Never heard of this International Agreement? No one can blame you – even most European Parliament Ministers haven’t. However, the ECT has far-reaching consequences for us all, and we plan to tell you why.
Have a read below, we promise that what we have to say will blow you away.
“If you wanted to convince the public that international trade agreements are a way to let multinational companies get rich at the expense of ordinary people, this is what you would do: give foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever a government passes a law to, say, discourage smoking, protect the environment, or prevent a nuclear catastrophe”. The above quote was taken from the article The Arbitration Game published in October 2014 by The Economist.
The ECT – the fossil fuel sector’s secret weapon
The ECT is a powerful tool in the hands of big oil, gas, and coal companies to discourage governments from transitioning to clean energy. This International Agreement, signed by 56 countries – including all EU member states except Italy, and also the European Union itself. The ECT allows foreign investors to bring a claim against States before international arbitrators when they take decisions which go against their financial interests. This is how Uniper brought a claim against the Netherlands, reportedly seeking 1bn euros in compensation, simply because the Netherlands decided to phase out coal from its energy mix.
A boon for investments funds, a doom for citizens
Fossil fuel and other polluting companies dominate the list of 16 known ECT lawsuits in which investors demanded US$1 billion or more in damages.
And the worst is yet to come – it is estimated that stranded fossil fuels assets’ compensation asked in the name of the ECT would potentially reach €1.3 trillion by 2050.
This Treaty doesn’t only pose a problem to citizens’ pockets – it also directly threatens our ability to live decent lives in the future.
Shocked? You have seen nothing. In the following articles, you will see plenty more, and why this Dirty Treaty can’t get cleaner.
If you have been passionate about this article and would like to dig deeper in the subject and find more resources, go have a read of our two articles “The ECT, an obstacle to the Energy Transition: how did we get there?” and “The ECT, an obstacle to the Energy Transition: the way forward”
Written by Zaraï De Pelsmacker, Alexandra Aldou and Alix Dardennes
