Busting the myths around the Energy Charter Treaty

A guide for concerned citizens, activists, journalists and policymakers

Amidst growing concerns that the Energy Charter Treaty (ECT) undermines urgent climate action, and a growing backlash against the treaty, its profiteers are spewing propaganda, promoting falsehoods about how the ECT attracts clean investment and how its ‘modernisation’ will fix any flaws. Cut through their rhetoric with our new myth-busting guide.

Opposition to the ECT is growing rapidly. In October 2020, the European Parliament voted to end the ECT’s protection for fossil fuels. In November, 280 parliamentarians called on the European Commission and EU members to “explore pathways to jointly withdraw”. In December, over 200 climate leaders and scientists echoed that demand calling the ECT “a major obstacle” to the clean energy transition. Behind the scenes in the Council, EU member states like France, Spain, and Luxembourg, too, have raised the withdrawal option if the ECT cannot conform to the Paris Climate Agreement. Belgium has even asked the European Court of Justice if the ECT is at all in line with EU law.

But powerful interests are gearing up to defend the treaty – and even expand it to new signatory states, particularly in Africa, Asia and Latin America. These interests include the fossil fuels lobby, which is keen to keep its powerful legal privileges; lawyers, who make millions arguing ECT cases; the ECT Secretariat, which has close ties to both industries and whose survival depends on continuation of the treaty – and the list goes on.

This guide aims to help activists, concerned citizens, journalists and policymakers confront pro-ECT propaganda. It identifies the ECT’s defenders and their arguments, and offers deeply researched counter-evidence to the following claims:

Claim 1: The ECT increases foreign investment

Claim 2: The ECT promotes the rule of law

Claim 3: The ECT is the only way to protect energy investors abroad, particularly in countries with weak judicial systems

Claim 4: States win the majority of ECT cases

Claim 5: Investors win much less money than they claim

Claim 6: The ECT is most often used by small and medium-sized enterprises (SMEs)

Claim 7: Thanks to the ECT more capital will flow into clean energy

Claim 8: The ECT does not favour fossil fuels – it protects all types of energy equally

Claim 9: The ECT protects the climate by holding governments accountable to their commitments on renewable energy

Claim 10: Many renewable energy investors have been harmed in Spain – and elsewhere – and the ECT is the only way for them to get justice

Claim 11: Modernisation will bring the ECT in line with climate goals

Claim 12: Integrating states’ ‘right to regulate’ in the ECT will shield public policies from investor lawsuits

Claim 13: The modernisation will bring the ECT in line with EU investment policy

Claim 14: Leaving the ECT is not an option as any country that leaves risks being sued for more years – so it’s better to engage

Claim 15: We cannot abandon the ECT because we need to uphold multilateralism

Claim 16: The ECT brings access to modern energy services and reduces energy poverty

Claim 17: Joining the ECT allows countries to have a say on global energy issues

Claim 18: It is presumptuous for NGOs to tell countries that they shouldn’t join the ECT

Source: https://www.tni.org/en/ect-mythbuster