Journal of State Public Policy (JSPP)
Vol. 1 No. 3 (2026): Journal of State Public Policy

Mitigating Indirect Expropriation in FDI: The Legal Efficacy of Home State Measures

Adin Pramudito Nugroho (Faculty of Law, University of Indonesia, Indonesia)



Article Info

Publish Date
31 May 2026

Abstract

The normative conflict between indirect expropriation claims and sovereign regulatory rights creates a systemic regulatory chill within contemporary international investment law. Traditional host state defenses, including explicit treaty carve-outs, remain epistemologically inadequate against expansive arbitral interpretations. Applying a doctrinal legal methodology, this study systematically analyzes new-generation investment treaties, arbitral jurisprudence, and institutional frameworks to evaluate the legal efficacy of Home State Measures (HSM) as a preventive mitigation mechanism. The research clearly demonstrates that operationalizing HSM through conditional political risk insurance and extraterritorial sustainability reporting mandates effectively nullifies static investor expectations. Furthermore, integrating pre-litigation dispute prevention mechanisms, specifically utilizing the Ombudsman model and Cooperation and Facilitation Investment Agreements, successfully transforms reactive commercial arbitration into proactive diplomatic mediation. This paradigmatic institutional shift significantly prevents frivolous litigation, strictly corrects fundamental structural asymmetries inherent in capital exportation, and conclusively safeguards the host state's ecological and essential public policy space from predatory foreign corporate claims.

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Journal Info

Abbrev

jspp

Publisher

Subject

Description

Journal of State Public Policy (JSPP), published triannually (April, August, and December) by Cerdas Pedia, is a peer-reviewed, open-access academic journal dedicated to the rigorous analysis of public policy formulation, state administration, and legal regulatory frameworks. Serving as a critical ...