On 28 February, Secretary-General Lentz attended a meeting at the House of Representatives of the Belgian Federal Parliament at the invitation of the Committee on Energy, Climate and Environment. In his intervention on the proposed motion for resolution on the Energy Charter Treaty (ECT) before the House of Representatives, the Secretary-General clarified the outcome of the negotiations on the modernisation of the ECT and the implications of postponing the adoption of the proposed text. In particular, the Secretary-General stressed that
- The “Flexibility Mechanism” in the modernised ECT directly implements the Paris Agreement and the principle of “Common But Differentiated Responsibilities” by allowing the Contracting Parties to pursue net zero goals considering their developmental goals. The Flexibility Mechanism in the modernised text would allow the EU to exclude protection for fossil fuel-related investments: no other investment protection agreement includes a similar mechanism. Furthermore, the European Commission has confirmed that the modernised text brings the ECT in line with EU’s energy and climate objectives, including the Paris Agreement.
- The modernised text fully solves any issues that the EU might have had with investment arbitration under the ECT: EU investors would not be allowed to initiate cases against the EU Member States.
- The ECT may not substitute insurance policy for investors: political risks insurance and investment protection under an investment protection agreement have different coverage and purpose, and the insurance policy does not prevent arbitration with a host country.
- Postponing or not adopting the modernised ECT would extend the protection of fossil fuel-related investments, and deprive the Contracting Parties of legal certainty that the ECT does not apply in the intra-EU context and that they may phase out investment protection for fossil fuel-related investments without the risks of investment arbitration.
Further clarifications provided to the Committee can be found in the letter of the Secretary-General in French and English (unofficial translation).
