The European Commission has submitted a proposal for a Council decision to conclude the Investment Protection Agreement (IPA) between the European Union and Indonesia, following the finalisation of negotiations on 23 September 2025. The IPA establishes a legal framework for protecting EU and Indonesian investors, based on standards including non-discrimination, protection against expropriation without compensation, fair and equitable treatment, and free transfer of funds. The agreement preserves governments' right to regulate in the public interest, with specific exceptions for prudential, security, and general policy space. A dispute settlement mechanism includes investor-state mediation and state-state dispute settlement; the EU and Indonesia commit to restart negotiations on investor-state dispute settlement and interpretative guidance on taxation no later than the IPA's entry into force. The IPA will not affect the EU's budget or require changes to EU rules, regulations, or standards. A Committee will supervise implementation, and domestic advisory groups meeting at least once a year will submit views. The Council must now decide whether to conclude the IPA, which would lock in investment protections and dispute mechanisms between the EU and Indonesia. The agreement is expected to boost investment flows by providing legal certainty and predictability for investors, while maintaining regulatory autonomy for both parties. Key stakeholders include EU investors in Indonesia, Indonesian investors in the EU, EU member states, and the European Commission. The proposal, dated 29 June 2026, is a formal step in the EU's ratification process, with the European Parliament expected to give its consent before the Council can adopt the decision.
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