Energy Charter Treaty - History

History

The beginnings of the Energy Charter date back to a political initiative launched in Europe in the early 1990s. The time at end of the Cold War offered an unprecedented opportunity to overcome previous economic divisions between the nations on both sides of the Iron Curtain. The clearest prospect for mutually co-dependent beneficial cooperation was the energy sector, given Europe’s growing energy demand and vast resource availability in post-Soviet nations. Additionally there was a recognised need to ensure that a commonly accepted foundation was established for developing energy cooperation among the states of Eurasia. On the basis of these considerations, the Energy Charter process was born.

The original Energy Charter declaration was signed in The Hague on 17 December 1991. It was a political declaration of principles for international energy including trade, transit and investment, together with the intention to negotiate a legally-binding treaty, setting the beginning of the development of the Energy Charter Treaty. A Secretariat was set up to accommodate the dialogue amongst the contracting parties, which later transformed into the Energy Charter Secretariat, mandated by the Energy Charter Conference. The legally-binding treaty was signed in Lisbon in December 1994, together with a Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA). The treaty and the protocol came into effect in April 1998. An amendment to the trade-related provisions reflecting the change from the General Agreement on Tariffs and Trade to World Trade Organization processes was also agreed at that time.

In December 2007, the Energy Charter Conference reaffirmed its support for the finalisation of negotiations and adoption of the Energy Charter Protocol on Transit in order to expand the existing provisions of the treaty. In this context, the conference resolved to ask the Energy Charter Group on Trade and Transit to return to multilateral consultations on the draft Transit Protocol during 2008, with a report back to the Conference on the outcome of these consultations at the end of 2008. In October 2011, the European Union presented a new common position with regard to the negotiations on the draft Transit Protocol. It argued that in view of the developments in the international energy situation, the developments in the Energy Charter constituency and, most notably, the lack of progress in the negotiations and consultations on the Transit protocol in recent years, it appeared no longer opportune to continue the negotiations on a Transit Protocol on the current basis. Taking into account the position of the EU, the Charter Conference decided on 29 November 2011 to repeal the negotiation mandate of 2009.

On 22 March 2010, a Strategy Group was established within the Energy Charter Conference, with a mandate to promote modernisation. While the origin of the Energy Charter Treaty is rooted in Russia-EU relations, the treaty is the only multilateral legal framework of its kind and is expanding beyond its original purposes.