The Energy Charter Treaty obliges member states to endeavour to provide non-discriminatory treatment to investors from other member states in the 'pre-investment phase', i.e., the making of investments. This obligation, described in more detail in Article 10(2) of the Treaty, applies to the parties who have ratified the Treaty or apply it provisionally.
The 'Blue Book'
Any country that maintains measures that do not conform to this standard of treatment are obliged to register them. The full register of such non-conforming measures is published in the so-called 'Blue Book'. Progress towards removal of the measures recorded in the Blue Book is kept under regular review by the Energy Charter Conference and its Investment Group.
The existing non-conforming measures have been arranged, for reason of ease of reference, into five categories:
- Land and real estate restrictions;
- Measures regarding registration and screening;
- Reciprocity requirements; and
- Other non-conforming measures.
In addition to this 'best endeavours' clause, Article 10(4) provides for negotiations on a legally binding instrument (the so-called "Supplementary Treaty") for the pre-investment phase. Such a document would allow investors from member countries to be on equal legal footing with their domestic competitors in the host country when, for instance, applying for the granting of a licence/concession or in the context of privatisation procedures.
Negotiations on this Supplementary Treaty started in 1996, and have not been concluded. In autumn 2002, Member States decided to put negotiations on hold pending the outcome of discussions in the World Trade Organization on a multilateral framework for foreign direct investment. If the current comprehensive review of the Blue Book shows that there are still several discriminatory measures in the pre-investment phase, the Investment Group may discuss the possibility of resuming negotiations of a Supplementary Treaty.
For reference, the draft of the Supplementary Treaty is available here. It consists of the following parts: