Urban Rusnák

Transcription

The following module addresses international energy governance, and in particular the Energy Charter process. You know the energy charter remains the most overarching multilateral mechanism for energy governance. Some people mistakenly or misleadingly consider the energy charger to be either a European Union system or an EU-Russian relations system. And in both cases it is not entirely correct, when you look at the Energy Charter text it clearly aims at International governance in various fields of energy, which we will overview now. The Energy Charter process started in the 1990's. It was actually initiated by the Dutch presidency of the European Community in 1990 and it was actually part of the generally positive context of the Charter of Paris and the Declarations of Bonn which also occurred in 1990. Subsequently in 1991 the Energy Charter Declaration was concluded but which was simply a declaration; a political will to cooperate. And it entailed new negotiations of actually a legally binding treaty and a legally binding treaty was concluded in 1994. In 1994 institutions of the Energy Charter were also established among other Energy Charter conference and energy charter Secretariat. From 1994 there is a process of Energy Charter which includes additional protocols and agreements which serve to improve the energy charter or that explain it. From 2009 there are a number of issues related to Russia's position on the Energy Charter and to the new roadmap which is now on the table at the Energy Charter conference. Governance of the Energy Charter if you look at the treaty text, and related documents, includes four different charters. The first is trade which emphasizes most of all, non-discrimination in energy trade, most favourable nation, and a number of very similar concepts to what we see in the World Trade Organization. And moreover the Energy Charter conference adopted a trade amendment in order to synchronize the Energy Charter process with the WTO. The second chapter is investment. A general and broader definition of investment which is extremely important in light of the investment protection because, for example, if a company gets a license to explore oil and gas it can be equivalent to an investment and the Energy Charter recognizes such an allocation of a license as an investment. The most favourable nation clause in investment forbidding all ill legitimate expropriation, it is also misleading to consider that the Energy Charter forbids expropriations, no it does not, but an expropriations should not be discriminatory and it has to accompany a fair compensation for the investment. A third chapter is transit. Transit which addresses the issues of facilitating the access to the pipelines and also facilitating the rights to build new pipelines. And then finally we see a protocol, the energy efficiency protocol, in the period document para documa. And you can quickly see that the first three chapters trade, investment, and transit are legally binding, and the forth one, energy efficiency is not. One of the reasons is that trade, investment and transit are also backed by dispute settlement mechanisms. Whereas the energy efficiency is not. However, quite interestingly energy efficiency is recognized as one of the sources of energy. Think a little bit, if a country saves energy it means that part of the energy is liberate. As an example, Russia which is one of the most energy intensive countries in the world, has an energy efficiency potential of about 400 tons of oil equivalent which is more or less Germany's annual energy consumption. So who signed up to the Energy Charter? Although the energy charter is a text which aims at a global regime, global governance, the number of countries who have signed the energy charter is limited to 54. And you see that, in the green colour, the contracting parties which actually signed the agreement in 1994 and in blue are observers, so those that either withdrew from negotiations on the Energy Charter treaty like the United States and Canada, or who never acceded to the treaty. The Energy Charter process has to be viewed somehow in light of the EU Russian relations in general, because as you can mainly see in the last map, the most significant actors in the energy charter process up to now are the European Union and Russia. But the Energy Charter appeared in the context of a deep political and economic crisis in the former Soviet Union, including Russia, and in 1994 Russia was in a weaker position to negotiate the Energy Charter process. And somehow the Energy Charter process was under estimated, on the contrary the early 90s is the process of the political integration of the European Union, which also generated further the creation of an energy policy. But note that before 1996 and 1998 the European Union didn't have an energy policy as such. So with Russia's re-assertiveness in the energy markets in the early 2000s, we see also a certain politicization of relations between Russia and other countries and in particular the former Soviet Union but there is also a politicization of energy at the European level because there is the creation of an internal energy market. At the end of the day we see that Russia decided to slow down its involvement in the Energy Charter and I will explain it a little bit later. Whereas the European Union progressively moved to the internal energy market and preferred actually, to export its legal and regulatory model via the Energy Community treaty instead of relying on the Energy Charter. And somehow the Energy Charter becomes a little problem for the European Union. So the process of energy securitization in EU-Russian relations, especially in the early 2000's, led to a weakening of the multilateral process. But it is not the weakness of the process itself. A few words on Russia's specific position. Russia signed the treaty in 1994 but applied the treaty provisionally, it means that the treaty applies as long as it does not contradict the Russian constitution or legislation. Russia participated in the negotiations of the transit protocol, which has actually never been concluded, it is still a draft document. And actually is seen as a necessity to ensure stability of the gas supply chain and considering that some of the provisions of the Energy Charter and especially some of the positions of The European Union regarding the internal energy market, could generate a supply capacity mismatch, which we have mentioned on a previous occasion. So following the crisis with Ukraine, Russia sent a note to a depository of the treaty, declaring that it stops the provisional application of the Energy Charter. It means that Russia does not ratified the treaty but Russia is still a signatory party, somehow a contracting party, and the question will arise about to what level Russia is bound for its period of provisional application, which lasted from 1994 to 2009. Interestingly, Russia proposed an alternative document which is called the Draft Convention on Energy Security, and proposed it at the UN level in 2010. However the Energy Charter Secretariat was the only organization which took into account this document and most probably this document will become part of the Energy Charter process. I would draw your attention to the view of the former Deputy Secretary-General of the Energy Charter about the process.