European Energy Charter 9

European Energy Charter




Where two or more Contracting Parties have entered into a prior international
agreement, or enter into a subsequent international agreement, whose terms in
either case concern the subject matter of Part III or V of this Treaty,

(1) nothing in Part III or V of this Treaty shall be construed to derogate from
any provision of such terms of the other agreement or from any right to dispute
resolution with respect thereto under that agreement; and

(2) nothing in such terms of the other agreement shall be construed to derogate
from any provision of Part III or V of this Treaty or from any right to dispute
resolution with respect thereto under this Treaty, where any such provision is more favourable to the Investor or Investment.



Each Contracting Party reserves the right to deny the advantages of this Part

(1) a legal entity if citizens or nationals of a third state own or control such
entity and if that entity has no substantial business activities in the Area of
the Contracting Party in which it is organized; or

(2) an Investment, if the denying Contracting Party establishes that such
Investment is an Investment of an Investor of a third state with or as to which
the denying Contracting Party:

(a) does not maintain a diplomatic relationship; or

(b) adopts or maintains measures that:

(i) prohibit transactions with Investors of that state; or

(ii) would be violated or circumvented if the benefits of this Part were
accorded to Investors of that state or to their Investments.




(1) The Contracting Parties recognize state sovereignty and sovereign rights
over energy resources. They reaffirm that these must be exercised in accordance
with and subject to the rules of international law.

(2) Without affecting the objectives of promoting access to energy resources,
and exploration and development thereof on a commercial basis, the Treaty shall
in no way prejudice the rules in Contracting Parties governing the system of
property ownership of energy resources.

(3) Each state continues to hold in particular the rights to decide the
geographical areas within its Area to be made available for exploration and
development of its energy resources, the optimalization of their recovery and
the rate at which they may be depleted or otherwise exploited, to specify and
enjoy any taxes, royalties or other financial payments payable by virtue of such
exploration and exploitation, and to regulate the environmental and safety
aspects of such exploration; development and reclamation within its Area, and to
participate in such exploration and exploitation, inter alia, through direct
participation by the government or through state enterprises.

(4) The Contracting Parties undertake to facilitate access to energy resources,
inter alia, by allocating in a non-discriminatory manner on the basis of
published criteria authorizations, licences, concessions and contracts to
prospect and explore for or to exploit or extract energy resources.



(1) In pursuit of sustainable development and taking into account its
obligations under those international agreements concerning the environment to
which it is party, each Contracting Party shall strive to minimize in an
economically efficient manner harmful Environmental Impacts occurring either
within or outside its Area from all operations within the Energy Cycle in its
Area, taking proper account of safety. In doing so each Contracting Party shall
act in a Cost-Effective manner. In its policies and actions each Contracting
Party shall strive to take precautionary measures to prevent or minimize
environmental degradation. The Contracting Parties agree that the polluter in
the Areas of Contracting Parties, should, in principle, bear the cost of
pollution, including transboundary pollution, with due regard to the public
interest and without distorting Investment in the Energy Cycle or international
trade. Contracting Parties shall accordingly:

(a) take account of environmental considerations throughout the formulation
and implementation of their energy policies;

(b) promote market-oriented price formation and a fuller reflection of
environmental costs and benefits throughout the Energy Cycle;

(c) having regard to Article 34(4), encourage cooperation in the attainment
of the environmental objectives of the Charter and cooperation in the field of
international environmental standards for the Energy Cycle, taking into
account differences in adverse effects and abatement costs between Contracting

(d) have particular regard to Improving Energy Efficiency, to developing and
using renewable energy sources, to promoting the use of cleaner fuels and to
employing technologies and technological means that reduce pollution;

(e) promote the collection and sharing among Contracting Parties of
information on environmentally sound and economically efficient energy policies
and Cost-Effective practices and technologies;

(f) promote public awareness of the Environmental Impacts of energy systems,
of the scope for the prevention or abatement of their adverse Environmental
Impacts, and of the costs associated with various prevention or abatement

(g) promote and cooperate in the research, development and application of
energy efficient and environmentally sound technologies, practices and processes
which will minimize harmful Environmental Impacts of all aspects of the Energy
Cycle in an economically efficient manner;

(h) encourage favourable conditions for the transfer and dissemination of
such technologies consistent with the adequate and effective protection of
Intellectual Property rights;

(i) promote the transparent assessment at an early stage and prior to
decision,and subsequent monitoring, of Environmental Impacts of environmentally
significant energy investment projects;

(j) promote international awareness and information exchange on Contracting
Parties’ relevant environmental programmes and standards and on the
implementation of those programmes and standards;

(k) participate, upon request, and within their available resources, in the
development and implementation of appropriate environmental programmes in the
Contracting Parties.

(2) At the request of one or more Contracting Parties, disputes concerning the
application or interpretation of provisions of this Article shall, to the extent
that arrangements for the consideration of such disputes do not exist in other
appropriate international fora, be reviewed by the Charter Conference aiming at
a solution.

(3) For the purposes of this Article:

(a) “Energy Cycle”means the entire energy chain, including activities
related to prospecting for, exploration, production, conversion, storage,
transport, distribution and consumption of the various forms of energy, and the
treatment and disposal of wastes, as well as the decommissioning, cessation or
closure of these activities, minimizing harmful Environmental Impacts;

(b) “Environmental Impact”means any effect caused by a given activity on the
environment, including human health and safety, flora, fauna, soil, air,water, climate, landscape and historical monuments or other physical structures
or the interactions among these factors; it also includes effects on cultural
heritage or socio-economic conditions resulting from alterations to those

(c) “Improving Energy Efficiency” means acting to maintain the same unit of
output (of a good or service) without reducing the quality or performance of the
output, while reducing the amount of energy required to produce that output;

(d) “Cost-Effective”means to achieve a defined objective at the lowest cost
or to achieve the greatest benefit at a given cost.




See Also

References and Further Reading

About the Author/s and Reviewer/s

Author: international


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