Opponents of controversial energy investment treaty to go after old agreements
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Euractiv | 24 September 2024
Opponents of controversial energy investment treaty to go after old agreements
by Nikolaus J. Kurmayer
Having pushed the EU out of the controversial Energy Charter Treaty (ECT), pressure groups and MEPs are now aiming for the legacy of over 1,000 bilateral investment agreements signed over decades.
In May, the EU exited the ECT, a 1990s attempt to safeguard energy investments of former Eastern Bloc countries, which environmental campaigners said unduly protected fossil fuel investments and consequently blocked the continent’s green transition.
Meeting in Brussels on Tuesday (24 September), left-wing MEPs who pushed for the ECT exit agreed that their work is far from over. Their immediate goal is to work on an ‘Inter Se agreement’, a pact among EU countries to stop the application of the ECT immediately.
“The Inter Se agreement [between exiting countries] is not yet in place; negotiations are finalised, but we still have to push it through Parliament,” MEP Anna Cavazzini (Greens), who chairs the European Parliament’s single market committee (IMCO), told attendees of an event she hosted on Monday (23 September).
For the anti-ECT alliance, the second challenge is that 17 of the Union’s 27 members chose to remain party to the energy treaty. Bernd Lange, a German S&D lawmaker who chairs the trade committee (INTA), said that addressing the situation of “those member countries who will stay in the ECT” would be a priority.
Old investment agreements
The group’s biggest future goal is, however, to get rid of the accumulated stock of some 1,400 bilateral investment protection agreements that EU countries have signed. These agreements, commonly found in international trade, assure companies that their operations will not be unduly interfered with.
They can also be used to protect investments that may be affected by climate policies, such as coal phase-outs.
“There are still thousands of bilateral investment agreements that are even more old style than the current approach,” Cavazzini explained. Thus, the German politician wants Brussels to intervene.
“One very important action is to get the Commission to start an infringement procedure to be really clear and say member states are contradicting EU law,” she stressed.
To pressure EU countries, “there needs to be one example,” the green MEP urged.
Clementine Baldon, a legal expert and leading thinker of the anti-investment treaty community, urged attendees to “accelerate the ECT exit,” ensuring new agreements exclude climate policies like coal phase-outs from redress and address ‘old’ bilateral treaties (BITs).
At the same time, much like Cavazzini, the entire anti-ECT coalition recognises that the political tides have shifted: “It would be very difficult to have this victory today [in the new European Parliament],” said Marie-Pierre Vedrenne, a French liberal MEP (Renew).
Instead of relying on pressure tactics backed by the broad green movement, legal arguments are likely to take centre-stage in the future work of the alliance, which features NGOs like CAN Europe and the European Trade Justice Coalition.
Baldon suggested “using the European Commission’s own words” and pressing for an “objective assessment” that would “probably lead to a conclusion that investment treaties do not result in an increase in investment flows.”
Eastern Europe under pressure
At the same time, companies continue to wield investment protection treaties against EU countries.
In Slovenia, Ascent Resources is demanding €650 million from Ljubljana due to difficulties in obtaining a fracking license, as it relies on both the ECT and a Slovenia-UK bilateral agreement from 1996.
Discovery Global is demanding €2.1 billion from Slovakia over alleged blockades with respect to oil drilling licenses, relying on a 1991 US-Slovakia agreement.
Romania is facing a lawsuit based on the ECT by Clara Petroleum, with no publicly available information.
Meanwhile, Ukraine and Russia have been suing each other in dozens of cases since the latter invaded Ukraine, relying on their 1998 bilateral agreement, without seeing much progress. “Only the lawyers are getting rich,” one observer noted.
