Letter to the editor
The immense power of the fossil fuel industry is hindering progress towards the vital goal of net zero, but far too few people are aware of one particular part of the tragic saga.
Amazingly, an international treaty called the Energy Charter Treaty (ECT) allows foreign companies to sue a national government over any new policy that threatens the future value of their assets. New environmental regulations are at risk as a result of this treaty, even they are aimed at meeting Paris climate commitments for the sake of the future of the planet. The UK, like other Energy Charter Treaty members, is exposed to the risk of exorbitantly high investor claims. Inevitably, governments will be deterred from taking essential, radical climate action – so called “Regulatory chill”. Last year in an authoritative UN IPCC report, scientists explicitly warned about the detrimental impact of the Energy Charter Treaty, as have the UK government’s own independent advisors, the Climate Change Committee. https://www.globaljustice.org.uk/wp-content/uploads/2023/05/GJN_EnergyCharterTreaty-campaignBriefing_May2023.pdf
I was shocked to discover that fossil fuel company claims are decided by undemocratic and unaccountable tribunals outside national legal systems. Campaigners describe these as special “corporate courts”. Moreover these tribunals must completely disregard any impact on climate and other vital environmental issues or human rights.
In the jargon, this whole legal process is known as Investor State Dispute Mechanism (ISDS). That’s probably familiar to campaigners against the notorious TTIP trade agreement with the US in the days of Trump.
The Energy Charter Treaty is out-dated and dangerous in the climate emergency. We need radical climate action, curbing fossil fuels and a just energy transition. Leading European countries and the EU itself recognise this and plan a co-ordinated withdrawal from the Energy Charter Treaty. Why is the UK government so reluctant to act decisively? Taxpayers are already at risk of claims of billions by foreign energy investors. Why are ministers still approving new oil and gas licences that could lead to even more future claims?
Exiting the Energy Charter Treaty would give the UK the freedom to forge its own ambitious path towards net zero without the risk of liability to pay out billions of public funds to foreign fossil fuel companies. We need to send a strong message to the Prime Minister and his ministers.