Investing in modern technologies for a green transition. It sounds logical to aim for that, doesn’t it? But let me tell you something: at the moment, energy companies investing in fossil fuels can sue our country because our strategic orientations are harming their profits. It defies logic, does it not?
Let’s start at the beginning. ECT is the acronym for the Energy Charter Treaty. It sounds great because we are stronger together and we like to work with others on the international stage. Energy is something we all need – both in our private lives and for our economy. Everything would be ‘fine’ if this treaty did not allow foreign companies’ investments in the fossil fuel industry to be protected against loss of profits. Not only are current investments insured … any hypothetical loss of profits for several years in advance, some for as long as two decades, are also insured. Profits that have not yet been made and might never be made. Profits that are themselves a result of robbing nature. Profits that will not encourage a greener direction.
What is most absurd about this treaty is that any dispute between companies and the state under this treaty is settled by bypassing the courts – both Slovenian and international – through private arbitration tribunals. Out of sight. Ignoring the Constitution. Ignoring the protection of citizens’ interests.
To give you an example: the British company Ascent Resources is suing Slovenia, claiming that Slovenia’s legislative changes have harmed their investment in an estimated amount of half a billion euros. Half a billion. Five hundred million. The dispute began when the Slovenian Environment Agency (ARSO) requested an environmental impact assessment for gas extraction in Petišovci, and the company estimated that this would probably harm their profits. Probably. It beggars belief!
I therefore warmly welcome the announcement by the Minister of Infrastructure, Bojan Kumer, that Slovenia intends to withdraw from the Treaty. The ECT is an obstacle to the green transition and runs contrary to both the strategic commitments of the Paris Agreement and the EU’s climate policy. It has long ceased to serve its purpose and is only being used by huge companies that feel that they ‘are being wronged’. Is it wrong that, in the long term, we want to move towards non-polluting technology? Is it wrong that we want to encourage development and financial investment in the green transition? In both cases, the answer is, of course, negative.
There have also been attempts to fundamentally change the treaty. European countries have tried in vain to introduce sensible changes to the treaty and make it fit for the for climate-change-related insights. Well, it seems that others are not aware of the consequences resulting from treaties such as this one. We have pointed them out and tried to change things for the better. It all fell on deaf ears – and so we withdraw. Italy, the Netherlands, Poland, France have done it before us, and Belgium is steering in this direction as well. Now it is Slovenia’s turn.
Businesses need to start recognising that their only objective should not be to generate pure profit, but also to work for the well-being of people, society, the environment and the planet. Profit does not translate only into money. It also translates into one’s legacy – technological, economic and environmental. It is the latter that we keep forgetting.
Just as the disputes under this treaty have been resolved behind our backs, it is now time for us to turn our back on this treaty.
So long, ECT!