The International Energy Charter: A New Age of Energy Governance?

Patrick LarkinPatrick Larkin is Senior Adviser at the Energy Charter Secretariat. In this guest blog, he looks at the International Energy Charter, and asks whether it will lead to a new age of energy governance.

“The ultimate ambition is that the Energy Charter should achieve its full potential as the premier instrument of global energy cooperation and governance.”

May 20th 2015 was an historic day for international energy cooperation, and for the Energy Charter. After many years of planning, discussion, diplomatic efforts and negotiations, the International Energy Charter was adopted at a Ministerial Conference in The Hague.

International Energy CharterThe International Energy Charter is a political declaration which, like the earlier Energy Charter of 1991, commits those states who have adopted or signed it to the efficient functioning of energy markets, investment protection, free transit of energy resources, promotion of trade in energy and energy related goods, and cooperation in energy policy development, including energy efficiency and environmental protection.

Seventy five countries or international organizations including the European Union, EURATOM and ECOWAS have now signed or adopted the new International Energy Charter. The new signatories include China and countries from Africa, Asia, and the Americas. The Russian Federation, which had signed the earlier Energy Charter and provisionally applied the subsequent Energy Charter Treaty of 1994, did not participate in The Hague. However, the International Energy Charter remains open for signature by Russia, and by any country willing to share the principles of global energy cooperation and governance. The ultimate ambition is that the Energy Charter should achieve its full potential as the premier instrument of global energy cooperation and governance.

Energy Charter Sec logoThe adoption of the International Energy Charter represents the first major political development since the Treaty itself was signed in 1994. The new Charter is also an indication of the maturity and self-confidence of the Energy Charter Conference process, after 25 years of existence.

As the Charter now enters into its second phase of modernisation, it is important that existing national signatories and energy actors who have long experience of working with, and operating under the Energy Charter come forward with their concrete suggestions to participate in improving the effectiveness of the Treaty. A number of issues need to be addressed, including concerns about the transparency of the dispute resolution mechanisms under the Treaty.

Those countries who have for the first time engaged with the Energy Charter process by signing the new International Energy Charter have thereby achieved observer status within the Energy Charter Conference. The May meeting in The Hague was an impressive testament to the level of engagement with the Energy Charter Process from countries across Africa, Asia, and the Americas. Their input, requirements and aspirations will bring vital new perspectives and new thinking to the Energy Charter Process. The new observers will accordingly take part in future  discussions on shaping global energy governance, while countries including Serbia, Jordan, Chad, Mauritania, Morocco and Niger indicated their intention to accede to the Treaty, and have  begun the process of achieving this goal.

To summarise the significance of the adoption of the International Energy Charter:

The Energy Charter has now concluded the first phase of its modernisation by the adoption of the International Energy Charter. The greater geographical reach of the new Charter will strengthen the Process. Further, the Process itself is marked by its inclusive nature, its non-discriminatory commitment, rendering it open and available to any country willing to share the principles of balanced, contemporary, equitable global energy governance.

The second phase of the Energy Charter’s modernisation will however be more demanding, more challenging, more complicated, and more complex. Wanting to capitalise on the momentum of cooperation and advancement that marked the May meeting in The Hague, this next phase is being embarked upon immediately. As such, the Secretary General of the Brussels-based Energy Charter Secretariat, Dr Urban Rusnák, has expressed the view that the issues for immediate attention should include:

  • Improving the procedures of the Energy Charter Process in order to render them more effective overall.
  • Developing and improving the transparency of all aspects of the Energy Charter, with a particular focus on the area of dispute settlement resolution.
  • An improved focus on the alleviation of energy poverty, through the transfer of knowledge and technology.

The principles regarding security of supply, security of demand, security of transit, and not least the alleviation of energy poverty adopted on 20th May at The Hague must now be implemented. The hope is that the political will which has successfully brought about the adoption of the International Energy Charter of 2015, will continue to ensure that the process itself not only continues, but constructively establishes a system of global energy governance. Many more steps are of course required, including the development of common rules for global energy security. But these rules, and all their attendant structures and inherent stability, can and should be developed, based on the principles set out in the International Energy Charter. Those principles represent a 21st century world, and the building blocks for a truly global energy constituency. This must be the next chapter of the Energy Charter.


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