Legal Protection for Foreign Investments Aligned with the Second Principle of Pancasila: A Scholarly Exploration

Abstract

Foreign Direct Investment (FDI) plays a crucial role in a country's economic advancement. This research focuses on assessing the legal protection afforded to FDI, with a specific emphasis on applying the second principle of Pancasila, "Just and Civilized Humanity." The goal is to ensure sustainability, respect for human rights, and active participation in foreign investments in Indonesia. The research adopts a normative legal approach, analyzing key legal documents and regulations, including Law Number 25 of 2007. The evaluation encompasses procedures and policies aimed at preserving FDI in Indonesia. The research findings highlight the significant influence of the second principle of Pancasila in establishing a legal and moral framework for the protection of FDI. This principle underscores the importance of fair and dignified treatment for all individuals, including foreign investors. These principles are explicitly outlined in Law Number 25 of 2007, which delineates the rights and responsibilities of foreign investments, advocates for equal treatment, and supports sustainable and equitable economic growth. However, challenges in implementing legal protection for FDI persist, including discrepancies in legal interpretation, bureaucratic complexities, and shifts in government policies. Addressing these issues is crucial to fostering a conducive environment for foreign investments and aligning with the ideals of Pancasila for just and civilized humanity.