CONFIDENTIALITY CLAUSES IN INVESTOR-STATE CONTRACTS FOR THE PROTECTION OF TRADE SECRETS AFTER PROMULGATION OF THE INDONESIAN ACT ON PUBLIC INFORMATION DISCLOSURE

Abstract

A confidentiality clause is a clause in investor-state contracts which is in the operative part of the contract to guarantee adequate protection of the trade secrets of the contracting parties. This article argues that there is a need to change the current practice where investor-state contracts in Indonesia utilizes broadly defined confidentiality clauses as a means to protect trade secrets in international business transactions. This is because a broadly defined confidentiality clause is contradictory to the provisions of the Act on Public Information Disclosure (APID). APID is aimed mainly at providing public information disclosure. The public information includes public contracts, such as investor-state contracts. Therefore, a new model of the confidentiality clause is needed for the protection of trade secrets as intended by the Act on Trade Secrets (ATS) and contract law as well as public information disclosure as intended by APID. This article employs doctrinal legal research. The research utilized, primary, secondary, and tertiary legal authorities. The primary legal material intensively used in this article consists of mandatory-primary legal authorities, in the form of statutes and contracts. The contracts used are the investor-state contracts of Aceh Province, Indonesia. The finding shows that a new model of the confidentiality clause can be created by accommodating both the interest of the state for providing public information disclosure based on APID and the interest of investors for the protection of trade secrets based on ATS and contract law. Investor-state contracts are a specific type of contract which has specific characteristics that apply to both private law and public law. They are different from purely international commercial contracts which only apply private law. Investor-state contract drafters need to be aware of this difference and provide a more balanced confidentiality clause in the contracts.