Global Justice Now | 21 May 2022
UK-wide protests over £11bn legal threat to climate goals
● UK government urged to exit controversial Energy Charter Treaty, dubbed ‘the fossil fuel industry’s secret weapon’
● Protests to take place around UK on Saturday, as talks over treaty reform stall
Campaigners from Global Justice Now are protesting around the country today to demand the UK withdraws from the Energy Charter Treaty, an international agreement allowing fossil fuel companies to claim billions from governments when they take action against climate change.
The UK faces legal claims of up to £11 billion from oil and gas companies over the steps needed to meet its Paris Agreement target, reaffirmed at COP26 in Glasgow, to keep warming below 1.5°C, according to recent research published in the journal Science.(1) Campaigners fear fossil fuel company claims could prevent or delay the necessary climate action being taken.
Global Justice Now activists are protest in London, Bexhill, Bradford, Bristol, Cambridge, Kilmarnock, Macclesfield, Manchester, Sheffield and York on Saturday to demand the UK withdraws from the Energy Charter Treaty (ECT).
In north London, a protest is taking place at Uniper’s Enfield Power Station from 1pm. The German company is suing the Dutch government for £774 million over its decision to phase out coal under the ECT.
The protests follow talks over reform to the ECT in Brussels this week between the 50 countries that are party to the treaty, including the UK. Reports suggest they have been unable to agree on changes.(2)
It is the final round of talks ahead of a crunch June deadline when European Union countries have said they will consider withdrawal if the treaty cannot be reformed to be in line with the Paris Agreement. Campaigners are urging the UK to follow suit and commit to withdraw.
Jean Blaylock, trade campaign manager at Global Justice Now, said:
"The fossil fuel industry is already doing everything in its power to delay and deter climate action, and we have lost too much time already to this glacial pace. The last thing we need is for governments to give these companies a secret weapon in their battle to squeeze maximum profits out of climate breakdown. But that’s what we’ll be doing if we fail to withdraw from the Energy Charter Treaty.
It cannot be right for big polluters to get massive payouts simply because governments are making the necessary decisions to tackle the climate crisis. It is an affront to democracy and an affront to justice. It is long past time to bring this shadow corporate court system to an emphatic end."
The legal claims are made possible by a controversial system of secretive tribunals known as investor-state dispute settlement, or ISDS, which is written into trade treaties. The Energy Charter Treaty, which contains these tribunals, is the greatest source of risk of these potential claims and is already being used by fossil fuel companies.
The most recent UN Intergovernmental Panel on Climate Change report warns of “regulatory chill” from investor-state disputes, specifically mentioning the ECT and highlighting the risk of fossil fuel corporations using this to “block” the phase-out of fossil fuels by making the transition unaffordable.(3)
The day of action follows protests on Wednesday targeting companies involved in ECT cases. In Salisbury, a protest took place at the offices of Rockhopper, an energy company suing the Italian government for £236 million over its refusal to allow offshore oil drilling. In Glasgow, protesters marched to the office of Clyde & Co, a specialist law firm that helps to perpetuate the ISDS system.
ISDS has successfully been kept out of the UK’s new post-Brexit trade treaties with Australia, New Zealand and Canada, but it remains written into the Energy Charter Treaty.
1. Tienhaara, K., Thrasher, R., Simmons, B.A., Gallagher, K.P. (2022) “Investor-State Disputes Threaten Global Green Energy Transition”, Science, 5 May 2022, https://doi.org/10.1126/science.abo4637. Also summarised in: Global Development Policy Center, “Investor-state disputes threaten the global green energy transition”, https://www.bu.edu/gdp/2022/05/05/investor-state-disputes-threaten-the-global-green-energy-transition/
2. Frédéric Simon, “Europe edging closer to withdrawal from Energy Charter Treaty”, Euractiv, 17 May 2022, https://www.euractiv.com/section/energy/news/europe-edging-closer-to-withdrawal-from-energy-charter-treaty/
3. IPCC, Climate change 2022: mitigation of climate change, 2022, https://www.ipcc.ch/report/ar6/wg3/, p14-72 & p14-81
Global Justice Now is a UK campaign group tackling the root causes of global poverty and inequality.
Energy Charter Treaty
The Energy Charter Treaty is an investment deal between fifty countries specifically for the energy sector, signed in 1994. It is being used for many ISDS claims including by:
- Uniper and RWE to sue the Netherlands over phasing out coal power
- Rockhopper to sue Italy over a ban on offshore oil drilling
- Ascent Resources to sue Slovenia over fracking
Reform proposals have been being debated since 2018, with eleven rounds of talks but no agreement so far. On fossil fuels, the reform proposals would at most exclude claims by fossil fuel investors after the mid 2030s, but possibly in some cases up until 2040. As fossil fuel projects need to be cancelled now, this would allow fossil fuel investors to continue to make claims when climate action is needed. Campaigners therefore consider the reform to be weak and inadequate, and call for withdrawing from the ECT instead.
Recently countries have admitted that fear of being sued under the Energy Charter Treaty has affected their climate policy. Denmark set climate targets twenty years later than the science tells them, and Germany paid twelve times the compensation it would usually do in its own coal phase out in exchange for fossil fuel corporations promising not to use the Energy Charter Treaty.