A UK gas company, Ascent Resources, has officially begun procedures to start an investor dispute against Slovenia for taking measures to protect its groundwater from fracking, in a case that could see the country paying out tens of millions of euros in damages, under the controversial Energy Charter Treaty.
The case has emerged today, as the second round of talks gets underway from Brussels to renegotiate the Energy Charter Treaty, and as 140 MEPs and MPs criticise the treaty in an open letter. Their statement states the Energy Charter Treaty is “neither consistent with the European Green Deal, nor with the proposed EU climate law” and calls for fundamental reform.
Ascent Resources is expected to demand over 50 million euros from Slovenia in damages. It intended to frack gas out of the Petišovci gas field in eastern Slovenia, but was unable to begin fracking after the Slovenian Environment Agency asked the company to undertake an environmental impact assessment, which is required to obtain an environmental permit. These measures were mandatory due to the location of the planned fracking operations close to critical water sources, posing a health hazard for the local population. Ascent Resources had lobbied the Slovenian Ministry of the Environment to complete the permitting procedures without assessing the environmental impacts, and had pressured the Environment Agency, leading to the resignation of the director and a criminal investigation.
Lidija Živčič, Focus/Friends of the Earth Slovenia, said: “Suing Slovenia for protecting our water and implementing our laws is outrageous. The effects of fracking are so dangerous to the environment and human health that many European countries, including Ireland, France and Bulgaria, have banned it altogether. We call on the Slovenian government not to give into this pressure.”
Both the UK and Slovenia are parties to the Energy Charter Treaty – a controversial treaty which gives investors the right to challenge governments through parallel private courts, or ISDS (investor state dispute settlement) mechanisms. The Energy Charter Treaty gives investors, even climate-wrecking fossil fuel companies, the option to ask for millions of euros of public money in compensation from governments even if states pass or enforce legitimate and much-needed environmental protection laws. The Energy Charter Treaty is being renegotiated to ‘modernise’ it, due to climate concerns.
Paul de Clerck, economic justice coordinator for Friends of the Earth Europe, said: “It’s a scandal that, amid a climate and environmental emergency, a country like Slovenia can be sued for doing the right thing, protecting its water and environment from destructive fracking. Though negotiators are meeting right now to tweak the polluter-protecting Energy Charter Treaty, this case demonstrates the treaty is out of time and the EU and its member states need to step out of it. The treaty has already facilitated attacks on climate policies in countries like Germany and France