The Energy Charter Treaty has been leaked – we must leave it   

Overshadowed by the events of the last few weeks, a few days ago, the text of the Energy Charter Treaty (ECT) – a treaty that provides ISDS (investor state dispute settlement) for investors in the energy sector – was leaked.

The treaty, which has been in existence since the mid-1990’s, is under renegotiation, and member states (including the UK) are due to make a final decision on whether to re-join the new version of the Treaty by November 22nd. The text leak proves once for all that we are right. War on WantAnd tens of thousands of our supporters have suspected about the so-called ‘modernisation’ of the treaty.

The proposed ‘modernisation’ would do nothing to change the fundamental problem with the ECT; that it empowers corporations to sue countries over policy measures (including climate policies) that affect their profits, through the ISDS mechanism. We demand that the UK government abandons the treaty.

To illustrate the danger ECT poses, the Netherlands is currently facing a 1 Billion Euro claim under ECT rules for its plans to eliminate coal. RWE, an energy giant, claims that this will impact their profits. The claim over the coal phase-out had until recently been as high as 2.4 billion euro, until the German government, in part-nationalising energy giant Uniper, demanded Uniper drop their ECT case against the Netherlands – yet another argument, as if it were needed, for public ownership.


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In another recent case, the Italian government has been ordered to pay out £210 million to a small UK oil and gas exploration company, Rockhopper, after Italy passed a ban on coastal oil drilling following mass public opposition to Rockhopper’s oil drilling project.

Unimproved and New

If the ‘modernised’ text is adopted it would see the UK signing up to at least another ten years of ISDS claims by fossil fuel companies – throughout the critical decade when we are supposed to be transitioning away from fossil fuels. The UK is already highly vulnerable to claims under the ECT, with financial risk of £11 billion in claims from the ECT, according to one study. Jacob Rees-Mogg’s intentions to extract “every last cubic inch” of fossil gas from the North Sea by issuing new licenses, only increases this risk, should a future government rethink and retract the licenses, corporations that hold them could sue the UK taxpayer for ‘lost profits’. All this while energy companies are making millions. record breaking profits.

Climate Justice vs ECT

The ECT could be ended and countries and communities in the south would benefit from its end. The vast majority of ISDS claims are taken against developing countries, and the “chilling effect” on climate policy threat of ISDS claims has been shown to beParticularly in developing countries.If the ‘modernised’ text is approved, those at the helm of the treaty will seek to immediately expand its membership in the global south. The ECT Secretariat appears intent on signing Nigeria, Bangladesh, Uganda and other countries to ISDS rules. These are rules that the IPCC has already warned have the “chilling effect” of delaying and blocking national climate legislation. Joining the ECT gives countries access to multi-million dollar claims, locks them in dependence on fossil fuels, and undermines an energy transformation. It shouldn’t surprise that there is a push to expand the treaty. The ISDS regime is based on corporate interests in the natural resources of Global South. The mechanism was created by a group that included executives from Shell and the predecessors of Total, Rio Tinto, ExxonMobil and Total in the 1950s when North corporations were threatened by national independence movements.

The treaty’s new and unimproved version is not universally accepted by all ECT members. The Polish government has announced it intends to leave the ECT – citing the chilling effect of ISDS on climate policy and the significant cost of membership to the taxpayer amongst its justifications. Poland is the only country to have officially announced its intention to leave the treaty prior to the ECT Conference, November. Spain is widely believed to be considering doing the same, having done so earlier. publicly calledThe EU should withdraw from the treaty. The motion was also passed by the Dutch parliament to withdraw from the treaty. petitionAlthough we have called on the UK government for its departure, the Labour Party has yet to reach an agreement on a position of withdrawal.

Trust is in short supply

Recent polling showed 73% don’t trust the UK Government to take measures to improve their lives, and 76% didn’t trust MPs on the same measure. The approach of the government, and of the Labour Party to the Energy Charter Treaty bear out this mistrust – neither of the two biggest parties have been willing to put people first and call for the UK to withdraw from a destructive, public-finance-draining and pro-corporate treaty whose time has come. The leak is a call for action.  It’s high time that our politicians show that they can put people and planet above lining the pockets of billionaire fossil fuel corporations and make the only decision on the ECT that the public can trust – to leave it.

Leah Sullivan is a Trade Justice Campaigner at War on Want.