A Jersey-based oil-refining company is suing the EU, Germany and Denmark for at least €95m over a windfall tax introduced during the Ukraine war that it sees as a “pretext” for undermining fossil fuel firms, leaked documents show.
Klesch Group Holdings Limited is taking action under a controversial secret court system enabled by the energy charter treaty (ECT), an agreement officials fear will stymie climate action and divert hundreds of billions of euros into the coffers of fossil fuel investors.
The treaty was drafted to protect the interests of energy companies as the Soviet Union broke up in the early 1990s and is being used by companies such as the UK oil firm Rockhopper, which was awarded a £210m payout last year after Italy stopped it from drilling.
In July, Brussels proposed a “coordinated withdrawal” from the pact following domino-style exit announcements by several EU countries including France, Spain and the Netherlands. But the treaty remains in effect for now, and an EU official said there was “no specific timeline” for leaving it.
Speaking in a personal capacity, Tinne van der Straeten, the Belgian energy minister who will chair the EU’s energy council from January for six months, said: “The energy charter treaty strikes again. This newest lawsuit is yet more proof that the ECT is blocking a just and affordable energy transition.
“We need treaties that serve our people and climate, not the fossil fuel industry. I am personally convinced that we should establish a unified stance on a collective and coordinated European withdrawal. It’s time to take the necessary and legally sound steps for the climate. It’s time to walk away from the ECT.”
All the treaty does is say that governments must conform to the contracts they’ve signed. If they don’t then the company gets to sue in a court which is not run by the government being sued.
And that’s it. What the EU wants here is to be able to act with caprice, to be able to just steal whenever.
Cleodie Rickard, the trade campaign manager at Global Justice Now,
GJN has been campaigning aginst this, and the closely related ISDS system, for a couple of decades at least. Justice now meaning, obviously, no justice allowed for capitalists.