Nationalization Of Share By Divestment In Indonesia

 

The State's Right to Control Natural Resources in National and International Law

 

The State's right to control natural resources in international legal documents can be such as the United Nations General Assembly Resolution of December 21, 1952, concerning the principle of self-determination in the economic field of each country (economic self-determination) which affirms the right of every country to utilize the natural resources freely Starke JG (1989) proposed,  the United Nations General Assembly Resolution of 1974 and the Declaration on the establishment of a New Indonesian Economic System and the 1974 Charter of Economic Rights and Duties of State reaffirmed the state's right to control natural resources to increase economic growth (Parry et al., 1986).

State sovereignty over other natural resources is also regulated in the Covenant on Economic, Social, and Cultural Rights (Article 1) and the Covenant and Civil Political Rights (Article 1) on December 16, 1966, affirming the right of a country to utilize its natural resources freely (Kuswadi, 2015). The statement can completely be seen from United Nations Resolution 1803 (XVII) on December 14, 1962, concerning "Permanent Sovereignty over Natural Resources", which briefly explains (Botchway, 2006):

The rights of the people and the nation to permanent sovereignty over their natural wealth and resources must be conducted in the interest of national development and the welfare of the people of the country concerned.

The exploration, development, and disposition of these resources, as well as the import of foreign capital required for this purpose, must be in accordance with the rules and conditions deemed necessary or desirable by the people and the state freely.

In cases where authorization is granted, the imported capital and income from that capital will be governed by its requirements, applicable national legislation, and by international law.

Nationalization, expropriation, or re-demand must be based on reasons or reasons for public utility, security, or national interests recognized as a pure individual or private interests, both domestic and foreign. In such cases, the owner must be paid appropriate compensation, in accordance with applicable regulations in the State taking such action in the implementation of its sovereignty and in accordance with international law in any case where the issue of compensation is controversial. Hence, the national jurisdiction of the State taking such action shall be exhausted. However, with the consent of the sovereign State and other interested parties, dispute resolution must be carried out through international arbitration or adjudication.

Based on the above principles, sovereignty over natural resources is also linked to the country's relations with other countries or foreign companies in terms of cooperation in natural resource management, for example in Point 'd' which allows for the nationalization or expropriation of private, domestic, or foreign property rights by the host country.

The consequence of United Nations Resolution 1803 is that every country has the sovereign right to freely trade with other countries and is free to dispose of its natural resources (Hobe, 2015). United Nations Resolution 1803 is an international agreement between developed countries and developing countries in the country's economic policies, especially in terms of natural resources. The international agreement of United Nations Resolution 1803 is the protection of natural resources for countries whose natural wealth has been explored, especially countries receiving capital because they are unable to cultivate them, as well as legal protection for countries providing capital both business entities and their citizens who have made concessions to the policy of the country that owns natural resources (Adolf, 2015).