Volume 7-1 Abstract


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	The Energy Charter Treaty in 2000: In a New Phase by Craig Bamberger, Jan Linehan & Thomas Waelde Chapter from Energy Law in Europe, edited by Martha M Roggenkamp, Oxford University Press, forthcoming Dec 2000 The Energy Charter Treaty (ECT) is unique as a multilateral treaty, limited in scope to the energy sector, which establishes within that sector legal rights and obligations with respect to a broad range of investment, trade and other subjects such as the transit of energy goods, competition and the environment, and which in most cases provides for the enforcement of those rights and obligations. The purpose of the Treaty, as described in its Article 4, is to 'establish a legal framework in order to promote long-term co-operation in the energy field, based on complementarities and mutual benefits, in accordance with the objectives and principles of the [European Energy] Charter.' With respect to investment, the Treaty follows up on ideas originally conceived by John Maynard Keynes in the 1940s (the Havana Charter) and reflected in heretofore largely non-binding declarations and guidelines on foreign investment, and it set the stage for continuing efforts within the Organisation for Economic Co-operation and Development (OECD) to agree a non-sectoral 'Multilateral Agreement on Investment,' the so-called 'MAI.' A distinctive feature of the ECT is that its main investment obligations can be enforced by private parties against non-complying states through binding international arbitration. This enforcement is available not only against non-complying Eastern countries, but also against the OECD states and the European Communities. The opening for signature of the ECT in Lisbon on 17 December 1994 marked the end of the first, four and a half year, phase of the Treaty's development; this was a period of arduous negotiations among more than fifty states and the European Communities that had been set in motion by the June 1990 suggestion of Prime Minister Ruud Lubbers of the Netherlands that energy co-operation could help stimulate economic recovery in Eastern Europe and the former Soviet Union (FSU). In April 1998 a second phase of the ECT's history drew to a close, as the Treaty entered into force following the achievement of the thirty ratifications that were required for its entry into force; this second phase witnessed the development of functioning ECT institutions on a provisional basis, and the intensive pursuit of further trade and investment negotiations that were mandated for this period by the Treaty. While the negotiations for a new investment instrument have not yet been finalized, there inevitably will be less focus on negotiations for new instruments in the foreseeable future. Looking ahead, one may anticipate a complex and challenging third phase in which some Treaty signatories -- including important participants such as the Russian Federation -- continue to apply the Treaty only provisionally even though it has entered into force for the majority of signatories. Without underestimating the importance of ratification by the Russian Federation, it is significant that nearly all former FSU signatories have ratified and are now Contracting Parties, an important achievement, given that the impetus for the Energy Charter process was to create market conditions in these and other Eastern countries and to foster East-West co-operation. The ECT and its origins have been discussed comprehensively elsewhere. This chapter briefly explains the Treaty's origins; describes the Treaty's main features and its effects; provides an update on recent developments; and casts an inquisitive eye on the Treaty's future. In the process, it offers fresh commentary on a few issues that may be of special interest to European readers. Go to top of page