Fair Freedom of Contract in Oil and Gas Construction Contract

Abstract

Indonesia adheres to the notion of a welfare state as mandated in Article 33 of the 1945 Constitution. Management of oil and gas by KKKS is subject to PTK 007 Rev.04 and refers to Article 1320 of the Civil Code. The definition of a construction work contract is regulated in Law Number 2 of 2017 concerning Construction Services which is analyzed using UNIDROIT. This study uses a normative method. It can be concluded that the freedom of contract arrangement has been adequate. However, its implementation still raises problems related to aspects of justice and balance. The description of the principle of freedom of contract in operational arrangements contains inconsistencies that create legal uncertainty and corner the position of the contractor. For this reason, the guidelines for oil and gas construction contracts need to be improved by adding regulations that ensure justice, certainty and efficiency.