President Susilo Bambang Yu-dhoyono is telling his ministers to prepare for the worst after the government recently entered into arbitration with an international mining company.
Churchill Mining (LON:CHL) said it has now filed for international arbitration in its dispute regarding the East Kutai coal project (EKCP) in Indonesia, 75 per cent owned by Churchill.
MNCs can always refer to Bilateral Investment Treaty (BIT) to which Indonesia is a party and use the "umbrella clause" in the BIT to transform a problem that was originally a contractual dispute into an international investment dispute.