PERBEDAAN KEPENTINGAN ANTARA HOST STATE DENGAN INVESTOR TERKAIT KLAUSULA FAIR AND EQUITABLE TREATMENT DALAM BILATERAL INVESTMENT TREATY.

In the current era of economic neoliberalization, most countries worldwide have adopted open market economy policies. This shift aims to accrue economic benefits for national development by attracting foreign investment. The investment climate, often referred to as the Investment Climate (IC), plays a crucial role in shaping the decisions of foreign investors. This paper examines the impact of the Fair and Equitable Treatment (FET) clause in Bilateral Investment Treaties (BITs) on the relationship between host states and investors. The FET clause is integral in protecting investors' legitimate expectations, but its vague interpretation and broad scope can lead to disputes. The paper explores how the FET clause may affect the balance between investor rights and the sovereign rights of host states. Additionally, it delves into the challenges arising from dynamic inconsistency problems and suggests strategies for minimizing conflicts. Case studies involving disputes, such as the Churchill Mining vs. Indonesia case, illustrate the complexities surrounding FET. The paper concludes by proposing measures to clarify and limit the FET clause's application to strike a balance between investor protection and host state sovereignty. [ABSTRACT FROM AUTHOR]