Legal Analysis in the Mechanism of Shares Divestment in Indonesian Mining Law

Widhayani Dian Pawestri, Iman Prihandono

2018

Abstract

This paper is based on shares divestment issues which are still problematic and caused some negative impacts. First, Indonesian government is always late in making purchases or executing divestment. Second, although the divestment is conducted by Indonesian government, it is often difficult to obtain funding for the purchase of divestment shares. Third, even if the divestment fund is successfully obtained, the divestment is conducted through a syndicated process which uses loan money from foreign party. This study shows that the dispute on divestment share pricing and potential losses between countries and foreign investors is not unusual to be happened. In some cases, governments and foreign investors often disagree on how to calculate the share price or the value of the company upon expropriation, or when the business license is revoked. The Indonesian government can learn the approaches from previous awards of the ICSID. In this research, there are 2 alternatives for divestment mechanism in the mining sector, namely: determining a clearer mechanism of the price of shares divestment and the divestment without the purchase of shares. This article is a legal research and the approaches used are conceptual approach, statute approach, case approach, comparative approach, and economic analysis of law.

Paper Citation

in Harvard Style

Pawestri W. and Prihandono I. (2018). Legal Analysis in the Mechanism of Shares Divestment in Indonesian Mining Law.In Proceedings of the International Law Conference - Volume 1: i-NLAC, ISBN 978-989-758-482-4, pages 355-361. DOI: 10.5220/0010050903550361

in Bibtex Style

@conference{i-nlac18,
author={Widhayani Dian Pawestri and Iman Prihandono},
title={Legal Analysis in the Mechanism of Shares Divestment in Indonesian Mining Law},
booktitle={Proceedings of the International Law Conference - Volume 1: i-NLAC,},
year={2018},
pages={355-361},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010050903550361},
isbn={978-989-758-482-4},
}

in EndNote Style

TY - CONF

JO - Proceedings of the International Law Conference - Volume 1: i-NLAC,
TI - Legal Analysis in the Mechanism of Shares Divestment in Indonesian Mining Law
SN - 978-989-758-482-4
AU - Pawestri W.
AU - Prihandono I.
PY - 2018
SP - 355
EP - 361
DO - 10.5220/0010050903550361