Jakarta, VIVA – More than 70 civil society organizations in Southeast Asia have called on the governments of all member states of the Regional Comprehensive Economic Partnership (RCEP).
The groups are urging governments not to include an Investor-State Dispute Settlement (ISDS) clause in the RCEP General Review, which is scheduled to begin in 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, University of Indonesia (UI), Jakarta.
Discussion on Investor-State Dispute Settlement (ISDS) in the RCEP General Review
The civil society coalition’s statement comes in response to the 14th RCEP Joint Committee Meeting in Manila, Philippines, which is currently determining the scope of the RCEP review agenda. This includes provisions on green trade and supply chain resilience.
Civil society groups argue that the inclusion of ISDS could undermine the public interest, threaten government budgets, and hinder efforts toward a just clean energy transition across ASEAN.
Rachmi Hertanti, a researcher at the Transnational Institute (TNI), emphasized that the ISDS mechanism effectively gives multinational corporations special privileges 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 in a statement on Wednesday, August 12, 2026.
Data show that 75 percent, or 192 of the 257 coal-fired power plants worldwide that are still operating, are protected by at least one ISDS agreement.
In the RCEP region, this protection covers 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 ISDS must not become a “silent veto” that constrains Indonesia’s 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 said.
Chien Yen Goh of the Third World Network echoed these concerns. Referring to the ConocoPhillips v. Venezuela dispute, she noted that ISDS compensation could amount to as much as 11.5 percent of a country’s national GDP.
“This risks worsening fiscal deficits and diverting the state budget away from public welfare and climate financing,” she said.
Source: VIVA