ndCog n rı PerspectNı in the actual operational stage, four intergovernmental Working Groups are currently established under the umbrella of the Energy Charter, on lnvestment, Trade, Transit and Energy Efficiency. They report to the Energy Charter Conference. 2. Pillars of the Treaty The Treaty provides a legal framework for an investment climate within which companies can invest, operate and trade in the energy sector throughout all signatory countries. The most significant Treaty provisions are based on the following pillars of the Treaty: Investınent Protection and Promotion The investment-related provisions in the Treaty concentrate on investments, which have already been made. They go well beyond the provisions contained in traditional bilateral investment agreements and international rules, including those of OECD. Trade in general terms, for trade in energy, the Treaty will have the effect of treating those Contracting Parties, which are not members of the World Trade 0rganisation as if they were party to the General Agreement on Tariffs and Trade (GATT). in December 1997, it was agreed to incorporate the results of the Uruguay Round into the Treaty through an amendment, updating the "GATT" principles to the "WT0". Transit Transit provisions develop the non-discrimination principle in article V of the GATT, which was negotiated before there were any major international pipelines or electricity transmission grids. The Energy Charter Treaty is the first of its kind to set specific rules on 'grid bound' commodities at such a wide multilateral level. The transit provisions of the Treaty provide for a balance between the sovereign interests of States and the need for security and stability in international trade. They address the vital interests both of the exporting and transit countries. tion of obligations: The Treaty requires governments: Not to impede the establishment of new capacity if transit in existing capacity cannot be achieved on commercial terms; and Not to interrupt a transit in the event of a transit dispute until after a process of conciliation which will allow sixteen months to seek an amicable solution.. in addition to the Treaty itself, a special Transit Protocol is currently under negotiations. Dispute Settleınent The Treaty contains several sets 0bligations between investors, operators or companies and governments; 0bligations between governments; and 0bligations between governments and the Energy Charter Conference. lmportant is that the Treaty explicitly assigns rights to investors (companies), not party to the Treaty, as third-party beneficiaries. A company, which believes that it is not treated in accordance with Treaty provisions by the host government, is free to take that government to binding international arbitration. 0bligations between States are also enforceable. Any company can therefore alternatively ask its parent government to make a claim on its behalf. At the request of either party disputes between States go to a tribunal operating under the UNCITRAL rules. lnternational arbitration is provided for disputes over ali provisions (except those on competition and environment). Disputes over existing Transit can be resolved under an innovative and rapid dispute settlement procedure, to be executed by the Secretariat of the Treaty. Trade disputes will be laken either in GATT/WT0 (if both parties are members) or under a panel procedure provided for the Treaty, modelled on that of the Uruguay Round. Energy Effıcieııcy and Environmeııt The Treaty (Art 19) requires that each Contracting Party strives to minimise, in an economically efficient manner, harmful environmental impacts coming from ali operations within the energy cycle in its area. Therefore, basic principles with a strong influence on energy efficient behaviour in an economy, such as regarding price formation, liberal trading relations, public awareness and international co-operation, are already anchored within the Treaty. The Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) goes further with its provisions. The key provisions of the ECT and PEEREA relevant to the discussion on Cogeneration and District Heating are those regarding lnvestment Protection and Energy Efficiency. ECOGENERATION WORLO L2L
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