepentingan pemerintah untuk mengembangkan ketahanan nasional dan pembangunan bangsa dan negara. Kata kunci: kedaulatan bangsa dan negara, globalisasi, pemerintahan global, pembangunan.


69

Abstract

This paper discusses the relationship between globalization and global

governance and its effect on the nation’s sovereignty. Particularly, this paper

will empirically examine the process of globalization and global governance that

has resulted in the erosion of national sovereignty that comes from the idea of

Westphalia. In contrast to other studies, this paper considers whether the

national governments are weak, the pressures of globalization processes, and

the complexity of global governance may explain the dawn of the erosion of the

sovereignty of the nation and the state. Such developments will reduce the

capacity of the state and national consolidation in regulating domestic and

foreign affairs. In addition, it will be analyzed whether the process and the

interaction of globalization and global governance are autonomous or even an

expression of Western hegemony. By using a single case study analysis on

globalization and global governance that occurred in Indonesia from 1997-

2007, we found relationship between globalization, global governance, and the

complexity of global governance. Furthermore it will be proved that the

interaction between the various pressures in the process of globalization and

global governance complexity hamper the interests of the government to develop

a national security and nation building .

Keywords: state sovereignty, globalization, global governance, development.

Introduction

This study investigates Indonesia from 1997-2007. In this study I will

discuss the question about whether globalization and global governance

erodes Indonesia‘s national sovereignty. I will divide this essay into three

sections. The first section analyzes the cause-and-effect relationships

between a weak national government, globalization, and global

governance that erode national sovereignty. The second section

investigates how globalization pressure is likely to have the effect of

eroding national sovereignty. The third section examines how the global

governance complex explains the erosion of national sovereignty.


70

My research question is: ―Does globalization and global governance

erode national sovereignty?‖ The study‘s hypotheses may include the

following: (1) state being weakened by the process of globalization and

global governance. A weak national government will lead to an erosionin

national sovereignty. (2) globalization and global governance is less an

autonomous process, and more of an expression of United States

hegemony, this coupled with an economic downturn will lead to erode

national sovereignty.

My first hypothesis, as pointed out by Freiden (2006:471) and Griffiths

(2008:132), is that globalization and global governance weaken national

government and state capacity. In the complex multidimensional

processes of globalization and global governance, the state‘s capacity for

independent political action is weakened. My second hypothesis as

outlined by Gilpin (1987:45) and critical theorists, is that regimes, values,

and agenda setting in globalization and global governance are skewed.

Partisan processes of globalization and global governance have significant

effects on the erosion of state sovereignty.

The debates in International Relations (IR) about global governance

are extensive and voluminous. One of the debates on global governance is

focused on ―whether national sovereignty is being eroded.‖129

129

Quoted in Farrington, J. (2002, October). Sovereignty and Global Governance.

Retrieved July 27, 2012, from Department for International Development:

http://www.odi.org.uk/resources/docs/3171.pdf.

http://www.odi.org.uk/resources/docs/3171.pdf


71

Sovereignty is defined as supreme authority over a given territory

withthe authority to make laws and regulations for that society.130

Globalizationis―a trend of increasing transnational flows and increasingly

thick networks of interdependence.‖131 The Functional paradigm views

global governance as universal liberal democracy.132 According to

Pattberg, ―in simple terms, global governance means to steer the process

of globalization.‖133

Many scholars pointed out that global governance in the form of thick

globalism and liberal international economic institutions represented only

the interests of industrial countries and northern corporations, which

ruled in a way that was autocratic, deceptive, exploitative, hypocritical,

and imperialistic.134 Thus, from the ideological point of view, the project

130

Krasner, S. (2001). Rethinking the sovereign state model. Review of International

Studies (27, 17-42), pp. 19-29 131

Quoted in Keohane, R. (2002).Power and Governance in a Partially Globalized World.

London: Routledge, p. 15. 132

Ardalan, K. (2011). Globalization and Democracy: Four Paradigmatic Views.

Transcience Journal , Vol. 2, No 1 (2011), 30-31. Available at http://www2.hu-

berlin.de/transcience/Vol2_Issue1_2011_26_53.pdf. 133

Quoted in Patberg, P. (2006). Global Governance: Reconstructing a Contested Social

Science Concept. Garnett Working Paper, 13. Available at

http://www2.warwick.ac.uk/fac/soc/garnet/workingpapers/0406.pdf. 134

Balaam, D., & Veseth, M. (1996). Introduction to International Political Economy.

New Jersey: Prentice Hall, pp. 221-223; Barry Buzan&Ole Wæver. (2003). Regions and

Powers: The Structure of International Security. Cambridge: Cambridge University

Press, p. 10; Eayrs, J. (1992). The Outlook of Statehood. In H. Levine, World Politics

Debate: a Reader in Contemporary Issues (pp. 16-23). New York: McGraw-Hill, Inc;

Frieden, J. (2006). Global Capitalism: Its Fall and Rise in the Twentieth Century. New

York: W.W. Norton & Company, p. 469; Perkins, J. (2009); Hoodwinked. An Economic

http://www2.hu-berlin.de/transcience/Vol2_Issue1_2011_26_53.pdf


http://www2.warwick.ac.uk/fac/soc/garnet/workingpapers/0406.pdf


72

of liberalism is, among other things, about building a sense of uniformity

and the incorporation of all mankind into a single idea free from

restrictions of political boundaries.135 The sovereign state‘s capacity for

independent political action is weakened by globalization, especially in

the area of economic policy.136― National governments had ceded power

to the WTO and the IMF or had this power seized from them by

international markets.‖137 According to critical theorists, such as Cox,

Rosenberg, and Cutler, the emergence of the modern states system is

actually the development of a new form of imperial power, and

hegemony, in which the growing influence of private actors has blurred

the boundaries between private and public authority in the global

realm.138 In each of these analyses, it is clear that there is some erosion of

Hit Man Reveals Why the World Financial Markets Imploded and What We Need to Do

to Remake Them. New York: Broadway Books, pp. 101, 134; Rais, A. (2008). Agenda

Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of the Nation: Save

Indonesia!). 135

Gilpin, R. (1987). The Political Economy of International Relations. New Jersey:

Princeton University Press, pp. 45-46; Perkins, J. (2004). Confessions of an Economic Hit

Man. California: Berret-Koehler Publishers, Inc; pp. 8-10, 15-17, 120-129; Rais, A.

(2008). Agenda Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of the Nation:

Save Indonesia!). Yogyakarta: PPSK Press, pp. 11-18; Thirkell-White, B., Grugel, J., &

Riggirozzi, P. (2008). Beyond the Washington Consensus? Asia and Latin America in

search of more autonomous development. International Affairs (84:3) , pp. 501-504. 136

Griffiths, M., O'Callaghan, T., & Roach, S. (2008). International Relations: The Key

Concepts. New York: Routledge, p. 132. 137

Quoted in Frieden, J. (2006).Global Capitalism: Its Fall and Rise in the Twentieth

Century. New York: W.W. Norton & Company, p. 471. 138

Roach, S. (2007). Critical Theory and International Relations: a Reader. London:

Routledge, pp. 267-283.


73

national sovereignty by the processes of globalization and global

governance. It also suggests that the process is less autonomous.

A case study of Indonesia

a. Weak national government

The Republic of Indonesia is the world‘s largest archipelago with

13,487 islands and anarea of 5,193,250 km². It is a ―fragile‖ country with a

population of 240 million people occupying 400 ethnicities and speaking

583 local languages. Indonesian society is united in one principle, which is

Pancasila (five principles), and has a national motto Bhineka Tunggal Ika

(unity in diversity). Indonesia also has the world‘s largest Muslim

population. Given this background, there is no wonder that governance is

a delicate action for the national government. With increasing global

political interdependence and integration, Indonesian national

sovereigntymay have become vulnerable and weakened by less

autonomous processes of globalization and global governance.

A weak government can be measured from three principles of poor

governance. Poor governance can be defined simply as the contrary of

good governance.139 In my view, a weak national government is the

139

Nasution, A. (2009, February 13).

http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf.

Retrieved August 15, 2012, from BPK:

http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf;

Force, P. T. (2002, June). Ensuring Good Governance for Poverty Reduction. Retrieved

http://www.bpk.go.id/web/files/2009/02/corruption2009-vienna-11-13-feb-2009.pdf


74

condition of lacking political power, social power and lack of influence of

the leadership or elites in running the state. It is manifest in the lack of

capability or poor management of the governing body to run the system,

take action, control, or regulatethe stateorganization and the people. This

can be seen from the poor governance indicators such as the high level of

national debt, the high level of corruption, and income inequality.

The first principle of poor governance is a high level of national debt.

Debt plus lots of interest leads to disappearing freedom. Since the Cold

War, globalization agencies were using loans as a main instrument of

hegemony by justifying huge international loans that would funnel back

to the hegemony through massive engineering project and bankrupt the

countries that received these loans so they would be forever beholden to

their creditors.140 This system has been called a ―Marshall Plan in reverse‖

where ―payments on Third World debt require more than $375 billion a

year, twenty times the amount of foreign aid that Third World countries

August 27, 2012, from World Bank:

http://siteresources.worldbank.org/INTVIETNAM/Resources/Localizing-MGDs-for-

Poverty5.pdf, pp. 2;Koh, T. (2009, October 7); Lecture on The Principles of Good

Governance. Retrieved 13 August, 2012, from National University Singapore:

http://www.spp.nus.edu.sg/ips/docs/pub/sp_tk_The%20Principles%20of%20Good%20Go

vernance_071009.pdf; Khemani, M. (2008, March 6). Combating corruption in the

Commonwealth. Retrieved Auguts 20, 2012, from Commonwealth Quarterly:

http://www.thecommonwealth.org/EZInformation/176102/060308combating/. 140

Rais, A. (2008). Agenda Mendesak Bangsa. Selamatkan Indonesia! (Urgent Agenda of

the Nation: Save Indonesia!). Yogyakarta: PPSK Press, pp. 1-2, 23-24; Perkins, J. (2004).

Confessions of an Economic Hit Man. California: Berret-Koehler Publishers, Inc, pp. 15,

203-205.

http://siteresources.worldbank.org/INTVIETNAM/Resources/Localizing-MGDs-for-Poverty5.pdf


http://www.spp.nus.edu.sg/ips/docs/pub/sp_tk_The%20Principles%20of%20Good%20Governance_071009.pdf


http://www.thecommonwealth.org/EZInformation/176102/060308combating/


75

receive with the countries of the Global South subsidizing the wealthy

North, even as half the world‘s population lives on less than $2 a day.‖141

Chronic indebtedness in Indonesia from 1997-2007 has seriously

constrained the government‘s ability to advance general prosperity. The

Indonesian reliance for external debt from a cartel of international

creditors, known as the Paris Club, had even started before the onset of

1997 financial crisis. In 1996, Indonesia‘s external debt amounted to

US$127.4 billion or 54.5 per cent of GDP, in 1997 it amounted to US$135.0

billion or 163.1 per cent of GDP, in 1998, it amounted to US$149.9 billion

or 129.0 per cent of GDP, in 1999 amounted to US$ 147.6 billion or 91.0

per cent of her GDP, and in 2000 amounted to US$ 149.1 billion or 86.9 per

cent of her GDP.142 The data presented here are a conservative figure and

therefore it is reasonable to assume that Indonesia is in a state of

bankruptcy in 1996-2000 because of its debt burden reached absolute

levels.

Besides its false recipe to force Bank Indonesia (BI) to close sixteen

banks on November 1997 that created the banking debacle, the IMF also

contributed to a huge Indonesia‘s debt. As we can see from the table

141

Hiatt, S. (2007). A Game As Old As Empire: The Secret World of Economic Hit Men

and the Web of Global Corruption. San Fransisco: Berrett-Koehler Publishers, Inc, p. 19. 142

IMF. (2000, June). Recovery from the Asian Crisis and the Role of the IMF. Retrieved

August 8, 2012, from International Monetary Fund:

http://www.imf.org/external/np/exr/ib/2000/062300.htm#box3; Febriaty, H. (2010).

Analisis Determinan Cadangan Devisi di Indonesia (Analysis of the Determinants of

Foreign Exchange Resreves in Indonesia). Medan: Universitas Sumatra Utara, pp. 1-7.

http://www.imf.org/external/np/exr/ib/2000/062300.htm#box3


76

below, it would be reasonable to assume that continued high

indebtedness may have contributed to destabilization in Indonesia from

1997 until it was able to repay enough debt by 2006. Huge debt and social

inequality factors created political turbulence and resulted in the fall of

the government in May 1998 and the disintegration of East Timor.

Indonesia Debts to the IMF 1997-2006

Year US$ (in billions) SDR (in billions)

1997 2.92 2.202

1998 5.64 4.254

1999 1.34 1.001

2000-2003 5 3.638

2002 4.5 3.638

2006 (outstanding) 3.2 2.2

Source: http://www.imf.org/external/np/sec/pr/2006/pr06215.htm,

William Cline in International Debts Reexamined argues that the

government that spends over 4 per cent of GDP to pay debts will be

unable to undertake its duty to maintain complete political stability.143

The condition in Indonesia is much worse than 4 per cent. Globalization

143

Cline, W. (1995). International Debt Reexamined. Washington DC: Institute for

International Economics, pp. 1-3, 155.

http://www.imf.org/external/np/sec/pr/2006/pr06215.htm


77

seems malign for Indonesia from 1997-2007. The government cannot

escape from a seeming addiction to interest-bearing debt. As a result, the

government is unable to undertake its duty to maintain political stability

because it spends over 100 per cent of GDP to pay its debts to the major

multinational banks, many corporations, and foreign aid missions from a

multitude of countries. The nation becomes bankrupt because of interest-

bearing debt. This indebtedness, coupled with the Asian financial crisis,

may better explain the cause-and-effect relationship between a weak

national government, globalization and global governance eroding


The second principle of poor governance is white-collar crime in the

form of corruption. Transparency International defines corruption as ―the

abuse of entrusted power for private gain. This can mean not only

financial gain but also non-financial advantages.‖144 I think corruption in

Indonesia can be seen from three perspectives. Systemic corruption,

corruption by necessity, and by needs. All these categories are mutually

connected in a globalized world in such a way that if the core system of

today‘s capitalism is driven by unfairness, consumerism, hedonism, and

individualism, the others are also affected.145 With this framework,

144

Compact, U. N. (2011). Global Compact Principle 10. Retrieved August 31, 2012,

from The UN Global Compact:

http://www.unglobalcompact.org/aboutthegc/thetenprinciples/principle10.html. 145

Katz, C. (2011, January-February). Interpretations of the economic crisis. Retrieved

August 31, 2012, from International Socialist Review:

http://www.unglobalcompact.org/aboutthegc/thetenprinciples/principle10.html


78

everything is not enough and there is likely to be a need for more

resources to be exploited. The present capitalist system lacks built-in

systems that respect the harmony between the human and the Supreme

Being, harmony between human beings, and harmony with nature. In this

regard, corruption is a systemic and chronic disorder that exists in today‘s

capitalist system. This can be seen from the inequitable distribution of the

world‘s income that I will present in the next variable.

From micro-analysis, Indonesia also is unable to escape from this

tendency. Corruption has become a chronic problem in Indonesia from

1997-2007. Based on Political and Economic Risk Consultancy (PERC) and

Transparency International survey, from 1997-2006 the level of corruption

in Indonesia has not significantly improved.146 On average, Indonesia

isusually at the top ranking in corruption practices. And because

corruption is a ‗cancer‘ sweeping across Indonesia, the public trust in

politicians is low.

http://www.isreview.org/issues/75/feat-katz.shtml; Perkins, J. (2004). Confessions of an

Economic Hit Man. California: Berret-Koehler Publishers, Inc, p. 206; Perkins, J. (2009).

Hoodwinked. New York: Broadway Books, pp.61-71.

146Quah, J. (2011). Curbing Corruptions in Asian Countries: An Impossible Dream?

Bingley: Emerald Group Publishing Limited, pp. 388; LAN. (2007).

StrategiPenangananKorupsi di Negara-Negara Asia Pasifik (Strategy of Curbing

Corruption in Asia-Pacific States), Lembaga Administrasi Negara, Pusat

KajianAdministrasiInternasional, 2007, p. 20.

http://www.isreview.org/issues/75/feat-katz.shtml


79

Indonesia’s Level of Corruption according CPI and PERC

Year CPI Rank and

Score*

PERC Rank and Score**

1997 46th (2.72) 12th (8.67)

1998 80th (2.0) 12th (8.95)

1999 96th (1.7) 12th (9.91)

2000 85th (1.7) 12th (9.88)

2001 88th (1.9) 11th (9.67)

2002 96th (1.9) 12th (9.92)

2003 122nd (2.9) 12th (9.33)

2004 133rd (2.0) 12th (9.25)

2005 137th (2.2) 13th (9.10)

2006 130th (2.4) 13th (8.16)

2007 143rd (2.3) 11th (8.03)

Source: Jon S.T. Quah (2011). Curbing Corruption in Asian Countries: An Impossible

Dream? (Emerald: Bingley) pp. 388. *The Corruption Perception Index by

Transparency International score ranges from 0 (most corrupt) to 10 (least corrupt).

**The Political and Economic Risk Consultancy, Ltd (PERC) score ranges from 0

(least corrupt) to 10 (most corrupt)

From the table above we can infer that corruption in Indonesia from

1997-2007 increased. From 1999-2002, corruption in Indonesia almost

reached the absolute level. This is the period when Indonesian banks

were insolvent because of their imprudent use of fractional reserve

banking without any regulation or enforcement to stop this devastating

practice.


80

At this time also, Indonesia came under the auspices of the IMF and

the World Bank to escape from the devastating financial crisis of 1997.147

Without integrity in the system and transparency when using its interest-

bearing loans, it would be reasonable to assume that the practice of

corruption likely happened by taking advantage of a weak national

government that cannot dodge from dependency and must get interest-

bearing debts from the creditors.

The third principle of poor governance is income inequality. Income

inequality is the condition where income distribution does not circulate

evenly. There are domestic and international factors that cause income

inequality. For the sake of this study, I argue that ‗the rules of the game‘

of capitalism which include a usurious economic system, money market

system (stocks and bonds), and fiat monetary system has made wealth no

longer circulate in the economy. The consequence is that the rich get

richer and the poor get poorer.

The result is catastrophic. The gap between the ‗haves‘ and ‗have-nots‘

is a world-wide phenomenon. According to the 2007 Human

Development Report, the poorest 40 per cent of the world‘s population

147

Quah, J. (2011). Curbing Corruptions in Asian Countries: An Impossible Dream?

Bingley: Emerald Group Publishing Limited, pp. 388; Bank, T. W. (2007, July 24);

Hutang Indonesia dan Bantuan Bank Dunia (Indonesian Debts and the World Bank

Assistance). Retrieved August 11, 2012, from The World Bank:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEX

T/INDONESIAINBAHASAEXTN/0,,contentMDK:21014341~pagePK:1497618~piPK:2

17854~theSitePK:447244,00.html.

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/INDONESIAINBAHASAEXTN/0,,contentMDK:21014341~pagePK:1497618~piPK:217854~theSitePK:447244,00.html




81

accounts for 5 per centof global income, the richest 20 per cent accounts

for three-quarters of world income.148 From this macro analysis, it is

reasonable to assume that rich people are getting greedy at the expense of

others.

The ‗rules of the game‘ in the name of financial globalization also

manifested itself in numerous economic and financial crises due to

usurious-based economic and financial globalization.149 What is its

relationship with income inequality? As I have mentioned in the previous

analysis, globalization regimes sustain interest-bearing debt and breed

corruption. Corruption affects income inequality.

According to the UN-HABITAT ―empirical research into causal

relationship between corruption and income inequality suggests that it

would take only a 10 per cent decrease in corruption to increase GDP

growth by 1.7 percent in Asian countries.‖150 Income inequality has a

strong impact in weakening the state by magnifying social inequality and

feeding corruption.

148

UNDP. (2007). Human Development Report 2007/2008.New York: Palgrave

Macmillan, p. 25; Perkins, J. (2004); Confessions of an Economic Hit Man. California:

Berret-Koehler Publishers, Inc, pp. xii, 206. 149

The savings and loan crisis in the 1990s, Asian and Russian monetary crisis in 1997,

Enron accounting fraud in 2001, Argentine, Zimbabwe, and Turkey currencies and debt

crises respectively in 2002, 2003, 2004, Bernard Madoff investment scandal in 2005, and

the subprime mortgage crisis in 2007. 150

Programme, U. N. (2008). State of the World's Cities 2010/2011: Bridging the Urban

Divide. New York: Earth Scan, p. 81.


82

On a micro-analysis, it creates social inequalities, instability, and the

degradation of national confidence. To be specific, when the economic

and financial crisis hit Indonesia, ordinary people became vulnerable

because they lost their jobs, and even if they retained a job, wages

decreased because of a massive rupiah devaluation. No matter how hard

Indonesian people worked, they were still poor because corruption

prompted by the system had shackled them.

The level of trust and national integration ebbed away. The national

government was helpless in providing basic necessities for the people.

Thisrocked the very foundation of national sovereignty. People became

desperate to find any job; most were informal or dirty, difficult, and

dangerous jobs. With less pay than they were used to, corruption became

short-cut to sustain their life, families, and dependents. The gap between

rich and poor became wider.

Year Gini Ratio in Indonesia

1996 0.356

1997 0.560

1998 0.370

1999 0.311

2002 0.343

2005 0.343

2006 0.357

2007 0.376


83

Source: Collected from various sources and Indonesian National Agency of Statistics

(BPS), Analysis of poverty conditions in Indonesia.151

From the table above, Indonesia‘s Gini index (a measure of the

inequality of income distribution, in which a lower index indicates better

equality) rose to 0.376 in 2007 from 0.356 in 1996. It reached peak value in

1997. From this fact, I can infer that inequality has been increasing in

Indonesia for a decade. The economic growth ‗cake‘ is not distributed

evenly.The concentration of wealth became more exclusive as the gap

between rich and the poor widened. Too much reliance on economic

globalization in the form of debts and foreign capital flows created

vulnerabilities for long-term state economy planning.

The conditions attached to debts was too controlling and did not give

national freedom to do things based on local conditions. This may have

dampened national sovereignty, created political turmoil, and social

151

Statistik, B. P. (2008). Analisis dan Penghitungan Tingkat Kemiskinan Tahun 2008

(Analysis of Poverty Rate in 2008). Jakarta: Badan Pusat Statistik, available at

http://daps.bps.go.id/File%20Pub/Analisis%20Kemiskinan%202008.pdf pp. 30-35;

ADB. (2012); From Poverty to Prosperity:A Country Poverty Analysis for Indonesia.

Retrieved August 7, 2012, from Asian Development Bank:

http://216.109.65.20/Documents/Reports/Poverty-Assessment-INO/default.asp; Maulia,

E. (2008, December 17). Income gap widens in Indonesia, most other countries: ILO.

Retrieved August 10, 2012, from The Jakarta Post:

http://www.thejakartapost.com/news/2008/12/17/income-gap-widens-indonesia-most-

other-countries-ilo.htm; Sinaga, A. (2012, June 5). Income, a perilously widening gap.

Retrieved 15 August, 2012, from The Jakarta Post:

http://www.thejakartapost.com/news/2012/06/05/income-a-perilously-widening-gap.html.

http://daps.bps.go.id/File%20Pub/Analisis%20Kemiskinan%202008.pdf

http://216.109.65.20/Documents/Reports/Poverty-Assessment-INO/default.asp

http://www.thejakartapost.com/news/2008/12/17/income-gap-widens-indonesia-most-other-countries-ilo.htm


http://www.thejakartapost.com/news/2012/06/05/income-a-perilously-widening-gap.html


84

problems. The positive economic growth in Indonesia was yet to trickle-

down for the welfare and prosperity of the people.152

b. Economic globalization pressure

Globalization pressure is the use of persuasion, influence, intervention

or even intimidation to make states lose their autonomous economic and

political decision making power. Economic and political globalization as a

pressure from the Western world to the non-Western world is explained

by the concept of hegemony. The new liberal cosmopolitan ideal is

emerging and being accepted as the dominant ideology. There is

substantial pressure from globalization agents such as the IMF, World

Bank, and MNCs to follow homogenous, hegemonic, and imperialistic

democratization processes coupled with liberal development strategies.153

With her strategic location and rich natural resources, Indonesia has

attracted states and transnational actors to impose three strands of

152

Wijayanto. (2011, April 28). Income, a perilously widening gap. Retrieved August 8,

2012, from Globe Asia: http://www.thejakartaglobe.com/columnists/the-illusion-of-

being-equal-prosperous-and-employed/437854. 153


Transcience Journal , Vol. 2, No 1 (2011), pp. 30-31; Febriaty, H. (2010).Analisis

Determinan Cadangan Devisi di Indonesia (Analysis of the Determinants of Foreign

Exchange Resreves in Indonesia). Medan: Universitas Sumatra Utara, pp. 1-7; Hobson, J.

(2000). The State and International Relations. Cambridge: Cambridge University Press,

pp. 130-136;Perkins, J. (2004). Confessions of an Economic Hit Man. California: Berret-

Koehler Publishers, Inc; pp. 8-10, 15-17, 120-129; Perkins, J. (2009). Hoodwinked. An

Economic Hit Man Reveals Why the World Financial Markets Imploded and What We

Need to Do to Remake Them. New York: Broadway Books, p. 141.

http://www.thejakartaglobe.com/columnists/the-illusion-of-being-equal-prosperous-and-employed/437854



85

liberalism. Commercial liberalism promotes the idea of free trade and

economic interdependence, republican liberalism endorses the spread of

democracy, and institutional liberalism promotes the development of

international institutions.

For Indonesia, globalization pressure from 1997-2007 can be divided

into three components. First, the component of economic policy resulted

from the imposition of Washington Consensus mantras, which are

privatization, deregulation, and liberalization to escape from the Asian

financial crisis 1997. Second, the spread of an American political model

via globalization agents required Indonesia to undertaken overhaul of

political organization based on liberal values. Third, the war on terror

included pressure to eradicate so-called ―Islamic terrorism‖ in Indonesia

and prevent the country from becoming Southeast Asia‘s terrorism

hotspot. In this analysis, I focus on the first aspect.

Indonesia‘s national sovereignty was at low ebb from 1997-2007. The

government was weak because of its ailing internal affairs and reliance on

globalization regimes. Indonesia was basically bankrupt because of a debt

trap. International interest-bearing loans bound Indonesia to its creditors.

Fundamental economic integration and interest-seeking rules nourish

rent-seeking behavior in today‘s capitalism.

Indonesia‘s decaying sovereignty can be clearly seen from the

conditional aid found in the Letter of Intent (LoI) and Memorandum of

Economic and Financial Policies (MEFP) of the government of Indonesia

from 1998-2006. This basically required the Indonesian government to


86

undertake privatization, deregulation, and liberalization of its strategic

state-owned enterprises (SOEs).154

The IMF has given a false recipe to Indonesia, which must follow the

LoI in order to basically liberalize, deregulate, and privatize its economy

and become a model of Washington Consensus policies. The LoI sets out

the conditions for Indonesia to get funds from the IMF.155 Jonathan

Stevenson describes this shocking pressure ―the IMF offered help in the

form of confidential agreement on 31 October 1997. The letter of intent

required that 16 banks be closed in November 1997, which prompted a

run even on relatively healthy banks.‖156 The pressure was getting high

when the IMF threatened to withhold further bailout funds if the

government did not following its instruction. Furthermore, on January 9,

1998, US President Bill Clinton called President Suharto to insist that IMF

program must be followed.157

154

IMF. (2012, July 18). Indonesia and the IMF. Retrieved August 23, 2012, from

International Monetary Fund:

http://www.imf.org/external/country/idn/index.htm?type=23. 155

IMF. (2002, November 20). Indonesia—Letter of Intent. Retrieved August 10, 2012,

from International Monetary Fund:

http://www.imf.org/external/np/loi/2002/idn/03/index.htm.. 156

Quoted in Stevenson, J. (2000).Preventing Conflict: The Role of the Bretton Woods

Institute. New York: Oxford University Press, p.18. 157

Kutan, A., Sudjana, B., & Moradoglu, G. (2012). IMF Programs, financial and real

sector performance, and the Asian Crisis. Retrieved August 31, 2012, from City

University of Hongkong:

http://www.cb.cityu.edu.hk/CONFERENCE/EMRM2012/doc/KUTAN%20Ali.pdf, pp.

25-49.

http://www.imf.org/external/country/idn/index.htm?type=23

http://www.imf.org/external/np/loi/2002/idn/03/index.htm


87

On February 4, 2000, the IMF approved a three-year term loan to

support the program of structural reforms in Indonesia. When Indonesia

asked for financial assistance, the IMF provided a variety of conditions.158

Sometimes these requirements actually increased the financial crisis on

borrowing countries, as well as what happened in Indonesia during the

1997 economic crisis. The policy of the Fund is used to force, among other

things, privatization, removal of subsidies and deregulation. After the

1997 crisis, on March 26, 1998, the US$40 billion rescue package organized

by the IMF failed in the goal of reviving Indonesia‘s economy. In fact, it

increased the country‘s debt burden dramatically, while simultaneously

exacerbating Indonesia‘s economic crisis.159

The hegemonic dominance of the economic and political globalization

contracts affected national sovereignty, capacity, and capability to create

independent political-economic decisionsat critical times. These sets of

regimes were retained by the IMF via post-program monitoring.160 With

158

Baswir, R. (2005, December 06). Tim Ekuin 'Boediono'? (Economic Team of

'Boediono')? Retrieved August 12, 2012, from Gadjah Mada University:

http://www.ekonomikerakyatan.ugm.ac.id/My%20Web/sembul34_1.htm; Tri. (2003, July

31). Pasca-IMF, Dikeluarkan Buku Putih (Post-IMF, White Book been Released).

Retrieved August 30, 2012, from Suara Merdeka:

http://www.suaramerdeka.com/harian/0307/31/nas6.htm. 159

Kamasa, F. (2011). What China's and India's Economic Development Can Bring to

ASEAN? Jurnal Diplomasi, Vol. 3, No. 1, March 2011, p. 112. 160

Regimes defined as implicit or explicit principles, norms, rules, and decision-making

procedures. IMF (2005, March). Indonesia: Post-Program Monitoring Discussions.

Retrieved August 28, 2012, from International Monetary Fund:

http://www.imf.org/external/pubs/ft/scr/2005/cr05108.pdf; IMF. (2001, December 13);

http://www.ekonomikerakyatan.ugm.ac.id/My%20Web/sembul34_1.htm

http://www.suaramerdeka.com/harian/0307/31/nas6.htm

http://www.imf.org/external/pubs/ft/scr/2005/cr05108.pdf


88

high interdependence, caused by the lack of political will creating a basis

for the large-scale economies, Indonesia could not resist globalization

pressures, could not secure enough freedom to do things, was, and still is,

trapped in a huge debt.

When Indonesia signed the conditions of the loans, its national

sovereignty basically eroded for five reasons. First, the Indonesian

government was required to make an autonomous Banking Law. From

here emerges Act No.23/1999 on Bank Indonesia that separates state

authority from the central bank of the Republic of Indonesia.161 The

puzzle is, if the state is sovereign, why does it have to stipulate a law that

is so important, being imposed by non-state organization (INGOs)?

Furthermore, BI cannot be separated from the effects of having to submit

tothe IMF Articles of Agreement, that is, to be regulated, and in some

instances (as per the following articles: article IV section 2, article IV

section 3.a, article V section 1, and article VIII section 5), this involves the

state losing control of its central bank to the IMF, and only the central

Indonesia—Letter of Intent,Memorandum of Economic and Financial Policies, and

Technical Memorandum of Understanding,. Retrieved August 14, 2012, from

International Monetary Fund: http://www.imf.org/external/np/loi/2001/idn/02/index.htm. 161

Indonesia, R. o. (1999). Act of the Republic of Indonesia No. 23 of 1999 Concerning

Bank Indonesia. Retrieved August 23, 2012, from Bank Indonesia:

http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-A7B2-

0FC008B49A61/1215/act2399.pdf.


http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-A7B2-0FC008B49A61/1215/act2399.pdf



89

bank, not government, is to have the relationship with the IMF.162 The

bank is the backbone of national economy and if the central bank cannot

escape being ruled by the non-state organization then logically the IMF is

controlling Indonesia and the economic sovereignty of Indonesian is

being eroded.

Second, under the LoI requirements for restructuring the banking

system, the government had to amend the Act of the Republic of

Indonesia concerning Banking by Act No. 10 of 1998 and create

Government Regulation No. 29 of 1999 concerning Purchase of Shares in

Commercial Banks, which allowed total foreign ownership to 99 per cent

of the commercial bank.163 This high threshold was dictated by the IMF in

the conditionsassociated with its loansin an effort to spur growth in the

immediate aftermath of the 1997 monetary crisis.

Third, under the LoI on privatization of the SOEs, the government

should increase the shares of SOEs released to the public. At least, this

should be done for companies engaged in domestic and international

162

IMF. (1944, July 22). Articles of Agreement of the International Monetary Fund.


http://www.imf.org/external/pubs/ft/aa/. 163

Heriani, F. N., & Arkyasa, M. (2012, July 23). BI Should Regulate Foreign Ownership

of National Banks. Retrieved August 20, 2012, from Hukum Online.com:

http://en.hukumonline.com/pages/lt500cfb9830e72/bi-should-regulate-foreign-ownership-

of-national-banks; Indonesia, R. o. (1998). Act of the Republic of Indonesia Number 7 of

1992 Concerning Banking as Amended by Act Number 10 of 1998. Retrieved August 18,

2012, from Bank Indonesia: http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-

A7B2-0FC008B49A61/13309/act_1098e.PDF.

http://www.imf.org/external/pubs/ft/aa/

http://en.hukumonline.com/pages/lt500cfb9830e72/bi-should-regulate-foreign-ownership-of-national-banks


http://www.bi.go.id/NR/rdonlyres/E59D56AB-5BA9-4828-A7B2-0FC008B49A61/13309/act_1098e.PDF



90

telecommunications sectors.164 Because of this commitment, in less than

five years, the Indonesian government lost the ownership of its

telecommunications company Indosat which is strategically important.

Because of this commitment, SOEs became purely business-oriented,

which is to seek profit and sacrifice the welfare of the people.

The economic and financial globalization that took place towards the

end of the twentieth century is characterized by the liberalization ofall

sectors imposed through structural adjustment programs (SAP) by global

financial institutions. Globalization comes with policy conditions.

According to the IMF, the prime goals of SAP are to improve a

country‘s balance of payments, and to promote sustainable long-term

growth. In reality, it is not transparent and can be seen as a major cause of

poverty in Indonesia.

IMF‘s SAP is intended to assist Indonesia tomeet its debt-bearing

loans provided by the IMF to Indonesia to address fiscal issues, monetary,

inflation, financial deregulation, trade liberalization, and privatization of

public-sector enterprises. The assistance has become counterproductive

164

Online, H. (2000, September 21). Privatisasi Indosat Diundur Sampai 2003 (Indosat

Privatization Postpones untill 2003). Retrieved August 20, 2012, from Hukum

Online.com: http://www.hukumonline.com/berita/baca/hol674/privatisasi-indosat-

diundur-sampai-2003; Ritonga, U. (2002, Juni 18). Kesepakatan Ekonomi sebagai

Pengganti LoI IMF (Economic Agreement as a Substitute of IMF's LoI). Retrieved

August 20, 2012, from Tempo Interaktif:

http://www.tempo.co.id/hg/ekbis/2002/06/18/brk,20020618-14,id.html.

http://www.hukumonline.com/berita/baca/hol674/privatisasi-indosat-diundur-sampai-2003


http://www.tempo.co.id/hg/ekbis/2002/06/18/brk,20020618-14,id.html


91

and was often criticized as the crisis became deeper, longer, and harder.165

We can see this course from table below.

Level of Unemployment, Level of GDP, Level of Trade, Inflation Rate,

and Interest Rate in Indonesia 1997-2007 (in percentage)

Year Level of

Unemployment

Level

of GDP

Level of

Economic

Growth

Inflation

Rate

Interest

Rate

1997 5.00 4.7 5.00 11.05 8.21

1998 5.46 -13.3 -15.0 77.63 -24.6

1999 6.36 0.3 0.79 2.01 11.83

2000 6.08 4.8 4.90 9.35 -1.65

2001 8.01 3.4 3.64 12.55 3.72

2002 9.06 3.7 4.50 10.03 12.32

2003 9.51 4.8 4.78 5.06 10.85

2004 9.86 5.0 5.03 6.40 6.4

2005 10.26 5.7 5.69 17.11 12.75

2006 10.27 5.5 5.50 6.60 9.75

2007 9.11 6.3 6.35 6.59 8.00

Sources: Data processed from various sources,

http://www.bps.go.id/aboutus.php?inflasi=1, Indonesian National Agency of Statistics

(BPS), 1997-2007, Statistical Yearbook of Indonesia (various years);

http://www.worldbank.org/en/country/indonesia,

http://eprints.undip.ac.id/26483/2/Jurnal_Skripsi.pdf

165

Naqvi, N. (2012, August 26). The IMF and Us. Retrieved September 4, 2012, from The

Express Tribune: http://tribune.com.pk/story/426495/the-imf-and-the-us/.

http://www.bps.go.id/aboutus.php?inflasi=1

http://www.worldbank.org/en/country/indonesia

http://eprints.undip.ac.id/26483/2/Jurnal_Skripsi.pdf

http://tribune.com.pk/story/426495/the-imf-and-the-us/


92

What assumptions can be made with the above data? Five salient

observations can be drawn from these economic downturn indicators.

First, by any standards, Indonesia had high unemployment rates from

1997-2007. From 1999-2007, the growth of the economy was relatively low,

at just about 3.9 percent. Second, the high rates of unemployment,

inflation rates, and interest rates contributed to the onset of a weak

national government in Indonesia handling macro and micro economic

indicators. Unemployment grew and the number of poor people

increased sharply. The difference between the highest and the lowest of

the unemployment levels are double and inflation rates twelve-fold.

Third, the double digits of unemployment rates, interest rates, and

inflation rates in Indonesia may have contributed to destabilization in

socio-economic conditions in Indonesia. Such high destabilization affects

societal economy activities. Fourth, in Indonesia from 1997-2007, the

unemployment, inflation rates, and interest rates were relatively stable at

high levels of 10 per cent, 17 per cent, and 20 per cent for a decade. Fifth,

these indicators coupled with other variables may better explain the onset

of weak national government and economic downturn in Indonesia over

a period of ten years. Economic downturn is even harder when we look at

the effects of the economic crisis as a result of the US sub-prime mortgage

crisis in 2008 and the series of bubbles from then until now.

The economic globalization pressure has created unequal

relationships in the international system and allowed foreign countries to

control critical resources and dominate the country‘s public policy


93

making. For example, the fiat monetary system will invariably lead to

inflation because paper money is printed continuously so that the value of

its purchasing power decreases. It also invariably benefits highly

industrialized countries because soft currencies (e.g. Indonesian Rupiah)

must be linked to hard currencies (e.g. US Dollar).

The monetary crisis in Indonesia that began in July 1997 led to the fall

of President Suharto on May 21, 1998. Inflation soared, and was recorded

at 11.05 % in 1997 and reached 77.63 per cent in 1998. This financial crisis

led to the collapse of the rupiah from Rp. 2.000 in 1997 to reach Rp. 20.000

per US dollar in 1998. This caused high prices in traded goods of more

than 4 times, that is, of more than 300 per cent, at the 1998 exchange rate,

in addition interest-bearing foreign denominated debt was swollen as the

value of the rupiah depreciated against the US dollar. The sovereignty of

national government is eclipsed when the national currency depreciates

in such way.

Based on this analysis, it is reasonable to say that the IMF‘s bailout of

Indonesia in 1997-1998 is basically a pressure for Indonesia to adhere to

structural conditionality, but this has adversely affected Indonesia‘s

macro and micro-economic conditions. Indonesia at that time desperately

needed loans because of its economic imprudence, fiat monetary system,

and monetary speculation. It is hard to resist the actors and agents of

globalization.


94

Global governance complex

According to Anthony McGrew, ―an evolving global governance

complex existsembracing states, international institutions, transnational

networks and agencies (both public and private)that functions, with

variable effect, to promote, regulate, or intervene in the common affairs of

humanity.‖166 The global governance complex is embracing all nation-

states today. It is inevitable, inescapable, and irresistible. As we have seen

from the analysis above, globalization is present at an economic, political,

and societal level. In fact globalization and global governance complicate

the ability of the state to maintain its sovereignty. The global governance

complex frames the regimes and values of international relations.

A web of organizations, public and private, domestic and

international shapes political regimes and policy, sets standards, and

enforces rules on a wide range of issues where sates lack effective

authority.167 I have outlined the case of the IMF intervention in Indonesia

from 1997-2007 that may fit into this categorization. The process of global

governance in Indonesia is less autonomous but driven by hegemonic

interests to gain advantage in the name of globalization and undermine


166

McGrew, A. (2010). Globalization and global politics. In J. Baylis, & S. Smith,

Globalization of World Politics (p. 25). Oxford: Oxfor University Press. 167

Perkins, J. (2009). Hoodwinked. New York: Broadway Books, pp. 19, 35, 41.


95

Indonesia, from 1997-2007 experienced this global governance in a

harsh way. As we have seen above, Indonesia was hit badly from the 1997

Asian financial crisis. The state capacity and autonomy was degraded and

almost lead to Balkanization, with the risk of disintegration and becoming

a failed state. Indonesia has been bound by numerous international

commitments by the globalization and governance regimes. The rule of

law became less well obeyed and the situation became very chaotic. A set

of regimes, values, and ideas was created for, and enforced by, a variety

of globalization actors. In this situation, the grass roots movement

consisting of religious groups and civil society urged for restoration of

Indonesia against the blatantly foreign intervention in shaping

Indonesia‘s economic and political policy.168

In the area of global governance complex, there are in fact three

distinct but interrelated processes at work. First the process of global

governance complex locates who is the authority in global politics.

Transformation of international politics becomes an arena no longer

dominated by the state because the state is seen as incompetent or

without capacity to solve global multidimensional problems. In another

way, the reduction of the state as the central decision making body on

policy is due toa lack of central authority and challenges to state

autonomy, capacity and legitimacy.

168

Gie, K. K. (2006). Kebijakan Ekonomi Politik dan Hilangnya Nalar (Political

Economy Policy and Lost of Reason). Jakarta: Kompas, p. 102.


96

Second, where did liberal regime legitimacy come from? An act of

imposition, intervention, or even intimidation is certainly against the

principles of non-interference and respecting sovereignty that Indonesia

or any civilized nations embraced. Learning from Indonesia‘s experience,

the idealism of liberalism can ruin the essence of the liberal idea, which is

freedom to choose, because it imposesthe views of another actor who has

different historical process, cultural identity, and world-view and requires

acceptance ofa singular global governance synthesis.

Lastly, the global governance complex entails considerable risk to

security if it is promoting or regulating its norms and value by

intervention. The way that the legitimacy of the state is not being

recognized gives rise to suspicion in many different ways. First, the global

governance complex may be tending to world government. Second, it is

likely to build a sense of uniformity and incorporation of all mankind into

a single idea and society. Third, as Patomäkiargues, it may transform

people and collective actors to accord with the preferred liberal world

order. Then it might give rise to a definition of higher and lower beings,

the ‗other‘ may be treated as an innocent to be converted. There also

emerges the perceived need for coercive powers to protect the liberal

agenda.169

169

Patomaki, H. (2003). Problems of Democratizing Global Governance: Time, Space,

and the Emancipatory Process. European Journal of International Relations, pp. 7-8.


97

Conclusion

In conclusion, globalization and global governance eroded Indonesia‘s

national sovereignty from 1997-2007. During this time Indonesia suffered

many serious blows. A national government suffered the most and

economic and political autonomy were much reduced by the crisis. The

Indonesian experience has shown that globalization and global

governance is less an autonomous process. It is more an expansion of

non-state actor and Western-liberal democratic state hegemony, coupled

with economic crises that attenuate national sovereignty.

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TEINVER V. ARGENTINA: THE MOST FAVORED

NATIONS PRINCIPLE IN A MULTIPLE BILATERAL

INVESTMENT TREATIES ERA

Nenda Inasa Fadhilah

Abstrak Investasi adalah salah satu saluran interaksi ekonomi diantara negara-negara disamping perdagangan di era globalisasi saat ini. Negara-negara bekerja-sama dengan membuat Perjanjian Investasi Bilateral (BIT) untuk menentukan tingkat perlakuan yang akan mereka berikan kepada investor dari negara mitra. Investor asing, baik dari negara-negara maju dan berkembang, mengharapkan negara tuan rumah memberikan perlakuan yang adil serta merata dan perlindungan penuh dan keamanan tanpa diskriminasi dalam rangka untuk mengamankan dan memastikan investasi mereka agar dapat memperoleh keuntungan yang diharapkan. Salah satu prinsip yang terkandung dalam BIT adalah Most Favored Nations (MFN) di mana negara berjanji bahwa mereka akan memperlakukan investor negara mitra itu perlakuan yang "tidak akan kurang" dari investor dari negara-negara lain (tidak ada diskriminasi antara investor asing dari negara yang berbeda). Prinsip MFN ini adalah salah satu sumber sengketa di ICSID terutama terkait dengan masalah yurisdiksi. Dalam tulisan ini, saya akan menganalisis apakah keputusan ICSID terbaru tentang yurisdiksi dalam kasus Teinver SA, Transportes de Cercanias SA & AUTOBUSES Urbanos del Sur SA v Argentina Republic (Kasus Teinver) akhirnya dapat mendefinisikan dan menyelesaikan masalah-masalah yang terkandung dalam prinsip MFN di hukum investasi internasional khususnya pada masalah yurisdiksi. Kata kunci: Investasi, ICSID, Most Favored Nations, Perjanjian Investasi Bilateral, Perjanjian Ekonomi


103

Abstract Investment is one of the channels of economic interaction between states beside trade in the current globalization era. States cooperate with each other by concluding Bilateral Investment Treaties (BIT) to define the treatment that they will give to their counterpart’s investors. Foreign investors, both from developed and developing states, expected the host state to give them fair and equitable treatment and full protection and security without discrimination in order to secure and ascertain their investment to acquire expected profit. One of the principles contained in the BITs is the Most Favored Nations (MFN) where a state promised that they will treat the counterpart’s investor the treatment that is “no less favorable” to investor from other states (no discrimination between foreign investors from different states). This MFN principle is one of the sources of dispute in ICSID especially related to the jurisdictional matter. In this paper, I will analyze whether the latest ICSID decision on jurisdiction in the case Teinver S.A., Transportes de Cercanías S.A. & Autobuses Urbanos del Sur S.A. v. Argentine Republic (Teinver Case) finally defined and settle the problems contained in the MFN principle in international investment law specifically on the jurisdictional matter. Keyword: Investment, ICSDI, Most Favored Nations, Bilateral Investment Treaty, Economic Agreement

I. The Most Favored Nations Principle

A. History of Most Favored Nations Principle

The MFN principle has been acknowledged in trade area for

centuries before the emergence of BITs. The earliest acknowledgment of

MFN principle is at eleventh century when French and Spanish cities

asked Arab princes of Western Africa to afford them treatments equal


104

with the Italian traders.170 The MFN principle become the preferred

treatment when they unable to gain monopoly.171

However, during and after the first world war occurred, the

effects of chilly relationship between warring states and the destruction of

economy caused the MFN clause to be not in favorable position172 despite

attempts made by the League of Nations in International Economic

Conference of 1927.173

After the World War Two, states realized that non-discriminatory

treatment is important in the advancement of international economic

relations. While the states failed to create International Trade

Organization, they successfully adopted General Agreement on Tariffs

and Trade (GATT). One of the main principles of GATT is MFN.174

Since 1967, International Law Commission (ILC) started the study

on MFN Clause. It has successfully adopted Draft Articles on Most-

Favoured-Nation Clauses in 1978.175 Member States of UN however,

170

Endre Ustor, First Report on the Most-Favoured-Nation Clause, ¶10, U.N. Doc.

A/CN.4/213 (April 18, 1969). 171

Id. ¶19. 172

Id. ¶30-34. 173

Id. ¶37. 174

World Trade Organization, Understanding the WTO: Basics: Principles of the Trading

System, http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm (last visited

March 16, 2013). 175

Rep. of the Int‟l Law Comm‟n, 33rd Sess., May 8-July 28, 1978, U.N. Doc. A/33/10;

GAOR 33d Sess., Supp. No. 10 (1978).

http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm


105

viewed that the work of ILC in MFN is a complex and therefore it give

additional time to the ILC to conduct further study.176

B. The Most Favored Nations Principle in International Trade

Since the inception of GATT and later its transformation into

World Trade Organization (WTO), MFN has become one of its most

important principles.177 The provisions that deal with the MFN principle

in WTO are Article I of GATT178 and Article II of the General Agreement

on Trade in Service (GATS).179 MFN in WTO means that states may not

discriminate between other states for the trade of like products180 or like

services.181

As the WTO member states are widespread throughout the world,

its mechanism and laws have been a standard in international trade. The

WTO Agreements acknowledge the exceptions to the MFN Principle

176

G.A. Res. 63/123, ¶6-8, U.N. Doc. A/RES/63/123 (Jan. 15, 2009). 177

See Appellate Body Report, European Communities – Conditions for the Granting of

Tariff Preferences to Developing Countries, ¶101, WT/DS246/AB/R (April 7, 2004);

Peter van den Bossche, The Law and Policy of the World Trade Organization 321 (2d Ed.

2008). 178

General Agreement on Tariffs and Trade, art. I, Oct. 30, 1947, 61 Stat. A-11, 55

U.N.T.S. 194 [hereinafter GATT]. 179

General Agreement on Trade in Services art. II, Apr. 15, 1994, Marrakesh Agreement

Establishing the World Trade Organization, Annex 1B, 1869 U.N.T.S. 183, 33 I.L.M.

1167 (1994) [hereinafter GATS]. 180

GATT, supra note 17 art. I. 181

GATS, supra note 18 art. II.


106

which are Free Trade Area182 and Custom Union.183 Therefore, state still

able to use its discretion to award certain states more trade benefit

compared to other WTO members.

C. The Most Favored Nations Principle in Investment

1. The Attempts to Create a Multilateral Investment Treaty

The opposite situation occurs in the field of international

investment. There are no widespread substantive rules of investment

protection that have been adopted. The efforts to create an investment

regime alongside GATT in 1947 under International Trade Organization

(ITO) have failed184 and compromises were made to put investment in

agenda at the 1995 WTO Ministerial Conference in Singapore.185 In the

1995 WTO Ministerial Conference, the Ministers are only agreeing to

establish a working group to examine the relationship between trade and

investment.186 Another effort to create a Multilateral Agreement on

182

GATT, supra note 17 art. XXIV:4. 183

GATT, supra note 17 art. XXIV:5. 184

Stephan W. Schill, The Multilateralization of International Investment Law 32-34

(2009). 185

See Zdenek Drabek, A Multilateral Agreement on Investment: Convincing the

Sceptics, WTO (June 1998), http://www.wto.org/english/res_e/reser_e/pera9805.doc

“[A]t the end, the topic was not included, and the countries have basically only agreed to

further explore on the analytical level the issues related to trade and investment.” 186

World Trade Organization, Ministerial Declaration ¶20, Dec. 13, 1996, 36 I.L.M. 218

(1997).


107

Investment (MAI) by the Organization for Economic Co-operation and

Development (OECD) in 1998 has failed.187

However the attempts to create widespread multilateral

investment related convention are not utterly in vain. There are two

widespread multilateral investments related treaties that have been

successfully created. They are the Convention on the Settlement of

Investment Disputes between States and Nationals of Other States (ICSID

Convention) in 1965 and the Multilateral Investment Guarantee Agency

(MIGA) in 1985 that was sponsored by the World Bank. The ICSID

Convention deals with the settlement of disputes in investment rather

than regulating worldwide investment like the WTO Agreements in

trade. Meanwhile MIGA deals with insurance framework for foreign

investment project. There are 147 states that ratified ICSID Convention188

while MIGA count 178 countries as member.189

The multilateral investment treaties that successfully adopted

often in the forms of regional investment treaties such as North American

Free Trade Agreement (NAFTA) or in the limited investment sector such

187

Organisation for Economic Co-operation and Development, International Investment

Agreements: Multilateral Agreement on Investment,

http://www.oecd.org/investment/internationalinvestmentagreements/multilateralagreemen

toninvestment.htm (last visited March 18, 2013). 188

International Centre for Settlement of Investment Dispute, Member States,

https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=Show

Home&pageName=MemberStates_Home (last visited March 18, 2013). 189

Multilateral Investment Guarantee Agency, MIGA Member Countries,

http://www.miga.org/whoweare/index.cfm?stid=1789 (last visited March 18, 2013).

http://www.oecd.org/investment/internationalinvestmentagreements/multilateralagreementoninvestment.htm


http://www.miga.org/whoweare/index.cfm?stid=1789


108

as Energy Charter Treaty.190 The United States also in the process of

negotiating the Trans Pacific Partnership with 10 pacific countries191 and

the Transatlantic Trade and Investment Partnership with the European

Union (EU)192 which contains the agreements on investment between the

parties.193 If the Transatlantic Trade and Investment Partnership

negotiations succeed, it will be the biggest free trade and investment

block.194

2. The Bilateral Investment Treaties and the MFN Clause

As there is no WTO version, i.e. overreaching investment world

organization, states have relied on multiple BITs and regional

arrangements. Thus, there have been no uniform MFN clauses drafted in

BITs. It depends on the states to draft the treatments that they want to

extend to previous BITs or give exclusively to another state or a group of

states.

190

Schill, supra note 23 at 42-43. 191

The United States in the Trans-Pacific Partnership, Office of the U.S. Trade

Representative, http://www.ustr.gov/about-us/press-office/fact-

sheets/2011/november/united-states-trans-pacific-partnership (last visited April 26, 2013). 192

Office of the Press Secretary, Statement from United States President Barack Obama,

European Council President Herman Van Rompuy and European Commission President

José Manuel Barroso, The White House (Feb. 13, 2013), http://www.whitehouse.gov/the-

press-office/2013/02/13/statement-united-states-president-barack-obama-european-

council-presiden. 193

Id.; The United States in the Trans-Pacific Partnership, supra note 30. 194

Countries and Regions: United States, European Commission,

http://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/ (last visited

April 26, 2013).

http://www.ustr.gov/about-us/press-office/fact-sheets/2011/november/united-states-trans-pacific-partnership


http://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/


109

The MFN clause in investment at least has 3 components. They

include, first, a beneficiary that encompasses the investors or the

investments entitled to the MFN treatment, second, a comparator which is

another investor and investment that set an MFN treatment standard, and

third, a standard of treatment that is expected by the investors or the

investments.195 These components could be expanded to include the scope

of application of the MFN clause196 and exceptions such as in taxation197

or special arrangements.198 The MFN clause applies in ‗like situations‘ or

‗in like circumstances‘.199

An MFN clause is the future commitment of states200 to treat the

foreign investors equally with the treatment contained in the newer BIT

and their latest regulation. However the extend of the application of MFN

principle in the dispute settlement has always been the source of

controversy.201

195

Kenneth J. Vandevelde, Bilateral Investment Treaties: History, Policy, and

Interpretation 341 (2010) at 339-343. 196

Vandevelde, supra note 195 at 339. 197


Vandevelde, supra note 195 at 339 (Special arrangements such as customs union, free

trade area or multilateral and regional agreements on investment). 199

Andreas R. Ziegler, Most-Favoured-Nation (MFN) Treatment, in Standards of

Investment Protection 59, 74 (August Reinisch ed., 2008). 200

Id. at 65. 201

August Reinisch, Introduction: Interrelationship of Standards, in Standards of

Investment Protection 1, 6 (August Reinisch ed., 2008); Yannick Radi, The Application

of the Most-Favoured-Nation Clause to the Dispute Settlement Provisions of Bilateral

Investment Treaties: Domesticating the “Trojan Horse”, 18 European Journal of


110

Nonetheless, there is considerable uniformity in the MFN Clause

although variations still exist among them. This might happen because

several European states202 have drafted Model BIT which helps them to

guide and standardized the treatment that will give to their counterparts

commonly with developing states.203 The Model BIT could be customized

by a state at certain provisions to accommodate demand from different

counterpart states.204 As the developing states started to create BITs

among themselves, the BITs concluded often based on the previous BITs

that they have concluded with the developed states.205

D. The MFN Principle Jurisprudence Before the Teinver Case

There are numerous cases decided in ICSID that relate to the MFN

principle. The first case that involved the MFN principle was Asian

Agricultural Products Ltd (AAPL) v. Srilanka. AAPL argued that the

ICSID Panel should apply the more favorable liability standards

contained in the 1981 Switzerland-Sri Lanka BIT as opposed to UK-Sri

Lanka BIT.206 The Panel reasoned the Switzerland-Sri Lanka BIT does not

International Law 757, 760 (2007),

http://ejil.oxfordjournals.org/content/18/4/757.abstract. 202





Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3,

Final Award, ¶9 (June 27, 1990).


111

adopted a ―strict liability‖ standard207 and thus in the absence of specific

provision in the BIT, the Panel must apply Switzerland-Sri Lanka BIT as a

lex specialis rather than international law as lex generalis.208

Perhaps, the first and most famous case in ICSID that related with

the application of the MFN principle in the ICSID jurisdiction is Maffezini

v. Spain. The Maffezini case involved the same Spain-Argentina BIT with

the current case although the respondent is Spain. Maffezini as the

claimant argued that the court should apply the Chile-Spain BIT that

contains more favorable provision,209 which the claimant does not have to

wait for 18 months in local court before they able to submit the case to

ICSID.210 The Panel agreed with the Claimant‘s argument and noting that

there is no requirement for the Claimant to exhaust the local remedies,

thus the case may proceed.211 The Maffezini reasoning has been followed

by cases such as Siemens,212 Gas Natural213 and Suez Vivendi214 but

rejected, for example, in Salini,215 Plama216 and Berschader.217

207

"Id. ¶45 (“Strict liability" means the Sri Lankan Government is “liable for any

destruction of the investment even if caused by persons whose acts arc not attributable to

the Government and under circumstances beyond the State's control.”) 208

Id. ¶54. 209

Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7,

Decision of the Tribunal on Objectons to Jurisdiction, ¶1 (Jan. 25, 2000). 210

Id. ¶39-40. 211

Id. ¶62. 212

Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Decision on

Jurisdiction, ¶121 (Aug. 3, 2004). 213

Gas Natural SDG, S.A. v. The Argentine Republic, ICSID Case No. ARB/03/10,

Decision of the Tribunal on Preliminary Questions on Jurisdiction, ¶30 (June 17, 2005).


112

II. Teinver v. Argentine Republic

A. Background of the Issue

Teinver S.A. (Teinver), Transportes de Cercanias S.A.

(Transportes) and Autobuses Urbanos del Sur S.A. (Urbanos)

(collectively, ―Claimants‖) are Spanish companies218 that owned

investments in Aerolíneas Argentinas S.A. (ARSA) and Austral-Cielos del

Sur S.A. (AUSA) (collectively, ―the Argentine Airlines‖).219

The source of dispute between the parties were the alleged

unlawful nationalization and other measures related to Argentine

Airlines taken by the Argentine Congress in December 2008220 and also

214

Suez, Sociedad General de Aguas de Barcelona, S.A.and Vivendi Universal, S.A. v.

Argentine Republic, ICSID Case No. ARB/03/19, Decision on Jurisdiction, ¶62-63, 68,

(Aug 3, 2006). 215

Salini Costruttori S.p.A. and Italstrade S.p.A. v. The Hashemite Kingdom of Jordan,

ICSID Case No. ARB/02/13, Decision on Jurisdiction, ¶115-119 , (Nov. 29, 2004) (The

ICSID Panel refused to accept the jurisdiction because the MFN clause does not explicitly

include the dispute resolution procedure nor implicitly by adding the words “all rights” or

“all matters” in the MFN clause.). 216

Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24,

Decision on Jurisdiction, ¶216-227, (Feb. 8, 2005) (In Plama, the ICSID Panel rejected

the Maffezini approach because the expansion of the MFN principle to dispute settlement

must explicitly stated by the state parties in the BIT). 217

Vladimir Berschader & Moise Berschader v. The Russian Federation, Arbitration V

(080/2004), ¶185-208., (April 21, 2006) (The terms “all matters” in the MFN clause

cannot expand to dispute settlement because it cannot be interpreted literally nor the

parties to the BIT have the intention to do so.). 218

Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v.

Argentine Republic (Teinver), ICSID Case No. ARB/09/1, Decision on Jurisdiction, ¶1

(Dec. 21, 2012). 219

Id. ¶2. 220

Id. ¶8.


113

creeping expropriation that allegedly started since October 2004.221

Disputes centered on Argentine regulation on airfare caps between 2002

and 2008 and disagreement on remedy for the expropriation of the

Claimant‘s shares in the airlines.222

The Claimants requested arbitration against Respondent on

December 11, 2008.223 The Claimants also invoked Argentina‘s consent to

dispute settlement through ICSID Treaty and MFN clause contained in

Article IV(2) 1991 Agreement between the Argentine Republic and the

Kingdom of Spain on the Reciprocal Promotion and Protection of

Investments (Spain-Argentina BIT) and the procedural clause found in

Article 1991 Bilateral Investment Treaty between the United States of

America and the Argentine Republic (U.S.-Argentina BIT).224

The Claimants appointed Henri C. Alvarez while the Respondent

appointed Dr. Kamal Hossain and both parties agreed to ICSID proposal

to appoint Judge Thomas Buergenthal as the President of the Tribunal.225

221

Id. ¶8. 222

Id. ¶8. 223

Id. ¶9. 224

Id. ¶10. 225

Id. ¶14, 16, 19-20.


114

B. The MFN Issue in Teinver Case

1. Spain-Argentina BIT as Jurisdictional Basis

Article IV(2) of the Spain-Argentina BIT called for treatment that

shall be no less favorable than accorded by each party to investors from a

third country in all matters that governed by the treaty.226 The MFN

treatment does not extend for treatment from future treaties made in

connection with free trade areas, customs unions, common markets, a

regional integration agreement and a previous treaty regarding

organization of mutual economic assistance,227 and tax deductions and

similar privileges.228

As for the investor-state dispute settlement provision, the Spain-

Argentina BIT required the investor to settle the dispute amicably with

the state party after the dispute raised.229 After 6 months, if the investor

and the state party concerned failed to reach settlement, the investor may

bring the claim to the tribunal in the territory where the investment was

made.230 The investor is only able to bring the claim to ICSID231 18 months

226

Agreement on the Reciprocal Promotion and Protection of Investments, Spain-

Argentina, art. IV(2), Oct. 3, 1991, 1699 U.N.T.S. 202. 227

Id. art. IV(3). 228

Id. art. IV(4). 229

Id. art. X(1). 230

Id. art. X(2). 231

Id. art. X(4).


115

after the investor initiated the judicial proceeding in the national

tribunals232 or if both parties agreed to.233

2.The Invocation of U.S.-Argentina BIT

The U.S.-Argentina BIT has the ‗fork in the road‘ dispute

settlement clause where the investors covered could choose to submit the

dispute to the national courts, administrative tribunals,234 any applicable,

previously agreed dispute-settlement procedures235 or six months after

the dispute arisen has passed and the parties have been through

consultation and negotiation236 for settlement by binding arbitration such

as ICSID237 or any other arbitration institution as agreed.238

The Claimants in their Request for Arbitration and Memorial on

the Merits invoked Argentina‘s consent to proceeding in ICSID through

the MFN clause contained in the Spain-Argentina BIT and took the

example of the dispute settlement mechanism contained in the 1991

Bilateral Investment Treaty between the United States of America and the

Argentine Republic (U.S.-Argentina BIT).239

232

Id. art. X(3)(a). 233

Id. art. X(3)(b). 234

Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.-

Argentina, art. VII(2)(a),Nov. 14, 1991, S. Treaty Doc. No. 103-2 (1993). 235

Id. art. VII(2)(b). 236

Id. art. VII(3)(a)(i). 237

Id. art. VII(3)(a). 238

Id. art. VII(3)(a)(iv). 239

Teinver, supra note 56, ¶138.


116

3.The Invocation of Australia-Argentina BIT

Argentina in the Memorial of Jurisdiction argued the six month of

negotiation is ―one of the condition‖ that must be satisfied to invoke

Respondent‘s consent.240 Then, the Claimants in their Request for

Arbitration and Counter-Memorial argued that the Tribunal had

jurisdiction over the dispute because the Claimants also have satisfied the

conditions set in the Australia-Argentina BIT that applies through the

Spain-Argentina BIT‘s MFN clause.241 The Australia-Argentina BIT was

adopted on August 23, 1997. The BIT regulated that an investment

dispute may be brought to ICSID242 if the dispute cannot be settled

amicably.243

Argentina objects to the Claimants‘ assertion to rely on the

Australia-Argentina BIT because it is not timely and must be dismissed.244

The Claimants claimed the invocation of Australia-Argentina BIT is not

untimely because the Claimants have relied on MFN clause ―even before

they submitted their Request for Arbitration‖245 and to counter

240

Teinver, supra note 56, ¶78. 241


Agreement on the Promotion and Protection of Investments art. 13(3)(a), Australia-

Argentina, Aug. 23 1995, 1985 U.N.T.S. 85. 243

Id. art. (13)(1). 244




117

Argentina‘s objection ―with respect to the six-month waiting period in its

Memorial on Jurisdiction.246

The Claimants should have consistently relied on the same

comparator BIT from the start. Although the Claimants argue that they

have relied on MFN clause from the start, they should have made clear

which another state‘s BIT that they will use as comparator BIT. The switch

of comparator BIT is confusing and made difficult for Argentina as the

Respondent state to make the argument accordingly to fit the comparator

BIT which dispute settlement clause has been used by the Claimants.

C. Panel Decision and Reasoning

The Claimants in their written and oral submissions argue that (1)

the Panel has jurisdiction over the case due to the MFN clause in Spain-

Argentina BIT that makes it possible for the Claimants to rely on more

favorable treatment in the Australia-Argentina BIT247 and even if the

jurisdiction is based U.S.-Argentina BIT, there will be no contradiction

since the Claimants have not submitted the case to Argentine Courts.248

(2) The Claimants already relied on MFN Clause before the Request for

Arbitration submitted and the invocation of Australia-Argentina BIT in

the Counter-Memorial on Jurisdiction is in response of to Argentina‘s

246


TTeinver, supra note 56, ¶138. 248



118

objection to 6-month waiting period in Memorial on Jurisdiction.249 In the

alternative, the Claimants also argued that the Claimants have fulfilled

the requirements set forth in Article X of Spain-Argentina BIT or excused

for reasons of futility.250

The Respondent argued that the MFN clause is not applied

because: (1) the jurisdictional requirements as contained in Article X of

the Spain-Argentina Treaty is not to be set aside or disregarded251 and

must be accepted by investor to invoke arbitration clause.252 (2) Both

Argentina and Spain never accepted ―the application of the Treaty‘s MFN

clause‖ to invoke their consent to ICSID253 and thus it should be deemed

to be authentic interpretation based on Article 31(3) of the Vienna

Convention on the Laws of Treaty (VCLT).254 (2) The invocation of the

Australia-Argentina MFN in the Claimant‘s Counter Memorial is against

the principle of good faith and barred by estoppels.255

249


Teinver, supra note 56, ¶73(ii) (The Claimant argue that it will be impossible or

difficult for them to settle the claim within 6 months and to start the judicial proceeding

for 18 months in accordance with Article X of the Spain-Argentina BIT before a dispute

may be submitted to ICSID.) 251







119

The Panel decides that it had jurisdiction over the case based on

the MFN clause of the Spain-Argentina BIT.256 The panel reasoned that (1)

MFN clause of Spain-Argentina BIT contained the words ―all matters‖

which unambiguously inclusive and Claimants have satisfied the

requirements contained in Article 13 of Australia-Argentina BIT.257

Further, the U.S.-Argentina BIT and Australia-Argentina BIT have more

advantages compared to Spain-Argentina BIT.258 Besides, the Claimants

have not selected the ‗fork on the road‘ under U.S. Argentina BIT where

they will be unable to bring the case to ICSID if it has been brought to

local court.259 (2) There is no harm for the Respondent caused by the

Claimants‘ change of reliance to Australia-Argentina BIT from U.S.

Argentina BIT.260

III. The Teinver Decision: Is the Panel Finally Defined and Solve

the Confusion on the Application of MFN Clause in the Investor-

State Dispute Resolution?

In Teinver, the Panel streamlined the application of MFN clause to

(1) whether or not the MFN clause in Spanish-Argentina BIT applies to

investment dispute resolution and (2) whether or not it is fair for the

256







120

Claimants to add another comparator BIT as basis for the Panel‘s

jurisdiction in the middle of the proceeding?

A. The Application of the MFN Clause in Dispute Resolution

The problems in the invocation of MFN clause often stemmed

from the disagreement on the interpretation of the MFN clause,

specifically on whether it should be interpreted broadly or strictly.

According to August Reinisch, the most contentious issue in the

interpretation of MFN clauses lies not on the substantive standard of

investment treatment but rather on the extent of the MFN clause in

dispute settlement, particularly in jurisdictional matters,261 as in the

current case.

The Panel in their reasoning mentioned the ordinary meaning

interpretation of Article IV262 and noted that the Spain-Argentine BIT

contains an MFN clause that applied in all matters regulated by the BIT263

thus supposed to include the dispute settlement clause. However, the BIT

does provide exceptions for the MFN clause. They are the treatment

granted to investors of a third state that participate in free trade area,

customs union, common market, regional integration or organization of

261

Reinisch, supra note 40, at 6. 262

Teinver, supra note 56, at 33. 263

Teinver, supra note 56, ¶160; Agreement on the Reciprocal Promotion and Protection

of Investments, supra note 64, art. IV(2).


121

mutual economic assistance concluded by agreement before the BIT264 and

taxation.265 Again, here, Spain and Argentina as the state parties did not

explicitly exclude the dispute settlement from the exception of the MFN

clause treatment.

The Panel also stated that investment arbitration jurisprudence

especially in the matters of ordinary meaning of the MFN clause has not

been consistent.266 Although, the Panel noted that in cases related to MFN

clause within Spain-Argentina BIT such as Maffezini, Gas Natural, Suez

InterAguas, Suez Vivendi and Impregilo, the Panels in respective cases

decided that the term ―all matters‖ applies to Article X that concerned on

Dispute Resolution.267

In order to analyze the problem further, the Panel also relied on

UNCTAD‘s MFN Treatment publication268 that sorts the application of

MFN in jurisdictions into two categories. The first category is the

admissibility requirements where the Claimants ―have invoked the MFN

treatment clause to override a procedural requirement that constitutes a

264

Agreement on the Reciprocal Promotion and Protection of Investments, supra note 64,

art. IV(3). 265


art. IV(4). 266

Teinver, supra note 56, ¶165-166. 267


Teinver, supra note 56, ¶168-172.


122

condition for the submission of a claim to international arbitration‖269 as

occurred in the current case. In the previous cases that involved

admissibility such as Maffezini, Siemens, Gas Natural, National Grid,

Suez InterAguas, AWG Group, Impregilo, Hothcief and Abaclat showed

that generally the MFN treatment clause could override a procedural

requirement.270 Exception where the Panels refused to override a

procedural requirement only occurred in Wintershall, ICS and Daimler.271

The second category is where a Claimant attempts to extend the

arbitral tribunal‘s scope of jurisdiction beyond the BIT.272 It worth noting

that the Panels in previous cases such as Salini, Plama, Telenor,

Berschader and Tza Yap Shum has been generally refused to extend the

arbitral tribunal‘s scope of jurisdiction beyond the BIT, except in

RosInvestCo case.273

The Panel tried to clarify the different reasoning that caused

different outcomes in the cases that involved the application of MFN to

dispute resolution. The Panel noted that each case has different facts that

influenced the outcome of the case whereas the Panel that asked

269

U.N. Conference on Trade and Development, Most Favoured-Nation Treatment:

UNCTAD Series on Issues in International Agreements II, at 66,

UNCTAD/DIAE/IA/2010/1, U.N. Sales No. 10.II.D.19; Teinver, supra note 56, ¶169. 270



U.N. Conference on Trade and Development, supra note 107, at 67; Teinver, supra

note 56, ¶169. 273



123

admissibility requirements does not consider the extent of the scope of

jurisdiction and vice versa.274

The panel turns to Maffezini whereas it listed the dispute

resolution related clause that may not be overridden by an MFN clause

due to public policy.275 The Panel in Teinver also notes that this approach

has been generally preferred although it has been criticized in Salini and

Wintershall as not adequate to prevent forum shopping and questioned in

Plama as there is no basis for these requirements.276 As the current case

involves admissibility requirements, the Panel agreed that the case may

proceed as it does not cross the boundary of the jurisdiction.277

Notably, Wintershall deemed that the requirement to pursue local

remedies for 18 months in an Argentinean Court is a condition to the host

State‘s consent for arbitration and an admissibility obstacle.278 However,

this approach is in the minority and could be deemed to depart from the

rationale of the differentiation between the admissibility where time is the

only wall for the Claimants to submit the case to ICSID and expansion of

274


Maffezini, supra note 47, ¶63 (They are exhaustion of local remedies, „the fork in the

road‟ clause, changing the arbitration forum, the agreement on a particular forum which is

a highly institutionalized and very precise procedural mechanism such as NAFTA.) 276

Teinver, supra note 56, ¶180; Plama supra note 54, ¶221. 277


Wintershall Aktiengesellschaft v. Argentine Republic, ICSID Case No ARB/04/14,

Award, ¶160(3) (Dec. 8 2008).


124

jurisdiction.279 Besides, the MFN clause in Argentina-Germany BIT which

became the basis in Wintershall deemed to be more constrained280 than

the Spain-Argentina BIT.

It is worth noting that if the Claimants used the procedural aspect

in the Spain-Argentina BIT, the case could be end up in the ICSID anyway

albeit with more procedural hurdles without the need to exhaust local

remedies. Therefore, the Australia-Argentina BIT could be deemed to be

more favorable than the Spain-Argentina BIT as it does not requires the

total twenty-four months time that divided with the six months for the

investor to tried to settle the claim amicably281 and eighteen months time

for investor to brought the claim in local court.282

The Panel also noted that the Claimants argued on limited

application of procedural requirements specifically whether the

Claimants may bypass the negotiation and local court part of the dispute

resolution.283 If the Claimants argued in more broad application such as

replacing the arbitral forum or rules or to broaden the issue that may be

arbitrated,284 there will be much more complication that occurs. The

279

Andrea Marco Steingruber, Consent in International Arbitration 314 (2012). 280



art. X(1)-X(2). 282


art. X(2)-X(3). 283




125

limited application of procedural requirements is a gateway issue in the

admissibility of the Claimants‘ claim. The negotiation and local court

requirements are the gate to a room that must be opened by the Claimants

to bring the claim.

This is not the case where the Claimants requested to change the

arbitral forum or rules that could be compared to request to open a door

to another room that only open to investors from third state. If those

clauses are overridden, there could be forum shopping where the

investors choose the forum that assumed to be favorable despite it is not

originally available in their BIT.

B. The Change in the Comparator BIT

The second problem is on whether or not it is right for the

Claimants to change the comparator BIT from U.S.-Argentina to

Australia-Argentina during the proceeding and its relation with the ‗fork

in the road clause‘ contained in U.S.-Argentina BIT. The application of the

‗fork in the road clause' means that an investor that benefitted under the

U.S.-Argentina BIT must choose either going to the local court or ICSID.

The Claimants argued that the invocation of the Australia-

Argentina BIT in the Counter-Memorial on Jurisdiction did not matter

since they already relied on MFN clause and Respondent only raised

objection with respect to the six month waiting period in the Memorial on


126

Jurisdiction.285 Contrary, the Respondent argued that the invocation of the

Australia-Argentina MFN through MFN Clause in the Counter-Memorial

of Jurisdiction is ―against the principle of good faith and should be barred

by estoppel.‖286

The argument of Respondent is understandable since if the

Claimants changed their basis for argument specifically BIT that they

used as basis for jurisdiction of the Court, it will be difficult for the

Respondent to prepare the appropriate defense. It will also difficult for

the Panel to decide which comparable BIT should become the basis of

jurisdiction.

The Panel however, declared that the addition of Australia-

Argentina BIT did not preclude the jurisdiction of the Panel over the

case.287 The Panel noted that both the U.S.-Argentina BIT and Australia-

Argentina BIT have the same advantage, which is the ―possibility to

access arbitration with fewer procedural preconditions‖288 therefore there

is no actual or perceived harm caused.289 Besides that, the Claimants had

not bring the claim to the local court which constituted a ‗fork in the road‘

for the application of the U.S.-Argentina BIT290 and it has followed the

285








127

negotiation requirement contained in the provision of dispute resolution

in Australia-Argentina BIT.291

The later requirement, i.e. to follow the whole procedural

requirements contained in the BIT that invoked by MFN clause is

important to prevent the investors to cherry picking the dispute

resolution clause.

Conclusion & Recommendation

The Panel in the Teinver case has strengthened the idea that MFN

clause could extend to the admissibility issue but not to expand the scope

of the jurisdiction or to change the forum of arbitration. This approach,

firstly decided in Maffezini has been generally accepted in numerous

ICSID decisions. Although there are some cases that dissent to this

approach, notably in Winterhall but it can be considered to be a minority

approach.

The Panel also clarified that in order to invoke the benefit of MFN

Clause in dispute resolution, the Claimants must prove that comparator

BIT has more favorable dispute resolution clause compared to the current

BIT that applied to the investment. Such benefit only applies to the

admissibility requirement and the Claimants must follow the whole

dispute resolution clause in the comparator BIT. Although the ICSID

291



128

cases will not bind future application of MFN clause but the reference to

the current case specifically in the application of MFN principle in the

admissibility issue is recommended.

In order to avoid the jurisdictional problem within the dispute

resolution system, it will be highly recommended for the drafter of BITs

to specifically and explicitly mention whether or not the MFN clause

applied to dispute resolution between host state and the investors.

However, the Panel should have come to different conclusion in

regard to the switch of comparator BIT in the middle of proceeding like in

the Teinver case. Although the Panel accept the jurisdiction because the

Claimants have fulfilled the jurisdictional requirements both in U.S.-

Argentina BIT and Australia-Argentina BIT, but, if such thing ensue again

in the future, it will be difficult for the respondent states to prepare the

proper defense accordingly.

BIBLIOGRAPHY

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Appellate Body Report, European Communities – Conditions for the Granting of Tariff

Preferences to Developing Countries, WT/DS246/AB/R (April 7, 2004);

Drabek, Zdenek, A Multilateral Agreement on Investment: Convincing the Sceptics,

WTO (June 1998), http://www.wto.org/english/res_e/reser_e/pera9805.doc

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ShowHome&pageName=MemberStates_Home (last visited March 18, 2013).

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Office of the Press Secretary, Statement from United States President Barack Obama,

European Council President

Herman Van Rompuy and European Commission President José Manuel Barroso,

The White House (Feb. 13, 2013), http://www.whitehouse.gov/the-press-

office/2013/02/13/statement-united-states-president-barack-obama-european-

council-presiden.

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Partnership,

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trans-pacific-partnership (last visited April 26, 2013

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Agreements:

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ementoninvestment.htm (last visited March 18, 2013).

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Settlement Provisions of Bilateral Investment Treaties: Domesticating the “Trojan

Horse”, 18 European Journal of International Law 757 (2007),

http://ejil.oxfordjournals.org/content/18/4/757.abstract.

Reinisch, August (ed), Standards of Investment Protection, (2008);

Rep. of the Int‟l Law Comm‟n, 33rd Sess., May 8-July 28, 1978, U.N. Doc. A/33/10;

GAOR 33d Sess., Supp. No. 10 (1978).

Schill, Stephan W., The Multilateralization of International Investment Law (2009).

Steingruber, Andrea Marco, Consent in International Arbitration (2012).

U.N. Conference on Trade and Development, Most Favoured-Nation Treatment:

UNCTAD Series on Issues in International Agreements II, at 66,

UNCTAD/DIAE/IA/2010/1, U.N. Sales No. 10.II.D.19

Ustor, Endre, First Report on the Most-Favoured-Nation Clause, U.N. Doc. A/CN.4/213

(April 18, 1969).

Van den Bossche, Peter, The Law and Policy of the World Trade Organization (2d Ed.

2008).

Vandevelde, Kenneth J., Bilateral Investment Treaties: History, Policy, and Interpretation

(2010),

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System,

http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm (last visited March 16,

2013).

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Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3,

Final Award,

(June 27, 1990).





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Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7,

Decision of the Tribunal

on Objectons to Jurisdiction, (Jan. 25, 2000).

Gas Natural SDG, S.A. v. The Argentine Republic, ICSID Case No. ARB/03/10,

Decision of the Tribunal

on Preliminary Questions on Jurisdiction, ¶30 (June 17, 2005).

Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24,

Decision on

Jurisdiction, ¶216-227, (Feb. 8, 2005).

Salini Costruttori S.p.A. and Italstrade S.p.A. v. The Hashemite Kingdom of Jordan,

ICSID Case

No. ARB/02/13, Decision on Jurisdiction, ¶115-119 , (Nov. 29, 2004).

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Jurisdiction, ¶121

(Aug. 3, 2004).

Suez, Sociedad General de Aguas de Barcelona, S.A.and Vivendi Universal, S.A. v.

Argentine Republic, ICSID

Case No. ARB/03/19, Decision on Jurisdiction, ¶62-63, 68, (Aug 3, 2006).

Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v.

Argentine Republic (Teinver),

ICSID Case No. ARB/09/1, Decision on Jurisdiction, ¶1 (Dec. 21, 2012).

Vladimir Berschader & Moise Berschader v. The Russian Federation, Arbitration V

(080/2004), ¶185-208., (April

21, 2006)

Wintershall Aktiengesellschaft v. Argentine Republic, ICSID Case No ARB/04/14,

Award, ¶160(3) (Dec. 8 2008).

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Agreement on the Promotion and Protection of Investments, Australia-Argentina, Aug. 23

1995, 1985 U.N.T.S. 85.

Agreement on the Reciprocal Promotion and Protection of Investments, Spain-Argentina,

Oct. 3, 1991, 1699 U.N.T.S. 202.

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General Agreement on Trade in Services Apr. 15, 1994, Marrakesh Agreement

Establishing the World

Trade Organization, 1869 U.N.T.S. 183, 33 I.L.M.

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Argentina, Nov. 14,

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(1997).


131

RESENSI BUKU

Judul : Refleksi dan Kompleksitas Hukum Humaniter

Penulis buku : Prof. KGPH. Haryomataram, SH., Brigjen (Purn)

Penerbit : Pusat Studi Hukum Humaniter dan HAM

(terAs) Fakultas Hukum Universitas Trisakti

Bahasa : Indonesia

Jumlah halaman : x + 478

Tahun penerbitan : 2012

Pembuat resensi : Ratih Wulandari, S.IP.

Hukum Humaniter secara lengkap

diterjemahkan dari International

Humanitarian Law Applicable in Armed

Conflict. Namun, pada masa lalu Hukum

Humaniter juga dikenal sebagai Hukum

Konflik Bersenjata atau Hukum Perang.

Hukum Humaniter mengatur

pelaksanaan konflik termasuk alat, cara

dan metode yang digunakan dalam

konflik senjata (sering dipersamakan

dengan perang), serta perlindungan

korban dari kejadian konflik bersenjata di tingkat nasional maupun

internasional.


132

Pada prinsipnya, Hukum Humaniter berlaku setelah perang atau

konflik senjata terjadi, tidak berkaitan dengan melarang perang dan tidak

menentukan pihak yang benar atau salah dalam perang. ―Prinsip

pembeda‖ (distinction principle) dalam Hukum Humaniter adalah antara

golongan combatant, yaitu pihak yang aktif terlibat dalam permusuhan,

dan penduduk sipil (civil population) yang tidak aktif turut serta dalam

konflik. Sumber Hukum ini berasal dari berbagai konvensi dan protokol,

terutama Hukum Den Haag (The Hague Laws), yang mengatur tentang

alat dan cara berperang, dan Hukum Jenewa (The Geneva Laws), yang

mengatur tentang perlindungan terhadap mereka yang menjadi korban

perang.

Pada dasarnya bentuk konflik senjata ada yang bersifat internasional,

di mana konflik terjadi antara dua negara atau lebih, dan konflik senjata

bersifat non-internasional, di mana konflik terjadi di salah satu negara

antara aktor non-pemerintah dengan pemerintah. Dalam konflik senjata

bersifat internasional, seluruh perangkat Hukum Humaniter berlaku,

namun dalam konflik yang bersifat non-internasional yang berlaku hanya

Konvensi Jenewa 1949, dan/atau Protokol Tambahan II 1977. Pasal 3

Konvensi Jenewa 1949 menetapkan bahwa orang yang tidak terlibat

secara aktif dalam konflik senjata (termasuk anggota Angkatan Perang

yang meletakkan senjata mereka atau karena terluka, sakit, ditahan)

harus diperlakukan dengan manusiawi tanpa diskriminasi ras, agama

atau kepercayaan, gender, keturunan atau harta, atau kriteria lainnya.


133

Dalam konflik yang bersifat non-internasional, orang yang tidak

terlibat aktif dalam konflik mempunyai hak dasar manusia yang tidak

dapat diambil dalam keadaan apa pun dan harus dilindungi, yaitu (1)

terhadap tindakan segala kekerasan atas jiwa dan raga, (2) dari tindakan

yang terjadi terkait dengan konflik senjata, seperti penangkapan,

penahanan dan pengasingan, harus diinformasikan dalam bahasa yang

dimengerti dan memperoleh perlindungan selama masa penahanan, (3)

dari penjatuhan hukuman tanpa didahului keputusan pengadilan dengan

standar yang dapat diakui oleh bangsa beradab lainnya, (4) tempat

penahanan perempuan harus dipisah kecuali keluarganya pun ditahan,

dan (5) Orang yang terluka atau sakit harus dikumpulkan dan dirawat di

mana terdapat sebuah badan humaniter netral, seperti Komite

Internasional Palang Merah, dan dalam pengaturan perawatan tersebut

membutuhkan persetujuan khusus dengan pihak-pihak konflik.

Pelaksanaan ketentuan tersebut tidak mengubah kedudukan hukum

pihak-pihak dalam konflik.

Buku ini merupakan kumpulan pemikiran Prof. KGPH.

Haryomataram, seorang tokoh ternama Indonesia di bidang Hukum

Humaniter, yang telah disampaikan dalam berbagai pertemuan ilmiah

seperti seminar, lokakarya, pemaparan maupun konferensi hukum

humaniter baik di tingkat nasional maupun internasional, termasuk

dalam pidato pengukuhan Guru Besar Ilmu Hukum di Universitas

Trisakti. Puluhan buku penulis mengenai Hukum Humaniter telah

diterbitkan.


134

Buku terdiri dari lima bab, di mana bab I adalah tipe-tipe konflik

bersenjata, bab II adalah mengenai konflik internal dan permasalahannya,

bab III berjudul konflik bersenjata di era abad ke-20, bab IV tentang

aspek-aspek tanggung jawab negara dalam hukum humaniter, dan bab V

bertemakan masalah-masalah lain.

Buku Hukum Humaniter menjelaskan subyek yang menarik namun

kompleks, dengan cara yang dapat mudah dipahami, untuk orang awam

sekalipun yang bukan lulusan Sarjana Hukum, mengenai teori-teori

termasuk uraian, penjelasan dan analisa perkembangan hukum

humaniter, serta permasalahan praktis yang dihadapi oleh negara-negara.

Situasi dan kondisi yang relevan dan faktual untuk Indonesia telah dilihat

dari aspek Hukum Humaniter termasuk mengenai keadaan darurat,

terorisme, situasi kekerasan dan ketegangan dalam negeri, perang

pembebasan negara (self-determination), dan negara netral dalam sengketa

bersenjata di laut.


135

ISTILAH HUKUM

Kemal Haripurwanto, S.H., LL.M.

Jus dispositivum

Jus Dispositivum means the law adopted by consent. It is the category of

international law that consists of norms derived from the consent of states. It is

founded on the self-interest of the participating states. Jus dispositivum binds

only those states consenting to be governed by it.

Norma yang mengatur. Ia hanya bersifat mengatur, oleh karenanya tidak

memaksa dapat disimpangi. Pengertian jus cogen menunjuk pada kaidah

atau norma tertentu

Civil law

Civil law (or civilian law) is a legal system originating in Western Europe,

intellectualized within the framework of late Roman law, and whose most

prevalent feature is that its core principles are codified into a referable system

which serves as the primary source of law. This can be contrasted with common

law systems whose intellectual framework comes from judge-made decisional law

which gives precedential authority to prior court decisions on the principle that it

is unfair to treat similar facts differently on different occasions (doctrine of

judicial precedent)

Civil law (atau civilian law) adalah sebuah sistem hukum yang berasal dari

Eropa Barat, yang dibentuk dalam kerangka berpikir hukum Romawi,

dan yang ciri utamanya ialah bahwa prinsip pokoknya dikodifikasi

http://en.wikipedia.org/wiki/Western_Europe

http://en.wikipedia.org/wiki/Roman_law

http://en.wikipedia.org/wiki/Codification_%28law%29

http://en.wikipedia.org/wiki/Common_law



http://en.wikipedia.org/wiki/Case_law

http://en.wikipedia.org/wiki/Precedent

http://en.wikipedia.org/wiki/Precedent


136

dalam suatu sistem rujukan yang menjadi dasar utama hukum. Istilah

civil law ini dapat dikontraskan dengan sistem common law di mana

kerangka berpikirnya berasal dari hukum yang dibuat oleh hakim yang

memberikan otoritas preseden atas keputusan pengadilan sebelumnya

dengan prinsip bahwa tidak adil untuk menerapkan fakta yang serupa

secara berlainan dalam waktu yang berbeda (doktrin keputusan hukum

atas dasar preseden).

Force Majeure

Force mejeure is a common clause in contracts that essentially frees both parties

from liability or obligation when an extraordinary event or circumstance beyond

the control of the parties, such as a war, strike, riot, crime, or an event described

by the legal term act of God (such as hurricane, flooding, earthquake, volcanic

eruption, etc.), prevents one or both parties from fulfilling their obligations under

the contract. In practice, most force majeure clauses do not excuse a party's non-

performance entirely, but only suspends it for the duration of the force majeure.

Force majeure (keadaan kahar) adalah suatu kausul dalam kontrak yang

pada dasarnya membebaskan kedua belah pihak dari kewajiban

membayar atau kewajiban lain ketika suatu kejadian luar biasa atau

keadaan di luar kendali para pihak, seperti perang, aksi mogok,

kerusuhan, kejahatan, atau suatu kejadian yang disebut dalam istilah

hukum sebagai tindakan Tuhan (Act of God) seperti badai, banjir, gempa

bumi, letusan gunung berapi, dan lain-lain, yang mencegah satu atau

kedua pihak dari memenuhi kewajiban-kewajiban mereka atas dasar

http://en.wikipedia.org/wiki/Contract

http://en.wikipedia.org/wiki/Legal_liability

http://en.wikipedia.org/wiki/War

http://en.wikipedia.org/wiki/Strike_action

http://en.wikipedia.org/wiki/Riot

http://en.wikipedia.org/wiki/Act_of_God

http://en.wikipedia.org/wiki/Hurricane

http://en.wikipedia.org/wiki/Flooding

http://en.wikipedia.org/wiki/Earthquake

http://en.wikipedia.org/wiki/Volcanic_eruption




137

kontrak itu. Dalam praktik, pada umumnya klausul force majeure tidak

membebaskan suatu pihak atas tidak dilaksanakannya kewajiban sesuai

kontrak secara keseluruhan, namun hanya untuk sementara menunda

pelaksanaan kewajiban itu selama adanya force majeure.

Law and order exist for the purpose of establishing justice and when they

fail in this purpose they become the dangerously structured dams that

block the flow of social progress.

- Martin Luther King, Jr.- ”

“


138

TENTANG PENULIS

Damos Dumoli Agusman, SH., MA,

Lulusan dari Fakultas Hukum Universitas Padjadjaran Bandung tahun

1987. Penulis menempuh pendidikan lanjutan di University of Hull,

Inggris dan memperoleh gelar Master of Arts di bidang Hukum

Internasional dan Politik pada tahun 1991. Penulis pernah mengikuti

program hukum internasional pada The Hague Academy of International

Law, Den Haag, Belanda. Penulis pernah menjabat sebagai Direktur

Perjanjian Ekonomi dan Sosial Budaya pada Kementerian Luar Negeri

tahun 2006-2010. Saat ini penulis bertugas sebagai Konsul Jenderal RI di

Frankfurt.

Adrianus Adityo Vito Ramon, SH., LL.M (Adv)

Kepala Seksi Hukum Udara, Subdit Perjanjian Kewilayahan, Direktorat

Perjanjian Politik, Keamanan dan Kewilayahan, Kemlu. Lulus dari

Fakultas Hukum Universitas Indonesia dengan program kekhususan

Hukum Internasional pada tahun 2007 serta Master of Laws (Advanced)

dari T. C. Beirne School of Law, the University of Queensland pada tahun

2012. Penulis memasuki Kementerian Luar Negeri pada tahun 2008 dan

mengikuti Sekolah Dinas Luar Negeri (Sekdilu) Angkatan XXXIII.


139

Frassminggi Kamasa

Frassminggi Kamasa menyelesaikan S1 Studi Rusia di Universitas

Indonesia, BSc Business Administration di University of the People dan S2

Hubungan Internasional di Victoria University of Wellington, New Zealand.

Pernah mengikuti kursus Ekonomi-Politik Internasional di Yonsei

University. Saat ini bertugas di Direktorat Eropa Timur dan Tengah,

Direktorat Jenderal Amerika dan Eropa. Penulis memasuki Kementerian

Luar Negeri pada tahun 2009 dan mengikuti Sekolah Dinas Luar Negeri

(Sekdilu) Angkatan XXXIV.

Nenda Inasa Fadhilah, SH., LL.M

Staf Fungsional Diplomat Sekretariat Direktorat Jenderal Hukum dan

Perjanjian Internasional. Memiliki minat utama pada isu-isu Hukum

Internasional Publik dan Hukum Investasi Internasional. Lulus dari

Fakultas Hukum Universitas Pelita Harapan dengan program

kekhususan Hukum Internasional pada tahun 2009 serta Master of Laws

(International Legal Studies) dari Georgetown University Law Center di

Washington, DC pada tahun 2013. Penulis memasuki Kementerian Luar

Negeri pada tahun 2010 dan mengikuti Sekolah Dinas Luar Negeri

(Sekdilu) Angkatan XXXV.


140


OPINIO JURIS Jurnal Opinio Juris menerima tulisan dengan tema hukum internasional, perjanjian internasional, diplomasi, hubungan internasional, dan isu-isu dalam negeri yang memiliki dimensi hukum dan perjanjian internasional. Ketentuan Penulisan: 1. Panjang tulisan 10—20 halaman kertas A4 (termasuk abstraksi, isi,

catatan kaki, dan daftar pustaka), format MS Word, spasi satu setengah, font Times New Roman ukuran 11. Untuk catatan kaki, spasi satu dan font Times New Roman ukuran 10;

2. Tulisan dapat dibuat dalam bahasa Indonesia atau bahasa Inggris; 3. Setiap naskah harus disertai abstraksi maksimal 1 halaman A4. Untuk

tulisan dalam bahasa Indonesia, abstraksi dibuat dalam bahasa Inggris dan untuk tulisan dalam bahasa Inggris, abstraksi dibuat dalam bahasa Indonesia. Jumlah kata abstraksi sekitar 100 kata.

4. Rujukan dibuat dalam bentuk catatan kaki (footnote); 5. Tulisan harus asli dari penulis, belum pernah diterbitkan, dan tidak

sedang dikirimkan ke penerbit lain; 6. Untuk setiap naskah yang masuk, redaksi berhak mengedit dengan tidak

mengubah maksud dan isi tulisan; 7. Apabila diperlukan, redaksi akan memberikan masukan dan

rekomendasi kepada penulis tentang tulisan yang dikirim; 8. Setiap naskah yang dikirim harus disertai daftar riwayat hidup singkat

penulis (curriculum vitae) yang setidak-tidaknya terdiri dari pekerjaan, pendidikan, alamat, dan nomor telepon yang bisa dihubungi;

9. Setiap naskah yang disetujui untuk diterbitkan akan mendapatkan kompensasi finansial;

10. File naskah beserta kelengkapan lainnya dapat dikirim ke email Redaksi.

Sekretariat Direktorat Jenderal Hukum dan Perjanjian Interansional Kementerian Luar Negeri

Jalan Taman Pejambon No. 6 Jakarta Pusat Telp: +62 21 3846633 Fax: +62 21 3858044

Email: [email protected] http://pustakahpi.kemlu.go.id/