France Becomes Latest Country To Leave Controversial Energy Charter Treaty – France is the most recent country to withdraw from the controversial energy charter treaty (ECT), which shields investors in fossil fuels from policy changes that could threaten their profits. On Friday, following an EU summit in Brussels, French President Emmanuel Macron announced France’s withdrawal from the energy charter treaty. He said: “France has decided to withdraw from the energy charter treaty.” Quitting the ECT was “coherent” with the Paris climate deal, he added.
Macron’s statement follows a recent vote by the Polish parliament to withdraw from the 52-nation treaty, as well as announcements by Spain and the Netherlands to withdraw from the scheme. An ally of Macron in Brussels, the French MEP Pascale Canfin, stated earlier on Friday, “We need to exit the energy charter treaty because we end up being sued by multinational companies through private tribunals which prevent us carrying out our climate policies.”
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The European Commission has proposed a modernization of the agreement that would end the treaty’s secret investor-state courts’ jurisdiction over EU members. Next month, this plan is anticipated to be discussed at a meeting in Mongolia. A French government official stated that France would not oppose the modernization plan within the EU or at the Mongolian meeting. “But whatever happens, France is leaving,” the official said.
While France was “willing to coordinate a withdrawal with others, we don’t see that there is a critical mass ready to engage with that in the EU bloc as a whole”, the official added. The French withdrawal from the ECT will take approximately one year to complete, during which time discussions in Paris will likely shift to neutralizing or reducing the duration of a “sunset clause” that allows for retrospective lawsuits. Sources close to the ongoing legal negotiations on this issue believe that progress may be possible.
France Becomes Latest Country To Leave Controversial Energy Charter Treaty – The energy charter treaty was established in 1994 to protect western energy companies operating in ex-Soviet states. It permits investors to sue governments that enact policies that threaten their expected returns. However, critics estimate that the ultimate cost of compensation to fossil fuel companies could exceed one trillion dollars. In August, the British oil company Rockhopper received £210 million in compensation for an Italian ban on offshore drilling. Also withdrawing from the treaty is Italy.
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