On January 10, 1967, the Government of the Republic of Indonesia enacted a new law on the investment of foreign capital (Law no. 1 of 1967). The former act on foreign investment of 1958 no. 78 has been withdrawn during the period of the “old order”. In the sphere of the “new order” now prevailing in Indonesia it is desirable to attract foreign capital in order to speed up the Indonesian economic development. For this purpose it is necessary to make clear provisions so that the foreign investors would have certainty about their position.

The foreign investment is to be realised in the juridical form of an enterprise, which is a body corporate according to the law of Indonesia and having its domicile within the territory of Indonesia. This is in accordance with the provisions of the Basic Agrarian Law 1964 concerning the requirements for foreign enterprises to obtain certain new rights on land.

Important is the stipulation that as a rule no nationalisation measures would be undertaken on the new investments. Expropriation is only possible in exceptional cases, when by Act it is declared that such measures are required for the State's interest. In that case compensation would be effected, the amount and ways of payments should be approved by the two parties. It ought to be effected in compliance with the principles of international law.

The Law further deals with special facilities granted to the foreign capital enterprise such as relief on taxes and other levies (tax holiday). Special attention was given to the cooperation of foreign and national capital (joint venture), which in the Government's opinion should be encouraged.

The Law also provides for an authentic interpretation of what is meant by the conception “foreign capital investment” and gives a specification of the fields of operation open to foreign capital.

Het hier volgende verhaal berust op aantekeningen, die ik vroeger op het Landsarchief te Batavia uit oude Siambundels maakte; ik heb ze hier met een bundel uit het oud-archief van “Buitenlandse Zaken” geverifieerd en wat nieuwe gegevens eraan toegevoegd (bundel B 109, Algemeen Rijksarchief inv. nr. 3164). Men verwachte hier geen doorwrocht artikel, waarin belangrijke rechtsvragen gesteld worden en al of niet beantwoord, noch een zwaar juridisch betoog. Er volgt niet anders dan een luchtig relaas, vergelijkbaar met reisverhalen uit lang vervlogen tijden over onbekende landen. En zijn niet Siam en Nederlands-Indië van een eeuw geleden voor ons mensen van 1967 ook onbekende landen?

The events in this world consist of a rather confused complex of facts, opinions and comments, in which truth and falsehood can hardly be distinguished. Factual information is, however, a prerequisite for an impartial and frank appreciation of these matters. It is above all in international politics that opposed versions of the facts often make a clear view of the situation impossible.