RESOLUTION OF INTERNATIONAL ENERGY DISPUTES: PEACE, STABILITY AND SECURITY Opening Remarks of the Secretary-General of the ECS Dear Secretary General Siblesz, thank you for your warm welcoming and for coorganizing this first global dialogue between governments and companies on the resolution of international energy disputes. Your Excellencies, Ladies and Gentlemen, Thank you for joining us today. As mentioned in the flyer of this event, there is a lack of substantive cooperation frameworks across regions to enable the early and effective resolution of energy disputes. Well… hopefully that is not completely true anymore. The International Energy Charter was adopted 2 days ago in The Hague and signed by countries in the five continents in addition to the European Union and ECOWAS. Although it contains no legal obligation, the IEC is expected to facilitate global dialogue on energy issues and to serve as the common basic framework for cooperation to solve energy disputes. In fact, may I mention just two examples: Over the last two days we had sitting at the same table: - Israel, Palestine, Lebanon, Cyprus, Turkey and Iran discussing energy cooperation; - the European Union, Iran and all the P5+1 members except Russia discussing nuclear cooperation. What do we mean by energy disputes? According to UNCTAD and ICSID, around 50% of the new investment arbitration cases are related to energy. But energy disputes are not only investment disputes. They are also related to transit, competition or trade. Last year you surely followed the events in Ukraine. 1 Contrary to what happened in 2006 and 2009, this time there was no disruption of gas flows. Among the several international efforts involved, the Energy Security Contact Group which I set up allowed the parties concerned to exchange information and to work together with the aim of preventing a major interruption of energy flows. As a result of the experience, a Model Energy Charter Early Warning Mechanism was welcomed by the Energy Charter Conference in 2014 as a complementary instrument of preventive energy diplomacy, confidence building and emergency measures that can be used by signatories of the IEC. In addition… the Energy Charter Treaty contains several dispute resolution mechanisms, each one of which was designed to specifically address a particular subject matter or aspect of the Treaty. It is therefore an important global instrument for peace, stability and security. These dispute resolution mechanisms may be divided into two main groups: (i) Dispute resolution between Contracting Parties. If not settled through diplomatic channels within a reasonable time and unless otherwise agreed in writing, can be submitted to an ad hoc arbitral tribunal. Unless otherwise agreed, it shall sit in The Hague and use the premises of the Permanent Court of Arbitration, where we seat today. The only exceptions concern: • Competition disputes: The treaty contains a cooperation mechanism that facilitates consultation regarding allegations of anti-competitive conduct. • Environmental disputes: the Charter Conference shall review and discuss environmental disputes, aiming at reaching an agreement if there are no other appropriate international forums. 2 • Trade and trade-related investment (TRIM) disputes: The WTO-based panel applies only in cases where at least one of the disputing Contracting Parties is not a member of the WTO. • There is an additional conciliation mechanism in relation to disputes over any matter arising from Transit. (ii) Dispute resolution between an investor and a Contracting Party, including the European Union. I will not spend too much time on this point, since you are well aware of it. However, let me stress that the Energy Charter is currently discussing, with the support of an external body of experts: a) how to facilitate the already existing possibility of referring the dispute to conciliation, as well as b) whether the establishment of a network of national investment ombudsmen could help both Contracting Parties and investors to solve problems in a more effective and cheaper way. Finally, I would like to emphasise an additional Alternative Mechanism already provided by the Energy Charter Secretariat: its facilitating role and good offices. As a recognition of such useful practice, the Conclusions of the 2014 Review of the Energy Charter Conference mandated the Secretariat to (i) provide assistance with good offices, mediation and conciliation; as well as to (ii) provide neutral legal advice and assistance in dispute resolution and participate in pre-trial proceedings between Contracting Parties. Dialogue is the first step towards solving problems and the Energy Charter is the global forum for such dialogue in the energy sector. I wish that today’s event will contribute towards a useful dialogue between companies and governments. Thank you for your attention. 3
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