This chapter considers how Indonesia's policies in relation to investment treaty drafting have changed over time and the extent to which these changes may have been driven by concerns to protect regulatory space.Despite having signed a relatively large number of treaties relative to other Asian States and being an important destination for foreign direct investment, Indonesia has faced few claims and has never been ordered to compensate an investor for violations of an investment treaty.It is also observed that the volume of laws and regulations on the books in Indonesia has increased dramatically since the beginning of the new millennium, with little evidence that the threat of investment treaty claims has affected the extraordinary growth of legislation and regulation comprising Indonesia's "legal jungle".Indonesia has nevertheless sought to modernise its investment treaties, including to add provisions clarifying or limiting the scope of the fair and equitable treatment standard and the circumstances in which a regulatory measure may amount to indirect expropriation.The chapter also briefly considers what Indonesia's treaty practice reveals about its position in relation to reform of Investor-State Dispute Settlement, including its efforts to promote the use of conciliation.

This chapter assesses whether the EU’s recent empowerment to conclude international investment agreements has made these agreements more development-friendly. Focusing on the EU’s choice of partner countries, substantive protection and treatment provisions as well as procedural provisions on investor-to-state dispute settlement, the chapter finds that the EU’s international investment agreements (IIAs) have indeed become more development-friendly in comparison to the international investment agreements of EU member states. They strengthen state interests vis-à-vis investor interests. The chapter tests whether these policy changes are due to European law obligations applying to EU international investment agreements, increased politicisation of IIA policy-making in the context of EU’s Common Commercial Policy, or the aggregation of diverse member state preferences into a common European approach. It finds that politicisation and aggregation of member state preferences primarily fuelled policy changes while legal obligations played no significant role. From a theoretical perspective, the chapter lends support to rational choice institutionalism, which suggest that institutional changes affect policy substance.