CAPITAL INVESTMENT: A CASE STUDY OF ACEH PROVINCE, INDONESIA

The capital investment in Aceh between 2010 and 2017 happens after the conflict and tsunami. Management of capital investment, its growth, and factors inhibiting capital investment after conflict and disaster are the focal points of this study. The purpose of this research is to determine how foreign investors in Aceh are protected under Law Number 25, 2007 and what types of security factors are present in Aceh. This research consisted of normative legal or library research. As normative legal research, only secondary data, which includes primary, secondary, and tertiary legal materials, were utilized. Based on the analysis, the Province of Aceh's management capital investment consisted of management governed by legislation governing Aceh's governance and legislation governing capital investment. In addition, the regional government of Aceh stipulated legislation governing capital investments. The growth of capital investment, both domestic and foreign, exhibited an increase, although it was not statistically significant. This slow growth was caused by security insurance, inadequate infrastructure, and the lack of legal certainty in conflict, earthquake, and tsunami-affected regions. This study applies a normative legal method and library legal research technique. Doctrinal research is also known as normative legal research or library legal research. 2013) As normative legal research, the study was conducted by analyzing secondary data and legal literature. Included in the secondary data for this study are primary, secondary, and tertiary legal sources. of


INTRODUCTION
The last few decades have been known as the globalization era. a time when there are no more international borders. (Ahmad, 2014) Consequently, all changes occur rapidly. Information technology development is becoming increasingly limitless. Without a doubt, investment development is also accelerating. (Firdaus, 2010) Critical is the ability to survive at this speed (Herniati, 2015). As a case study, this article described and analyzed capital investment following the conflict and natural disaster in the Indonesian province of Aceh. In the article, the management of capital investment, its development, and factors inhibiting capital investment in Aceh province after the conflict and disaster at the turn of the 21st century are discussed..

Research Method
C a p i t a l I n v e s t m e n t : A C a s e S t u d y O f A c e h P r o v i n c e , This study applies a normative legal method and library legal research technique. Doctrinal research is also known as normative legal research or library legal research. (Ibrahim, 2013) As normative legal research, the study was conducted by analyzing secondary data and legal literature. Included in the secondary data for this study are primary, secondary, and tertiary legal sources.

Capital Investment in Aceh Province
Malahayati in "Strategy for Increasing Investment in Aceh Province for the Period 2010-2016," has viewed that investment in Aceh Province is hindered by a number of factors. They are as follows: the lack of productive C a p i t a l I n v e s t m e n t : A C a s e S t u d y O f A c e h P r o v i n c e , economic activities; the unsupportive quality of human resources; infrastructure and non-infrastructure that have yet to be maximized; illegal levies; the bureaucratic process is complex and unfair; the lack of local entrepreneurs' awareness of regional territorial potentials; and the use of regional budgets that contain political elements (Malahayatie, Strategi Peningkatan Investasi Provinsi Aceh Periode 2010-2016, 2020. Another study is conducted by Fikriah and Meta Wulandari entitled "Analysis of the Effect of Public Infrastructure Investment on Economic Growth in Aceh" which also discusses investment in Aceh. According to the study, infrastructure and economic growth have a relationship and provide tangible benefits to the community. Good infrastructure can have a direct positive effect on economic expansion. (Ilmi, 2017) In this case, government investment is required to construct a variety of public facilities; each additional infrastructure capacity will directly contribute to accelerating economic growth (Fikriah, 2015). On the basis of the aforementioned findings, it would be worthwhile to conduct research on investment in Aceh Province and the issues that arise when dealing with foreign investors entering Aceh Province.
Aceh's provincial government is one of Indonesia's provincial governments. Therefore, the regulations of Indonesia, including those pertaining to capital investment, also apply to the province of Aceh. Capital investment in the Province of Aceh is governed by either regional or local regulations.
The central government's regulation regarding capital investment includes Following the provisions of UUPA, capital investment is governed by Section 6 of C a p i t a l I n v e s t m e n t : A C a s e S t u d y O f A c e h P r o v i n c e , I n d o n e s i a Kanun Jurnal Ilmu Hukum Abdul Hakim, Gemala Dewi Vol. 24, No. 1, (April, 2022), pp. 80-105. Chapter 22 on the economy, which addresses Trade and Investment. This chapter discusses natural resources, oil and gas management, marine and fisheries, trade and investment, free trade zones, the Sabang free port, land and space utilization, and economic infrastructure.
Section 6 of the law regulates certain capital investment-related principles.
First, Acehnese citizens are permitted to manage trade and investment. Article 165, subsection (1) of the UUPA authorizes the people of Aceh to engage in domestic and international trade and investment that is governed by law and regulation.
Second, the Government of Aceh and district governments in Aceh are authorized to attract international tourists and to issue licenses for domestic and foreign investments, export, and import based on national norms, standards, and procedures pursuant to paragraph (2)  UUPM rendered invalid two laws. (1) Aceh Government and district/municipality government in Aceh shall accord equitable treatment to all investors of any countries that carry out investment activities in Aceh in accordance with provisions of laws and regulations. (2) Treatment, as intended by section (1), shall not apply to investors of a country that has acquired privileges by virtue of a treaty with Aceh.
(3) Aceh Government and the district/municipality government in Aceh shall ensure safety, security and legal certainty for investors who invested in Aceh in accordance with provisions of laws and regulations.
(4) Aceh Government and the district/municipality governments in Aceh shall ensure the safety of the assets owned by investors who invested in Aceh from asset grab, unlawful use, seizure, or anarchic action by third parties against capital investment asset or investors.
The second aspect deals with insurance for the safety of investment ownership against a takeover, as in Article 5 of Aceh Qanun Number 5 of 2009 regarding capital investment, which reads: (1) Aceh Government and the district/municipality governments in Aceh must not take over ownership rights of investors, except allowed by law.
(2) In the case that the Aceh Government or the district/municipality governments in Aceh take over ownership right of investors as intended in point (1), Aceh Government or the district/municipality governments will compensate the investors basedthe on market price in accordance with provisions of laws and regulations.
(3) If both parties fail to reach an agreement of compensation as intended by point (2), the settlement thereof shall be made through the process of negotiation, mediation, consultation, conciliation, and arbitration.
The third aspect deals with the rights to transfer and repatriate. Article 6 of Aceh Qanun Number 5 of 2009 regarding capital investment mentions that: (1) Investors may transfer and repatriate the assets they own to parties the investors desire in accordance with the provisions of laws and regulations. (2) Assets not counting assets as intended by point (1) shall be assets that are determined by law as assets controlled by the state.
(3) Investors shall be granted the right to transfer and repatriate their assets in accordance with the provisions of laws and regulations.
(4) Provision, as intended by point (1), shall not detract from: a. the rights of Aceh Government and district/municipality governments in Aceh to draw taxes, retributions, and/or royalties and/or other regional Government revenues from investments in accordance with provisions of laws and regulations; and b. enforcement of the law to avoid losses to the regional government.
(5) In the case that there is a legal responsibility that has not yet been settled people's society, culture, and local wisdom in order for them to enjoy prosperity.
Second, to increase the effectiveness of attracting investors to invest in Aceh and to ensure the economic, social, and cultural rights of the Acehnese, regulations on the implementation of capital investment should be enacted to ensure a business environment that is conducive and encouraging for modal investment in Aceh.
The treatment of capital investment is still regulated in this qanun but with a slightly different system. First, regarding the equitability of treatment for investors, point (3) (1) Aceh Government and district/municipality government shall accord equitable treatment and provide security and convenience for all domestic and foreign investors that carry out investment activities in Aceh in accordance with provisions of laws and regulations.
(2) Aceh Government and district/municipality government in Aceh shall ensure legal rights for investors who invested in Aceh without invalidating legal rights of locals in accordance with provisions of laws and regulations.
(4) Aceh Government and the district/municipality governments in Aceh shall ensure the safety of the assets owned by investors who invested in Aceh from asset grab, unlawful use, seizure, or violence by third parties against capital investment asset or investors. (1) Aceh Government and the district/municipality governments in Aceh must not take over ownership right of investors, except with reasons allowed by provisions of laws and regulations.
(2) In the case that Aceh Government or the district/municipality governments in Aceh take over ownership right of investors as intended in point (1), Aceh Government or the district/municipality governments will compensate the investors with the amount mutually decided.
(3) In the case that Aceh Government or district/municipality governments in Aceh agree to compensate the investors as intended by point (2), Aceh Government or district/municipality governments in Aceh shall seek for approval from Aceh Legislative Council/District Legislative Council.
Thirdly, regarding rights to transfer and repatriate, point (5) (2) and (4) is amended so that Article 6 states that: The treatment of investors in Aceh Province is outlined in Article 6 of Aceh Qanun Number 5 of 2009 concerning Investment, which states: (1) Investors may transfer and repatriate their assets in accordance with applicable laws and regulations. (1a) Asset transfer referred to in (1) shall be agreed upon by the Aceh Government/District Government; (2) Assets not counting assets referred to in (1) shall be assets determined by law to be state-controlled assets; (3) Investors shall be granted the right to transfer and repatriate their assets in accordance with applicable laws and regulations. (4) The provision, as intended by paragraph (1), shall not diminish: a. The rights of Aceh Government and district/municipality governments in Aceh to draw taxes, retributions, and/or royalties and/or other regional Government revenues from investments in accordance with applicable C a p i t a l I n v e s t m e n t : A C a s e S t u d y O f A c e h P r o v i n c e , I n d o n e s i a Kanun Jurnal Ilmu Hukum Abdul Hakim, Gemala Dewi Vol. 24, No. 1, (April, 2022 To encourage capital investment, this qanun retains the treatment of capital investment, including equitability of treatment to investors, assurance of no takeover of ownership rights, and rights to transfer and repatriate.

The Development of Capital Investment in the Province of Aceh
Foreign direct investment is an investment activity undertaken by foreign investors to conduct business on the territory of the Republic of Indonesia  According to the data presented in the table, domestic investment in fixed assets has increased over time. In some years, however, the number of projects and the amount of investment decrease, although the decline is not statistically significant. Multiple projects have expanded in Aceh Province, including spice farming, coffee farming, and oil palm farming in the agricultural sector. However, the mining industry experienced a slight decline as a result of the licensing obstacles encountered by numerous investors entering Aceh.
According to the data, domestic and foreign capital investment in the Province of Aceh have not increased significantly.

Factors inhibiting capital investment in Aceh Province
In general, legal certainty, taxation, and labor are the factors that impede capital investment. According to Thomas Lembong, the head of the Capital Investment Coordinating Board, there are five factors inhibiting capital investment in Indonesia: regulation, complicated regulation, quality of regulation consistency, inflexible tax rule, low quality of human resources, land issues in central government and regional government, and infrastructure issues as the primary factor supporting an industry (Modal, 2017).
As a post-conflict and post-disaster region, the Province of Aceh faces a number of impediments to both domestic and international capital investments, as detailed below..

a. Security
Some opinions establish a connection between war and commerce.
Conspiracy theorists argue that a country's economy is artificially boosted through war. Despite this, economic development based on all sources as soon as possible after the war is the best course of action due to the impact of the war itself, which has consumed a substantial amount of funds (P. Martin, 2008).
Nevertheless, investors are typically wary of investing in countries that have recently been at war, primarily for security reasons. In addition, it is feared, for the country's national security, that an invasion from another country could adversely affect the country's economy (J, 1997). This is possible if the trade involves primary goods such as food and fuel, which have a significant impact on the economy.
In Indonesia, security is typically not a concern for capital investments. Due to the fact that the Province of Aceh is a post-conflict zone, this issue has become a major concern. In some instances, a security issue led to the termination of a domestic capital investment activity (News, 2017).
Even though the conflict ended with the signing of a peace agreement between the Indonesian government and the Free Aceh Movement, the conflict did not end immediately in post-conflict areas. Since the signing of the agreement, the 99 C a p i t a l I n v e s t m e n t : A C a s e S t u d y O f A c e h P r o v i n c e , I n d o n e s i a Kanun Jurnal Ilmu Hukum Abdul Hakim, Gemala Dewi Vol. 24, No. 1, (April, 2022 However, infrastructure levels have not been sufficient to support capital investment activities. (Zunaidah Sulong, 2005) Infrastructure availability is one of the most important requirements for capital investment. Electricity and transportation options, such as land, water, and air transport, are necessary for the operation of businesses in Aceh. Therefore, the availability of good roads, ports, and direct international flights is of utmost importance (Nur, 2018).

c. Legal Certainty
There are numerous obstacles investors face when investing in a country, ranging from taxes and tariffs to non-tariff barriers like moral values and others.

CONCLUSION
It can be concluded that the regulations governing capital investment in the Aceh province after the conflict and disaster include laws governing Aceh's administration and laws governing capital investment. Additionally, domestic and foreign capital investments have increased, although the rise was not statistically significant. Lastly, the factors inhibiting capital investment in the Province of Aceh after the conflict and disaster are a security concern, the availability of infrastructure, and legal certainty concerns.
101 C a p i t a l I n v e s t m e n t : A C a s e S t u d y O f A c e h P r o v i n c e , I n d o n e s i a Kanun Jurnal Ilmu Hukum Abdul Hakim, Gemala Dewi Vol. 24, No. 1, (April, 2022), pp. 80-105.