JAKARTA – More than 70 civil society organizations in Southeast Asia have called on the governments of Regional Comprehensive Economic Partnership (RCEP) member states to reject the inclusion of the Investor-State Dispute Settlement (ISDS) mechanism in the RCEP General Review in 2027.
The call was made at the Bisnis Indonesia Forum titled “Challenges of a Just Energy Transition in Trade and Investment Agreements”, held at the Faculty of Law, University of Indonesia (UI), Jakarta, on Wednesday (12 August 2026).
The statement comes amid the 14th RCEP Joint Committee Meeting in Manila, Philippines. The meeting is discussing the scope of the agreement’s review, including green trade and supply chain resilience.
The coalition argues that ISDS could narrow governments’ authority to establish public policies, particularly those related to environmental protection and accelerating the transition to clean energy.
Rachmi Hertanti, a researcher at the Transnational Institute (TNI), said the mechanism gives multinational corporations special rights to sue governments when climate policies are deemed detrimental to their investments.
“Billion-dollar claims hinder the realization of a just energy transition because of potential compensation for investor losses and its impact on governments’ fiscal capacity,” Rachmi said.
Data presented at the forum showed that 192 of the 257 coal-fired power plants still operating worldwide, or approximately 75 percent, are protected by at least one agreement containing ISDS provisions.
In the RCEP region, the coverage reaches 88 percent of foreign-owned coal-fired power plants in Indonesia, 85 percent in Vietnam, 71 percent in China, 86 percent in Australia, and 30 percent in the Philippines.
Meliana Lumbantoruan, Deputy Director of Publish What You Pay (PWYP) Indonesia, warned that the investor-state dispute mechanism could become a “silent veto” over national climate policies.
“With 88 percent of Indonesia’s foreign-owned coal capacity already covered by investment agreements, any sovereign decision to restrict coal operations or strengthen emissions standards could expose the government to costly investor claims. A truly just energy transition must not force governments to pay twice,” Meliana stressed.
Chien Yen Goh of the Third World Network also highlighted the significant risk posed by compensation claims. She referred to the ConocoPhillips v. Venezuela dispute, in which the compensation was reportedly equivalent to as much as 11.5 percent of national GDP.
Such a burden could exacerbate fiscal pressures while reducing funds that should otherwise be allocated to public welfare and climate financing.
Further criticism came from Adam Wolfenden of the Pacific Network on Globalization (PANG), Fiji. He said the threat of investor claims can influence government decisions to revoke mining permits intended to protect Indigenous communities and the environment.
Meanwhile, Joseph Purugganan of Focus on the Global South Philippines highlighted growing competition for critical minerals in Southeast Asia. According to him, ASEAN countries need sufficient policy space to pursue downstream processing while developing domestic green industries without pressure from lawsuits brought by foreign corporations.
Currently, the RCEP investment chapter does not include ISDS. However, the provision requiring negotiations on ISDS after the agreement enters into force is considered to open the possibility of the mechanism being revisited during the 2027 review.
Olisias Gultom, Coordinator of the Indonesian Economic Justice Coalition (MKE), called for public interests to be prioritized over corporate profits.
“The ISDS mechanism must be halted and removed from RCEP and AANZFTA, because Indonesia and Australia in particular have proven overwhelmed in addressing these challenges,” Olisias said.
Yulo A. Lao Jr., a representative of Public Services International (PSI) Asia Pacific, also emphasized the importance of protecting democracy, workers’ rights, and public services from the dominance of corporate interests.
The coalition ultimately urged all RCEP member states to preserve their national policy space so that the energy transition can be implemented in a manner that is just, sustainable, and affordable for communities.
Source: MNC Tri Jaya