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As a result of the ECT's threats to ambitious climate action, the European Commission has called it "outdated" and "no longer sustainable".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be focused on averting a climate catastrophe and safeguarding opportunities to regulate in the public interest, an outdated agreement that undermines climate action as well as governments' rights to act in the interests of their citizens must be scrapped.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 / 26 november 2024The Time to Rethink Investment Rules: Amplifying Civil Society Voices
At the core of the Fair, Green, and Global (FGG) Alliance’s mission is the commitment to building a just and sustainable world. As members of this alliance, Both ENDS, SOMO, and the Transnational Institute (TNI) recognise the urgent need to reimagine global investment frameworks. These frameworks, entrenched in outdated treaties such as Bilateral Investment Treaties (BITs) and the Energy Charter Treaty (ECT), often prioritise corporate profits over human rights, environmental sustainability, and social justice.
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Letter / 9 december 2024
People and the Planet Entebbe Declaration: Reclaiming investment frameworks for people and the planet
The time for change is now. Civil society demands international investment
frameworks that are aligned with economic justice, social and environmental
sustainability, and the needs of communities worldwide. -
News / 21 januari 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 januari 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 oktober 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 maart 2016
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Press release / 12 december 2024Website names companies excluded by global investors and banks
The Hague/San Francisco, Dec 12, 2024 - The updated version of the Financial Exclusions Tracker is released today: financialexclusionstracker.org. The website tracks which companies are being excluded by institutional investors, pension funds and banks due to human rights, public health and sustainability issues. The most common reasons for exclusion are links to fossil fuels, weapons or tobacco.
The Financial Exclusions Tracker is an initiative from an international coalition of NGOs striving for more transparency and information disclosure.
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News / 25 november 2024Empowering Civil Society: Shaping investment policies for climate and sustainable development in Africa
From 26-29 November 2024, Both ENDS and its partners will host the Civil Society Forum on Investment Policies, Climate and Sustainable Development Goals in Entebbe, Uganda. Our colleagues Iván and Fernando explain the importance of this event: “Through this event, we aim to provide an in-depth perspective on the impact of current investment policies on climate and environmental issues, with a strong focus on the African continent.”
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Publication / 12 november 2020
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Event / 21 februari 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 oktober 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 juni 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 oktober 2024
