TRANSFORMING INTERNATIONAL CONTRACT LAW TO SUPPORT THE GREEN ECONOMY: NORMATIVE AND PRACTICAL ANALYSIS

Abstract

Climate change and biodiversity loss force the global community to pursue sustainable development paths. The green economy paradigm—defined by the UN Environment Programme (UNEP) as an economy that is low-carbon, resource-efficient, and socially inclusive—provides a framework for environmentally sound growth. This study examines how international contract law, particularly the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts, can facilitate the transition to a green economy. Using a combination of normative legal analysis, case studies, and policy comparison, the research identifies the limitations and opportunities for integrating environmental and social criteria into contracts. It reviews green procurement practices and offers legislative and policy recommendations for Indonesia and other developing countries. Although the CISG does not explicitly impose environmental obligations, its underlying principles of good faith and uniformity can be interpreted to promote transparency, traceability, and risk-sharing of environmental impacts. Furthermore, frameworks for green public procurement—such as those advocated by the OECD—demonstrate how government contracting can be a strategic instrument for emission reduction and innovation. The study ultimately recommends revising domestic contract law to incorporate sustainability clauses, harmonizing it with relevant international instruments, providing capacity-building for stakeholders, and fostering public–private partnerships (PPPs) that include environmental criteria from the outset.

Keywords: green economy; international contract law; CISG; green procurement; sustainable development; Indonesia; Paris Agreement.