As has been recently demonstrated by the ‘Panama Papers’ and ‘Bahamas Leaks’ scandals, corruption is rife in our societies. Quoting Kofi Annan’s opening statement to the United Nations Convention against Corruption of 2004: ‘It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish’. The origins of this social plague may be traced back to the outset of human civilization. However, it appears that this kind of unethical behavior is particularly rampant in the energy sector. This chapter will introduce the topic of corruption and analyze the reasons behind the fact that, almost unexpectedly, over the course of the last two decades corruption has gradually moved from the margins to the center of the international political stage. Then, the chapter will try to explain why, in the energy sector, such a criminal phenomenon has traditionally been wildly rampant, with extremely dramatic effects. Finally, the chapter will offer a vivid depiction of a recent tale of dishonesty, which is emblematic of the way in which corrupt practices are commonly perpetrated within the energy industry.
This chapter offers a commentary to Article 23 of the Energy Charter Treaty, which establishes a criterion of attribution of liability in relation to the commercial operations carried out by regional or sub-regional authorities. Especially, it explains that the Member States have to ensure that all their sub-national authorities act in accordance with the treaty and how such a duty implies that, where a regional or local authority violates the rules set out by the treaty, the Member State that exerts control over it shall be deemed responsible for those activities. The chapter then illustrates the difficulties faced by the Contracting Parties in regulating this matter due to the impossibility of relying on the various domestic constitutional and administrative sources of law. The author also highlights the complexity concerning the establishment of a conventional definition of terms like ‘region’ and ‘territory,’ which bear a variety of meanings in the different historical traditions of the Member States. In that regard, the chapter illustrates the Nomenclature of Territorial Units for Statistics (NUTS) system used by the European Commission, which represents a heterogeneous aggregation of national administrative units.
Costantino Grasso and Tina Hunter
This chapter offers a commentary to Article 22 of the Energy Charter Treaty, which addresses the vexed question of the presence of state-owned and privileged enterprises in commercial operations. The chapter begins with a historical background of the dominant role played by state-owned and privileged enterprises in the energy sector. It also identifies the emerging geopolitical pattern related to the use of such type of corporations. The author deals with the theoretical and practical difficulties experienced at the international level due to the absence of a universally accepted definition of state-owned enterprises, analysing the most relevant case law such as the landmark decisions Emilio Agust'n Maffezini v. The Kingdom of Spain and Salini v. Morocco. Finally, the chapter analyses the relevant International and European legal framework in the light of the provision of Article 22, which aims at preventing a state from invoking domestic law as a defense against the violation of an international obligation in relation to contracts or other acts undertaken by state entities.
Costantino Grasso and Gloria Alvarez
This chapter illustrates a series of exceptions provided by Article 24 of the Energy Charter Treaty, which have been inspired by the exceptions from trade rules that are contained in the General Agreement on Tariffs and Trade framework (GATT) of 1994. Such exceptions give the Contracting Parties the possibility of derogating from treaty rules for various reasons. The chapter offers a critical analysis of such exceptions focusing on issues like the acquisition or distribution of energy materials and products in conditions of short supply arising from exceptional causes; the possibility of establishing privileges for investors who are aboriginal people or socially or economically disadvantaged individuals; the possibility of establishing or joining free-trade areas or customs unions, the protection of essential security interests; the implementation of national policies related to the non-proliferation of nuclear weapons; and the maintenance of domestic law and order.
Costantino Grasso and Gloria Alvarez
This chapter offers a commentary to Article 25 of the Energy Charter Treaty, which sets out rules to be applied where a Contracting Party is also party to an Economic Integration Agreement (EIA). The chapter deals with the difficulties of defining and regulating this kind of international legal instruments, whose scope may vary significantly and that may be established at the multilateral, regional, interregional, plurilateral or bilateral level. It then explains how Article 25 provides a general exception establishing that the provisions of the treaty cannot be interpreted in a way to oblige a Contracting Party, which is also party to an EIA, to extend, by means of most-favoured-nation treatment, to another Contracting Party which is not a party to that EIA, any preferential treatment applicable between the parties to that agreement.