Foreign Divestment Obligation Reaches This Far

The 51 per cent foreign divestment obligation has been under the spotlight of the United States Trade Representative since last year. The rule on the divestment of foreign-owned companies obtaining mining licences could be rendered ineffective under reciprocal trade agreements. In addition to reducing state control over the management of natural resources, the regulation could worsen the investment climate. The criticisms by the United States toward the 51 per cent foreign divestment rule in Indonesia’s mining sector have emerged since last year. The U.S. government considers this rule to add to the uncertainty of the investment climate in Indonesia. The divestment obligation was highlighted by the United States Trade Representative in the 2025 National Trade Estimate Report on Foreign Trade Barriers, published on 31 March 2025. The Office views Government Regulation No. 96 of 2021, updated by Government Regulation No. 25 of 2024, as a trade barrier. The government regulation provides that foreign companies that obtain mining licences must relinquish 51 per cent ownership to Indonesia.