Busting the myths around the Energy Charter Treaty
Five years after the Paris Agreement was signed, concern is mounting over another, lesser-known international treaty: the Energy Charter Treaty (ECT). The ECT is an antithesis to the Paris Agreement, allowing fossil fuel companies to sue countries over their climate policies rather than strengthening the global response to climate change.
The ECT was signed over two decades ago without much public debate. It protects all investments in the energy sector, including coal mines, oil fields and gas pipelines. Any state action that harms a company's profits from these investments can be challenged outside of existing courts, in international tribunals consisting of three private lawyers. Governments can be forced to pay huge sums in compensation if they lose an ECT case. Oil and gas company Rockhopper, for example, is suing Italy over a ban on new offshore oil drilling. Coal company Uniper/Fortum is threatening to sue the Netherlands for its coal phaseout. Several Eastern European countries have been sued because they took steps to lower electricity prices and cut into the profits of energy companies. The lawsuits demonstrate how the ECT can also be used against government action to reduce energy poverty.
As a result of the ECT's threats to ambitious climate action, the European Commission has called it "outdated" and "no longer sustainable". Parliamentarians from across Europe have called on EU member states to jointly withdraw from the ECT if it continues to protect dirty energy sources. In the wake of its first ECT-lawsuits, Italy
has already left the agreement.
But powerful interests are gearing up to defend the treaty – and even expand it to new signatory states, particularly in Africa, Asia and Latin America. These interests include the fossil fuels lobby, which is keen to keep its powerful legal privileges; lawyers, who make millions arguing ECT cases; the ECT Secretariat, which has close ties to both industries and whose survival depends on continuation of the treaty – and the list goes on.
In light of the growing controversy, this guide aims to help activists, concerned citizens, journalists and policymakers confront pro-ECT propaganda. It identifies the ECT's defenders and their arguments, and offers deeply researched counter-evidence.
At a time when all eyes should be focused on averting a climate catastrophe and safeguarding opportunities to regulate in the public interest, an outdated agreement that undermines climate action as well as governments' rights to act in the interests of their citizens must be scrapped. The ECT has to go – and it requires political and collective action as well as intelligent arguments to make that happen.
Themes
Read more about this subject
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Dossier /Investment treaties
Investment treaties must be inclusive, sustainable and fair. That means that they must not put the interests of companies before those of people and their living environment.
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Dossier /Trade agreements
International trade agreements often have far-reaching consequences not only for the economy of a country, but also for people and the environment. It is primarily the most vulnerable groups who suffer most from these agreements.
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News / 21 January 2019Launch of European campaign against unfair investment agreements
Today an alliance of more than 150 organisations, trade unions and social movements in countries across Europe is launching a joint programme against unfair trade and investment agreements, and especially against the controversial Investor-to-State-Dispute-Settlement (ISDS) mechanism. Under ISDS, investors can bring complaints against states whose social and environmental legislation pose a threat to their profits.
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News / 28 January 2020Both ENDS and SEATINI welcome ECT’s decision to halt expansion
Earlier this month, the Energy Charter Treaty (ECT) has decided to halt the geographic expansion to new member states, pending the finalization of the ongoing modernization process within the ECT. Both ENDS and our partner SEATINI, who amongst other things have been calling for this stop, welcome this decision.
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Publication / 30 October 2023
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News / 11 November 2024Kenya Terminates Bilateral Investment Treaty with the Netherlands
The government of Kenya has officially terminated its bilateral investment treaty (BIT) with the Netherlands, marking a significant win for economic justice and environmental protection. Kenya’s decision reflects a growing global trend of rethinking outdated treaties that often prioritize corporate interests over public welfare. The Dutch Minister for Foreign Trade and Development recently confirmed that Kenya unilaterally ended the treaty in December 2023, rendering it inoperative from 11 June 2024. Kenya now joins South Africa, Tanzania, and Burkina Faso as the fourth African country to terminate its BIT with the Netherlands.
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Dossier /Fair Green and Global Alliance (FGG)
Together with civil society organisations from all over the world, the Fair Green and Global (FGG) Alliance aims for socially just, inclusive and environmentally sustainable societies in the Netherlands and the Global South.
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Publication / 10 March 2016
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Publication / 12 November 2020
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Event / 21 February 2022, 16:00 - 17:30Webinar and launch of new publication about EU-Mercosur
What is the EU-Mercosur association treaty and why is it controversial? What could be the implications of the treaty for people and their livelihoods both in EU and Mercosur countries? For more information about these and other issues, see our new publication and join our interactive webinar next week!
Register here
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News / 24 October 2022Termination of Energy Charter Treaty by the Netherlands helps global energy transition
The decision of Minister for Climate and Energy Rob Jetten to withdraw from the Energy Charter Treaty (ECT) is good news for the energy transition in the Netherlands and beyond. Governments of countries that are party to this treaty can therefore shape the transition to sustainable energy without having to fear claims by Dutch-based businesses.
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Letter / 26 June 2020
Letter to governments over wave of Covid-19 claims in 'corporate courts'
Countries could be facing a wave of cases from transnational corporations suing governments over actions taken to respond to the Covid pandemic using a system known as investor-state dispute settlement, or ISDS. 630 organisations from across the world, representing hundreds of millions of people, are calling on governments in an open letter to urgently take action to shut down this threat.
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Press release / 12 November 2024Ruling climate case Shell: "Shell has an obligation to protect human rights."
The Hague, 12 November 2024 - The court has ruled in Shell's appeal in the Climate Case that Milieudefensie won against Shell in 2021. The Court of Appeal has ruled that the oil and gas giant has a responsibility to reduce its emissions, but has not imposed a reduction obligation.
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Dossier /The Climate lawsuit against Shell
Both ENDS is co-plaintiff in the climate lawsuit brought by Milieudefensie (Friends of the Earth The Netherlands) in 2018 against Shell to stop the company from causing harm to the climate. In 2021, the judge ruled in favor of the climate, but unfortunately the company appealed. The court will therefore render its verdict at the end of 2024.
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Publication / 24 September 2024
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Publication / 29 October 2024
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Event / 15 November 2020, 18:30 - 19:30Business as Usual: Dutch neo-colonialism in Brazil
The Netherlands is a major business partner to Brazil and has not been deterred by the record of human rights' abuses by Bolsonaro's government, nor by the coup d'Etat against the president Dilma Rousseff in 2016. How do the Dutch economic ties with the Brazilian political and corporate elites affect the Brazilian population, in particular indigenous peoples, nature and the global climate?
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News / 17 July 2024EU Exits Energy Charter Treaty (ECT): A Milestone for Climate Action
The European Union's decision to exit the Energy Charter Treaty (ECT) is a landmark victory for climate action. For years, the ECT's Investor-State Dispute Settlement (ISDS) mechanism has enabled fossil fuel companies to challenge climate policies, hindering progress towards sustainability.
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News / 18 April 2023The Future We See - dialogues about sustainable and just global systems
In these uncertain times of accumulating national, international and global crises, we need hope and inspiration more than ever. Fortunately, many hopeful ideas and initiatives are already existing that show that it is indeed possible to change the world - and especially the systems behind it - in a sustainable and fair way. What opportunities are to be found, what is hopeful, what is already happening and how can we, as the Netherlands, respond to this?
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News / 2 April 2014Saying NO! to free trade agreements
Today, on the 2nd of April, activists from Africa and Europe are staging a protest action in front of the European Parliament in Brussels to make the voices of the poor and marginalised citizens heard. Holding banners and chanting slogans to the beat of djembe drums, they asked the African and European governments to prioritise peoples’ rights and interest in their trade deals and particularly, in the EU trade and development policies with Africa. Why do they protest at this particular moment and what is Burghard Ilge of Both ENDS doing there?
