JAKARTA, jakarta.suaramerdeka.com — More than 70 civil society organizations across Southeast Asia have called on governments of the Regional Comprehensive Economic Partnership (RCEP) member states to reject the inclusion of the Investor-State Dispute Settlement (ISDS) mechanism in the RCEP General Review scheduled for 2027.
The call was made during the Bisnis Indonesia Forum titled “Challenges of a Just Energy Transition in Trade and Investment Agreements”, held at the Faculty of Law, Universitas Indonesia (UI), in Jakarta on Wednesday (August 12, 2026).
The statement came amid the 14th RCEP Joint Committee Meeting in Manila, Philippines. The forum is discussing the scope of the agreement’s review, including green trade and supply chain resilience.
The coalition argues that ISDS could constrain governments’ ability to establish public policies, particularly those related to environmental protection and accelerating the transition to clean energy.
Transnational Institute (TNI) researcher Rachmi Hertanti said the mechanism gives multinational corporations special rights to sue governments when climate policies are deemed detrimental to their investments.
“Billion-dollar lawsuits hinder a just energy transition because of potential compensation payments to investors and their impact on countries’ fiscal capacity,” Rachmi said.
Data presented at the forum showed that 192 of the 257 coal-fired power plants still operating worldwide, or around 75 percent, are protected by at least one agreement containing ISDS provisions.
Within the RCEP region, ISDS coverage extends to 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.
Deputy Director of Publish What You Pay (PWYP) Indonesia Meliana Lumbantoruan warned that investor-state dispute settlement mechanisms could become a “silent veto” over national climate policies.
“With 88 percent of foreign-owned coal capacity in Indonesia already covered by investment agreements, any sovereign decision to restrict coal operations or strengthen emissions standards could expose the country to costly investor claims. A truly Just Energy Transition must not force states to pay twice,” Meliana stressed.
Chien Yen Goh of Third World Network also highlighted the significant risk of compensation claims. She referred to the dispute between ConocoPhillips and Venezuela, in which the compensation claim was reportedly capable of reaching 11.5 percent of the country’s gross domestic product (GDP).
Such liabilities are feared to exacerbate fiscal pressures and reduce funding that could otherwise be allocated to public welfare and climate financing.
Adam Wolfenden of Pacific Network on Globalization (PANG) Fiji raised another concern, saying that the threat of investor lawsuits can influence government decisions to revoke mining permits issued 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.
Source: Suara Merdeka.