As the tenth round of negotiations on modernising the
Energy Charter Treaty (ECT) gets underway this week (18-21 January), a new
example of how this secretive corporate court
system is undermining climate and environmental policies of EU member
states has been brought to light.
The ECT, an axe to climate action
The Slovenian government decided that low-volume hydraulic
fracturing, also known as fracking, will be allowed in Slovenia under
amendments to the country’s mining rules. This will pave the way for Ascent Resources, a
UK company, to frack for gas in the Petišovci gas field in the east of the
country. Fracking is known to have strong negative
environmental impacts and to result in even higher climate emissions than
normal gas exploration. When the Slovenian government announced that Ascent
Resources needed to undertake an Environmental Impact Assessment (EIA) and
obtain environmental consent for the project, the company objected and
launched a claim against the Slovenian government under the Energy Charter
Treaty, seeking €100 million of taxpayers’ money in damages.
This threat seems to have been successful as the Slovenian government is now
laying the ground for the start of the fracking activities. The legislation was
adopted just a day after a rival bill that would ban fracking altogether was
discussed by a parliamentary committee.
Andrej Gnezda, project officer for Umanotera said:
“The Petišovci fracking project clearly shows how
energy companies are using the Energy Charter Treaty to extort governments and
demand special treatment. Instead of performing the needed impact assessment,
Ascent Resources decided to sue Slovenia for more than a 100 million euros.
This is simply unacceptable; governments need to leave the ECT and protect our
Time to #ExitECT
As another round of negotiations to modernize the ECT takes
place this week, Friends of the Earth Europe says this example is just another in a long line of cases demonstrating
how Investor State Dispute Settlement (ISDS) claims are being used by
corporations to obtain outrageous compensation and
to pressure governments to cancel or withdraw environmental and climate
policies and safeguards.
Paul de Clerck, trade campaigner for Friends of the
Earth Europe continued:
“Ascent Resources used this obscure treaty to pressure
the Slovenian government into allowing highly toxic and climate damaging
fracking for gas. It is clear that the ECT is gravely undermining desperately
needed climate and environmental policies.
“The climate crisis cannot wait for more negotiations
to fail to bring the ECT in line with the Paris Agreement – enough is enough.
The EU and member states must leave the Energy Charter Treaty.”
Following nine unsuccessful negotiations rounds during
which no progress has been made to phase out investment protection for fossil
fuels and to bring the ECT in line with climate commitments in the Paris
Agreement and the European Green Deal, the European Commission has given an
ultimatum for the negotiations. If no agreement is reached by summer 2022, the
Commission will start preparing to exit the ECT. EU member states such as
France, Poland and Spain have already been pushing for such an exit.