Energy Charter Treaty
Christina Rees Excerpts(1 year, 9 months ago)
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Chris Skidmore
Absolutely. The other risk, which I will come on to in a moment, is the chilling effect. We do not know, or are unable to quantify, the investments that could be coming to the UK but for the fear that the energy charter treaty will again place its dead hand on those investments. Withdrawal from the energy charter treaty provides the certainty, clarity, continuity and consistency—the four Cs—that the net zero review outlined as part of a mission-based approach to long-term certainty. We cannot have long-term certainty for investment in future renewable projects or take decisions potentially shutting our fossil fuel investments unless the energy charter treaty is removed. It is critical that we provide that future certainty if we want those additional investments and the opportunities offered by that inward wall of capital that is waiting to be spent. As the hon. Lady mentioned, an oil company winning £210 million from the Italian Government over their restriction on offshore oil drilling is a perfect example of the risk to which this outdated treaty now exposes the UK. She mentioned that the company won six times the amount it had ever spent on the project, and those winnings are now likely to be fed back into financing new oil exploration.
Most worrying are the continued binds that the energy charter treaty places on signatory countries to prioritise and protect private foreign investments ahead of the democratic rights of elected Governments. Through investor-state dispute settlements, Governments who wish to do the right thing by the citizens who elected them and to tackle climate change to meet their net zero commitments are having their hands shackled by the energy charter treaty, imprisoning what should be free nations and leaving them bound by undemocratic regulations that are fought over by fossil fuel lawyers in courts. At a time when the UK should be taking back its sovereignty, and when it is seeking to demonstrate its energy sovereignty, the energy charter treaty, with its use of these unacceptable ISDSs, should be a prime example of legislation that we must recognise as being at the top of any lists of Brexit freedoms. Surely the UK Government should, can and must take action now to restore our energy freedoms.
Christina Rees (Neath) (Ind)
If the UK follows the International Energy Agency’s recommendation and cancels oil and gas projects, it could face legal claims under the ECT of up to £9.4 billion. The most recent Intergovernmental Panel on Climate Change report warns of the risk of regulatory chill—which the right hon. Member has mentioned—causing the UK to delay or to decide against climate action for fear of being sued by large fossil fuel companies using the ISDS mechanism.
Chris Skidmore
The hon. Lady is absolutely right. Far more impressive legal minds than mine—who have been working at ClientEarth, Global Justice Now and Green Alliance—have demonstrated that there is a way for us out of this treaty and that we can, potentially, work with our European partners to create an exemption regime for some of the historic investment cases in relation to which we might be under treaty obligations.