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Spotlight On: Beijing hosts Energy Charter Industry Advisory Panel

August 20, 2015

China National Petroleum Corporation (CNCP) hosted the meeting of the Energy Charter Industry Advisory Panel (IAP) on 21 July 2015 in Beijing, further to China’s signature of the International Energy Charter in The Hague last May 2015.

Participants included representatives of IAP members as well as the representatives of invited companies such as China National Offshore Corporation, DNG VL, International Green Economy Association, Petrobras, and Vestas Wind.

The meeting in Beijing was to discuss energy investments and transit in the 'One Belt One Road' initiative in the light of the Energy Charter Treaty.  The One Belt One Road initiaive is a development strategy and framework, proposed by People's Republic of China that focuses on connectivity and cooperation among countries primarily in Eurasia, and consists of two main components, the land-based "Silk Road Economic Belt" (SREB) and oceangoing "Maritime Silk Road" (MSR).

The strategy underlines China's push to take a bigger role in global affairs, and its need to export China's production capacity in areas of overproduction such as steel manufacturing. Iniatives of this kind are instrumental in bringing China into the global energy community and this partnership represents a decisive step towards the globalisation of the energy trade.

The European Energy Charter constitutes the so far most ambitious project to set up an international investment (plus trade) regime. Different from previous attempts … it has succeeded in achieving the status of a legally binding multilateral convention…. The Energy Charter Treaty followed the non-binding 1991 European Energy Charter. It was originally meant by the Western countries to be a multilateral version of the by now familiar bilateral investment treaties (BITs), mainly to protect Western foreign investment in the volatile, but very strategic CIS oil & gas industries. The quid pro quo … [for] protection of Western investment (BIT-style) … [was] access of Eastern energy trade to Western markets (GATT-style). As a consequence of bargaining dynamics, it has now become as well a multilateral treaty affecting West-West (and East/East) investment. In consequence, it is not only influenced by BIT-type obligations and procedures, but also characterised by a diluted version of Western (mainly European, but also NAFTA [style]) economic integration law.

Extract from III The Modern System of Investor-State Arbitration by Christopher F. Dugan, Don Wallace, Jr., Noah Rubins, Borzu Sabahi from Investor-State Arbitration.

For more information on the Energy Charter Treaty, read this free chapter E. Testing the Energy Charter Treaty Part II, 7 Central Europe and the CIS from International Energy Investment Law by Peter D. Cameron.