Have you ever heard of the Energy Charter Treaty (CT)? NAD – Netzwerk Afrika Deutschland – drew attention to actions taken by a citizen movement, named Compact, against the Charter described as the Climate Killer. And thus, surely a foe of the Paris Climate Agreement!
CT came into force in 1998 and has been signed by 54 countries ranging from Europe to Central Asia to Japan. The aim was to protect investments from arbitrary expropriation in states that lack a well-functioning judiciary.
Sounds ok? Hm. Since its inception, it appears that it served and continues to serve powerful energy companies to stifle ambitious efforts to protect the climate. It is also previously fought for compensation for failed investments. Compact pointed out that no other trade or investment agreement has spawned as many complaints, which have been as high as 136. These cases are heard in secret by arbitration courts.
An example quoted is the Netherlands, which wished to end the use of black coal, but a complaint by the German concern RWE threatened this plan. The German government was also sued by Vattenfall for compensation of 6.1 billion euros because of the decision to abandon the use of atomic power. This was seen before a Washington Arbitration Court multiple times in the past, accumulating costs of almost 22 million euros.
Many previous talks about amending CT have ended in a stalemate. Thus, four French ministers demanded the coordination and withdrawal of EU states from the treaty, and the Spanish government was in agreeance. Luxembourg’s Energy Minister demanded the EU leave the CT if further negotiations failed. 280 European Parliamentarians demanded a collective break with CT, which resulted in States only having 60 days to make their decision, a step Italy took on its own in 2016.
France and Spain proposed a collective withdrawal of the EU. This meant that before giving notice, the states had to agree to drop the arbitration procedure. This had the advantage of ensuring that the energy concerns based in one of these states were not able to use the so-called “Zombie clause”. This ruled that a country that had withdrawn from the Energy Charter, is still responsible for 20 years of a state measure that had harmed investors. Cancellation of membership would not affect current cases; however, every following project harmful to the climate would no longer enjoy investment protection. Two-thirds of complaints of EU companies were against an EU state so that the majority of future cases would fall by the wayside.
It seemed to me to be a cause that deserved to be well supported, such as Compact’s petition, even if the original aim, according to Wikipedia, was: “to promote energy security through the operation of more open and competitive energy markets, while respecting the principles of sustainable development and sovereignty over energy resources.”
By no means does the withdrawal from the Energy Charter enjoy the support of all EU states, powerful or otherwise!