Energy Charter Treaty

The Energy Charter Treaty ( engl. Energy Charter Treaty, ECT) is an international treaty, which originally had the integration of the energy sectors of the former Soviet Union and Eastern Europe into the European and global markets to the task after the end of the Cold War.

The Energy Charter underlying signed at The Hague on 17 December 1991. It was a political statement of the principles of international energy relations, including trade, transit and investment. The intention to negotiate a legally binding contract has also been expressed in it.

The legally binding contract itself was signed in December 1994 in Lisbon, together with a protocol on energy efficiency and related environmental aspects ( PEEREA ). The Treaty and the Protocol entered into force in April 1998.

The contract covers four main areas:

The protection of foreign investment, according to the principle of the application of national treatment or most favored nation treatment ( whichever is more advantageous ) and the protection against the major non-commercial risks;
Non-discriminatory conditions for trade in energy materials, products and energy-related equipment on the basis of WTO rules, and regulations for ensuring of reliable cross-border energy transit through pipelines, networks and other forms of transport;
The resolution of disputes between participating States and, in the case of investments between investors and host countries;
The promotion of energy efficiency, as well as approaches to minimizing the environmental impact of energy production and consumption.

Russia as a leading exporter of energy in the region has a ratification of the contract date failed, although it has declared to apply the provisions of the Treaty provisionally pending ratification. This means that Russia is the Energy Charter Treaty applies, if it is in line with Russia's Constitution, laws and regulations.

Russia has made ratification of the ECT Transit Protocol negotiations of a dependent. This protocol would reinforce the provisions of the ECT in energy transit in order to reduce some specific operational risks that affect energy transit still. Negotiations on the text of a Transit Protocol began in early 2000, and a compromise proposal, which reflected the ongoing discussion between the European Union and Russia, was submitted to the Energy Charter Conference ( the managerial and decision-making body of the organization) on 10 December 2003.

However, a mutual decision could not be reached on the basis of the compromise proposal. A complicating factor was that energy issues, including transit, also the subject of bilateral negotiations between the European Union and Russia in the context of the accession process of Russia to the World Trade Organization ( WTO) were. The negotiations on the Transit Protocol have been temporarily suspended. The suspension was lifted in 2004, after Russia and the EU had agreed on the terms of Russia's WTO accession. Other bilateral negotiations between the EU and Russia have taken place since the fall of 2004.

In December 2006, Russia indicated that ratification of the ECT was unlikely in view of its rules on third party access to pipelines. Members of the Foreign Affairs Committee of the European Parliament demanded beginning of September 2007, the EU should only support Russia's membership in the World Trade Organization ( WTO), when Russia sticking to the ECT.

In December 2007, the Energy Charter Conference reaffirmed its support for a conclusion of the negotiations and the Beschließung the Transit Protocol to the Energy Charter Treaty, to expand the existing rules of the Treaty. The working group on trade and transit of the Energy Charter was asked to return in 2008 to the multilateral consultations on the draft Transit Protocol.

Worth knowing

The Energy Charter Treaty includes an obligation for Member States to facilitate energy transit through their territory and to safeguard the existing transit. However, the Treaty does not provide for forced the parties to give third parties access to infrastructure.

While the Energy Charter is based on the idea that international investment and technology transfers bring mutual benefit in the energy sector, the national sovereignty over energy resources remains a core principle of the Treaty (Art. 18 ECT). Each member country is free to decide when and how its national energy resources are to be developed and to what extent its energy sector should be open to foreign investors.

An objective of the Treaty is to promote the transparency and efficiency of energy markets, but it is for the governments to establish the structure of the national energy sector. There is no obligation to privatization of energy companies owned by the state or the dismantling of vertically integrated energy companies.

Membership

The Energy Charter Treaty and the Protocol on Energy Efficiency and Related Environmental aspects were signed in December 1994 and entered into force in April 1998. Currently, 51 countries, the European Community and Euratom signed the contract or acceded to it. Thus the total number of its members is now 53

All members have ratified the Treaty, with the exception of Australia, Belarus, Iceland, Norway and Russia. Belarus and Russia have declared until the ratification of the Treaty provisionally apply the rules, if it is in accordance with their national constitutions, laws and regulations.

All members are represented in the Energy Charter Conference ( the managerial and decision-making body of the organization) and the subordinate bodies. The Conference meets regularly to discuss matters that have an impact on the cooperation of the Contracting Members in the energy, and to verify the implementation of the ECT and the PEEREA and to consider new tools and joint activities within the framework of the Energy Charter.

Members of the Energy Charter Conference

Albania Albania
Armenia Armenia
Azerbaijan
Australia Australia *
Belgium
Bosnia and Herzegovina Bosnia and Herzegovina
Bulgaria
Denmark Denmark
Germany Germany
Estonia Estonia
Europe European Union

Finland Finland
France France
Georgia Georgia
Greece Greece
Ireland Ireland
Iceland Iceland *
Italy Italy
Japan Japan
Kazakhstan
Kyrgyzstan Kyrgyzstan
Croatia Croatia
Latvia Latvia
Liechtenstein Liechtenstein

Lithuania Lithuania
Luxembourg Luxembourg
Macedonia Macedonia
Malta Malta
Moldova Moldova
Mongolia Mongolia
Netherlands The Netherlands
Norway Norway *
Austria Austria
Poland Poland
Portugal
Romania Romania
Russia Russia *
Sweden Sweden

Switzerland Switzerland
Slovakia Slovakia
Slovenia Slovenia
Spain
Tajikistan Tajikistan
Czech Republic Czech Republic
Turkey Turkey
Turkmenistan Turkmenistan
Ukraine Ukraine
Hungary Hungary
Uzbekistan Uzbekistan
United Kingdom United Kingdom
Cyprus Republic of Cyprus

Note: * - denotes states where the ratification of the Energy Charter Treaty is still pending

Observer

Twenty states and ten international organizations have observer status in the Energy Charter. Observers are entitled to attend all meetings of the Charter and the discussions at the working level and have access to all relevant documents, reports and analyzes. This will give the countries the opportunity to familiarize themselves with the Charter and its functions familiar to possibly later join the ECT.

States

Afghanistan Afghanistan **
Algeria Algeria
Bahrain Bahrain
China People's Republic of China
Iran Iran

Jordan Jordan **
Canada Canada **
Qatar Qatar
Kuwait Kuwait
Morocco Morocco

Nigeria Nigeria
Oman Oman
Pakistan Pakistan **
Saudi Arabia Saudi Arabia
Serbia Serbia **

Flag of South Korea South Korea
Tunisia Tunisia
United States of America **
Venezuela Venezuela
United Arab Emirates United Arab Emirates

Comment: ** - denotes observer states which have signed the Energy Charter of 1991

International organizations

Association of Southeast Asian Nations ( ASEAN)
Baltic Sea Region Energy Cooperation ( BASREC )
Black Sea Economic Cooperation ( BSEC)
CIS Electric Power Council
European Bank for Reconstruction and Development ( EBRD)

International Energy Agency ( IEA)
Organisation for Economic Cooperation and Development ( OECD)
Economic Commission for Europe (UNECE)
World Bank
World Trade Organization ( WTO)

Energy Charter Conference

The Energy Charter Conference is the governing and decision-making body of the organization. The chairman of the Energy Charter Conference Selim Kuneralp, Turkey, and the Deputy Chairman Anatoly Janowskij, Russian Federation, and Odd Sverre Haraldsen, Norway. The Energy Charter Conference has the following subsidiary bodies:

Ad hoc strategy Group,
Investment group,
Trade and Transit Group,
Working Group energy efficiency and related environmental aspects,
Budget Committee,
Legal Advisory Committee.

In addition brings the round with the industry as a consultative body to the views of the private sector on issues of investment in the energy sector, cross-border trade and energy efficiency in the conference and their groups.

The Legal Advisory Task Force was established by the Secretariat of the Energy Charter, 2001 at the development of model contracts for cross-border oil and gas pipelines to support.

Secretariat

The Energy Charter Conference is supported by a secretariat based in Brussels. The functions of the Secretariat are:

Monitoring the implementation of the ECT and the PEEREA
Organization and support of meetings of the Conference and its subsidiary bodies
Analysis and consulting activities for the Conference and its subsidiary bodies
Representation of the conference in relations with non - Member States, organizations and institutions
Support of negotiations to new instruments on behalf of the Conference.

Since January 1, 2012 Urban Rusnák is the Secretary General. Vladimir Rachmanin was Deputy Secretary-General in July 2008.

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