This comes as the UK Government has announced it will be reviewing its membership of the Energy Charter Treaty.
The Energy Charter Treaty (ECT) is an international agreement between 50 countries that fossil fuel companies are using to sue countries over their climate action. It contains a mechanism called investor-state dispute settlement, or ISDS, which enables companies to sue states in secret courts outside of national legal systems when the company believes its profits could be affected by government policies or parliamentary decisions.
The UK is facing widespread calls to exit the ECT as climate experts, civil society, and even the UK government’s own advisors have highlighted how it has been used to delay vital climate action and trigger mammoth taxpayer-funded payouts to fossil fuel companies. Just last year, a corporate tribunal ordered the Italian government to pay more than £210m to the UK oil company Rockhopper as compensation for an offshore oil drilling ban.
Exiting the treaty
Citing similar risks, eleven countries, including Germany, France, the Netherlands, and Ireland, have decided to exit the treaty, with the European Commission proposing a coordinated EU withdrawal in July.
Research has shown that staying in the ECT places the UK at risk of potential ECT compensation claims totalling $5.3 billion and suggests that the UK could benefit the most from ECT termination.
The polling, carried out by Yonder Consulting and commissioned by UK-based campaigning organisation Global Justice Now, also found:
- Almost three in four (74 percent) of the UK public think it is a problem if the Energy Charter Treaty clashes with government policies, parliamentary decisions, and climate goals.
- Almost 3 in 5 (58 percent) think the Energy Charter Treaty is outdated.
- Only 17 percent think it is okay for private companies to sue the UK government through private international courts rather than British courts.
These findings come as the Energy Bill is set to be debated once more in the House of Commons this week, to which the former chair of the government’s Net Zero Review and Conservative MP Chris Skidmore has tabled an amendment on a UK withdrawal from the ECT.
This puts fresh pressure on the UK government, especially following the European Commission’s recent announcement formally recommending a whole-EU exit from the pact.