China is a pivotal country in the global energy sector. The country is not only a major producer of fossil fuels, but also the world’s largest importer of fossil fuels. China is also cementing its global dominance as a producer of renewable energy. It is a major investor in several countries across the globe, as well as a significant producer of clean-energy technologies. The Energy Charter Treaty (ECT), with its vast membership and related legal instruments and institutions, is the optimal platform for China in terms of promoting regional energy cooperation and facilitating the implementation of infrastructure projects within the framework of the “Belt and Road” Initiative.
As a result of the 2014 Review conducted under Article 34.7 of the Energy Charter Treaty, the Energy Charter Secretariat engaged in a series of activities to analyse the existing barriers to the establishment of energy investment, the benefits of shared principles for the establishment of investment as well as available policy options to remove such barriers by means of domestic and international rules.
Energy contracts are negotiated with a view to allocate benefits and responsibilities for years to come. Negotiating such complex and lengthy contracts is a challenge under any circumstances. However, governments often face challenges associated with a lack of expertise, imbalance of financial resources, time pressure and other factors, not necessarily always within their control. Thus, it is important to support governments to acquire expertise in contract negotiations for complex and long term projects. A well negotiated contract, with the full understanding of the government of all the potential policy options involved, reduces potential conflicts and facilitates its...
This report is the first step in an iterative process involving an industry task force established by the Energy Charter Secretariat, and is intended to provide a basis for a discussion of key issues relating to the potential standardisation of LNG SPAs. This review is primarily focused on medium to long term LNG SPAs, but it may also be applicable to certain spot contracts. In considering the standardisation of LNG SPAs, the intention is not to take into account specific market factors, such as whether there is (or is perceived to be) under or over supply of LNG in the market, or any other market related issues, now or in the future. It is considered that standard contracts and provisions...
This report is part of the activities carried out by the Energy Charter Secretariat in 2016-2017 aimed at preparing the groundwork on policy options for eliminating barriers to the establishment of energy investments. It contributes to these activities by answering the research questions: what are the international legal instruments available for removing barriers to the establishment of energy investments? What is the current practice of negotiating pre-investment obligations? What are the challenges in negotiating a new binding instrument in the energy sector and what lessons can be learnt from past experiences? What are the opportunities for negotiating a non-binding instrument?
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 is continuously updated, and revised versions are posted on the website.
This paper discusses the role of the World Trade Organization (WTO) and the Energy Charter Treaty (ECT) in the legal architecture regulating energy trade. It advocates that both legal institutions serve as vital tools to global energy governance in a rapidly changing trading landscape riddled with fragmentation. While both the WTO and ECT are treaty-based regimes, the WTO is a broad trade framework regulating trade in all goods and services of its Members, whereas the ECT is a specialised regime regulating trade and investment in the energy sector.
This publication compiles the relevant documents related to the dispute resolution mechanisms under the Energy Charter Treaty and provides some useful flowcharts to facilitate their understanding. We expect it to be a useful tool for both governments and companies.
Investment conflict prevention tools are designed to facilitate resolution of investors’ grievances at a very early stage, thereby preventing their escalation into full blown legal disputes. Should the issue invoked by the investor still persist and escalate into a full dispute, conflict management tools allow for an effective and coordinated response from the host state. Conflict prevention and management mechanisms are fundamental to the maintenance of a long-term relationship between the investor and the host state. The ability of states to respond to investment-related issues strengthens existing investment relationships and contributes to the maintenance of those relationships in the...
Energy is critical to lasting economic growth, employment and environmental sustainability. The energy mix is changing on a global scale: the share of renewable energy has been rising in recent years, and this trend is expected to continue, despite the recent fall in fossil fuel prices. This change is driven by a range of market, technology and policy factors that vary from country to country. Creating favourable conditions for sustainable energy investments will be one of the greatest challenges in the years to come in Africa. In particular, African countries need to signal to investors that they are ready for capital inflows in affordable, reliable and sustainable energy.
Modern energy is essential for socio-economic development, and such investments in the energy sector are crucial in realizing universal energy access in Africa. In this regard, the East African Community (EAC) has embraced regional cooperation as a means of developing regional markets and also as a means of attracting more energy investments in East Africa.
For more than 25 years the Energy Charter Process has set rules for good governance in the energy sector, starting with the European Energy Charter (1991), then the Energy Charter Treaty (1994) and recently with the International Energy Charter (2015). As global energy markets evolve, the Energy Charter seeks to expand to other regions such as Latin America, the Middle East and Africa. This expansion project is part of the mandate of modernisation of the Energy Charter. Colombia and Chile are the first Latin American countries to sign the International Energy Charter, a declaration of political intention towards a new age of global energy cooperation. Since then, Colombia and the Energy...
