Renegotiation of Work Contract and Work Agreement of Coal Mining Undertaking in Indonesia: Legal Aspect of Renegotiation vs Pacta Sunt Servanda Principle

25 Pages Posted: 17 Oct 2013  

Ahmad Redi

University of Indonesia (UI) - Faculty of Law

Date Written: July 12, 2013

Abstract

Article 169 letter b of Act Number 4 of 2009 on Mineral and Coal Mining regulates that the stipulation mentioned in work contract (KK) and coal mining undertaking work agreement (PKP2B) shall be adjusted 1 (one) year at the latest since this Act is promulgated except concerning state revenue. Instruction for adjustment of KK/PKP2B article is not automatically can be implemented in view of there is opinion differences between the Government and mining company as the party to implement KK/PKP2B. Mining company is of the opinion that KK/PKP2B has pacta sunt servanda principle that must be recognized by the parties that has to be respected. Therefore, if either party does not want to carry out contract adjustment, then KK/PKP2B adjustment cannot be forced. This very differences in opinion that becomes the basis for intention to renegotiate KK/PKP2B between the Government and mining company which becomes the party in the contract, consequently effort is needed to find solution on the implementation of instruction of the contract/agreement in Article 169 letter b of Act No. 4 of 2009 on Mineral and Coal Mining with the intention of the coal mining. This article will discuss in critical-analytical manner on legal aspect of renegotiation with the validity of pacta sunt servanda in KK/PKP2B in Indonesia.

Keywords: renegotiation, contract/agreement, pacta sunt servanda

Suggested Citation

Redi, Ahmad, Renegotiation of Work Contract and Work Agreement of Coal Mining Undertaking in Indonesia: Legal Aspect of Renegotiation vs Pacta Sunt Servanda Principle (July 12, 2013). Available at SSRN: https://ssrn.com/abstract=2292865 or http://dx.doi.org/10.2139/ssrn.2292865

Ahmad Redi (Contact Author)

University of Indonesia (UI) - Faculty of Law ( email )

Fakultas Hukum UI, Kampus UI Depok
Depok, West Jave 16424
Indonesia

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