The Artificial Intelligence (AI) has recently transformed the global discussion. From the launch of ChatGPT by OpenAI to the introduction of Llama’s AI open source, the international community has responded to this development with various opinions. On the other hand, governments worldwide have been reacting to this technology with different strategies. Countries in the European Union (EU) have passed the first AI law, which adopts risk-based and right-based approaches. Moreover, China focuses on legislating specific features of AI, while countries like Singapore and the United States of America have been choosing a ‘wait and see’ approach.
While countries are still waiting for the results of their strategies, the geopolitical perspective has pushed the governance of AI to be actively implemented. Countries in G7 issued the Hiroshima Resolution, in which AI governance was introduced. The United Nations has adopted the resolution on AI safety, which directly addresses AI Governance. While governance has been echoed throughout the world, countries are aware that AI cooperation is needed to elevate their political position. China and ASEAN have started their commitment to the AI field by signing the Plan of Action for Peace and Security between ASEAN and China (2021-2025), which will be followed by the amendment of the China-ASEAN Free Trade Agreement.
As a part of the international community, Indonesia has the urgency to keep being relevant and sovereign in international cooperation, including technology. According to Tortoise Research, Indonesia sits 48th in the research category and 55th for development criteria. This means that Indonesia needs more technological resources to advance its position in technology competition. Thus, it is essential to establish an accommodating strategy for advancing AI and ensuring robust governance by negotiating better AI clauses in bilateral or multilateral agreements and supporting ASEAN’s role from a regional governance perspective.
Bilateral/Multilateral Agreements
In international law, countries can agree to a pact. It means that each country promises to respect any terms and conditions stated herein as a binding law. Therefore, in international relations practice, bilateral or multilateral agreements become the legal basis for the contracting countries. Moreover, the agreement also protects non-state actors in operating their activities in foreign jurisdictions by relying on protection clauses such as National Treatment, Fair and Equitable Treatment, and Most Favoured Nation to ensure the safety of their trade or investment practices.
Regarding ongoing trends of AI governance clauses in the International Investment Agreement (IIA), no countries have yet to stipulate AI governance clauses in their IIA. Thus, geopolitical and technological advancements have been influencing AI Governance in developing countries. This is done by transplanting or fully ‘copy-pasting’ AI Policy from technology-developed countries into developing countries. While this is a common practice in legal system globalisation, this can cause problematic issues. Firstly, each country may adopt a different legal system. The AI Regulation in the common law system sits as co-director, with the judge’s verdict as the legal source. The potential of judge interpretation regarding some articles in the regulation as ratio decidendi can deviate from the meaning of some regulations, including AI-specific regulation. Thus, this cannot be applied in civil law countries. Secondly, each country has distinct economic, industrial, sociological, and ideological conditions. Therefore, placing specific AI Regulations from one country to another should be approached carefully to evade social turmoil and economic misapplication.
Based on the above arguments, adopting AI Clauses in IIA has several advantages. Firstly, IIA can ensure proper AI governance knowledge transfer by implementing knowledge sharing mutually and transparently. Technology-developed countries are interested in penetrating developing markets by ensuring a friendly regulatory climate in those countries. Thus, developing countries could negotiate clauses that benefit them and guard their legal system against regulatory capturing from developed countries’ agents, including economic agents like AI and technology corporations. Secondly, developing countries can bring technology-developed countries to a legal dispute settlement under IIA for any breach and misapplication of the AI Clause. Consequently, developing countries can re-balance political positions in trade and investment-related activities, including AI Governance and technology supply.
ASEAN as A New Stronghold
IIA can provide legal and political protection for developing countries in ascertaining a balance of AI cooperation and economic transactions among contracting parties. However, in practice, developing countries suffer from legal and policy dictation from technology-developed countries for two reasons. Firstly, developing countries lack knowledge and use case resources that affect their level of understanding about AI than developed countries. Secondly, developing countries are known for their ultimate interest in attracting inbound investment and trade from developed countries. Hence, developing countries may waive any regulatory constraint to fascinate developed countries, including deregulation or policy-making processes driven by developed countries. Consequently, for the above reasons, an asymmetrical position occurs.
For several reasons, Indonesia must integrate its economic diplomacy with ASEAN to tackle this implication. First, ASEAN has been shifting their intention to be a more integrated and unified community. ASEAN member states have declared to establish economic integration initiatives like ASEAN Community Blueprint 2025, which aims to widen connectivity among ASEAN member states. Second, ASEAN member states have been preferring to conclude ASEAN IIA. Since the Churchill Mining Case, Indonesia has been terminating its bilateral agreements with other countries and supporting the ASEAN IIA with other countries, such as the China-ASEAN Free Trade Agreement and ASEAN-Australia-New Zealand Free Trade Agreement. Even though this type of agreement can take a longer time to conclude, Indonesia can use ASEAN as its shield to integrate its interests with other member states and provide tougher provisions to its counterparties.
Enforcing Its Municipal Laws
Indonesia must enforce its law to have a more goal-minded, flexible, and balance-oriented approach. The EU’s adoption of the EU AI Act shows that regulation can adopt more than one approach. It does not have to neglect legal protection and enhance innovation support as current start-up technologies have advocated. It also does not have to neglect innovation and priorities for legal protection, as non-government organisations have emphasised. The regulation can support innovation and create constraints to achieve responsible AI. The critical role that the government must play is to balance all interests. Regulatory capturing, which is happening in Indonesia’s AI policy process, must be evaded by opening a proper transparency process. Inviting all stakeholders to give suggestions and actively making entry barriers to avoid excessive lobbies are essential to ensure the government’s objectivity remains intact. Therefore, it is also crucial for the civil servant to have adequate knowledge about AI from legal, ethical, and technical standpoints. The same level of understanding by the civil servants will help them critically assess each stakeholder’s suggestion. Thus, they can objectively include important suggestions and say ‘no’ to any harmful suggestion that is not aligned with Indonesia’s needs.
