International legal treaties
Chapter 2 - Society
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Welcome to the International legal treaties page
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In my younger years, I was a sailor. A crucial factor in any sea voyage is the current. If you're sailing west at 4 knots, but the current is moving east at 5 knots, you're heading east against your will. Moreover, you have to be aware of the current changes in tides and geological conditions (for example, open sea versus a passage between islands). This image serves as a (physical) metaphor for the (cultural/legal) foundations of the world we live in.
- We go where the world goes.
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General environmental
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| Obligations of States in respect of Climate Change |
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| 23 July 2025 - Obligations of States in respect of Climate Change - The Court gives its Advisory Opinion and responds to the questions posed by the General Assembly |
| https://www.icj-cij.org/case/187 |
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| Center for International Environmental Law (CIEL) |
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| The power of law to protect the environment, promote human rights, and ensure a just and sustainable society. |
| https://www.ciel.org/ |
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International Investments
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Investor-State Dispute Settlement (ISDS)
Investor-State Dispute Settlement (ISDS) is a legal mechanism allowing an investor from one contracting state to an international investment agreement to bring a claim against another contracting state in which it has made an investment (also known as the host state), because relying on the national courts of the host country to enforce obligations in an investment agreement is not always easy, may be time-consuming or may even be impossible. ISDS was created to reduce the political risks related to rapidly increasing foreign investment, and make the commitments made by host states in investment treaties more easily enforceable.
The EU itself (through the Energy Charter Treaty), as well its Member States are party to around 1 400 agreements which provide for ISDS.
The legal bases for ISDS cases are found in more than 3 000 international investment agreements (IIA) concluded between parties to determine investors rights' in each others' territories. The vast majority of Bilateral Investment Agreements (BIT), and some plurilateral ones (including the Energy Charter Treaty), contain clauses providing for consent for arbitration in case of a dispute between host state and investor. Sometimes they also include alternative mechanisms, such as proceedings before domestic courts of the host state, or another procedure agreed by both parties to a dispute.
Unlike environmental treaties, trade and investment agreements have teeth. They are enforceable through the Investor-State Dispute Settlement (ISDS). ISDS allows foreign investors to bypass local courts and bring claims for monetary compensation to a panel of three arbitrators. (More than 1,200 ISDS cases have been launched against governments around the world in the period 2000 - 2025).
Key insights
- Oil and gas investors protected by investment treaties can claim compensation for ‘lost future profits’ in investor-state dispute settlement (ISDS) when governments impose limits on production (supply-side climate policy).
- ISDS claims could absorb a significant amount of public finance that is needed for climate mitigation and adaptation, particularly in the Global South.
- The Energy Charter Treaty (ECT) protects more upstream oil and gas assets than any other single treaty and is already being used to challenge climate action; recent efforts to modernize the treaty are insufficient.
- To limit the risk of ISDS claims, states should stop issuing permits for new oil and gas projects, terminate investment treaties and develop rules to cap the amount of compensation that can be awarded to investors.
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Energy Charter Treaty (Mainly fossil fuels)
| International Energy Charter |
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| https://www.energycharter.org/ |
| https://www.energycharter.org/process/energy-charter-treaty-1994/energy-charter-treaty/ |
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Signatories of the International Energy Charter (2015)
Afghanistan, Albania, Armenia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium, Benin, Bosnia and Herzegovina, Bulgaria, Burkina Faso, Burundi, Cambodia, Chad, Chile, China, Colombia, Croatia, Cyprus, Czech Republic, Denmark, East African Community (EAC), Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), Estonia, European Union and Euratom, Finland, France, G5 Sahel, The Gambia, Georgia, Germany, Greece, Guatemala, Guyana, Hungary, Iran, Iraq, Ireland, Italy, Japan, Jordan, Kazakhstan, Kenya, Republic of Korea, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Mali, Malta, Mauritania, Moldova, Mongolia, Montenegro, Morocco, The Netherlands, Niger, Nigeria, North Macedonia, Norway, Pakistan, Palestine, Panama, Poland, Portugal, Romania, Rwanda, Serbia, Senegal, Sierra Leone, Slovakia, Slovenia, Spain, Swaziland, Sweden, Switzerland, Tanzania, Türkiye, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Yemen
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The International Energy Charter (and more specifically its binding instrument, the Energy Charter Treaty – ECT) has historically provided strong protections for fossil fuel investments through several mechanisms that critics argue hinder climate action. Here’s how it works:
1. Broad Investment Protection for Fossil Fuels
- The ECT was designed in 1994 to promote cross-border energy investments and trade. It guarantees “fair and equitable treatment” and protection against expropriation for energy investors, including those in oil, gas, and coal.
- This means governments that introduce climate policies—such as banning coal plants or phasing out oil and gas—can be sued for billions in compensation by foreign investors claiming their profits were harmed.
2. Investor-State Dispute Settlement (ISDS)
- The treaty includes an ISDS mechanism, allowing companies to bypass national courts and sue states in international arbitration.
- Fossil fuel firms have used ISDS extensively to challenge climate measures. Awards average $600 million per case, and global climate action could trigger claims worth $340 billion from oil and gas investors alone. [iisd.org], [bu.edu]
- Example: Spain faced over 45 disputes under the ECT and paid more than €800 million in claims, some linked to energy transition policies.
3. The “Sunset Clause”
- Even if a country withdraws from the ECT, the sunset clause keeps protections in place for 20 years after exit. This locks governments into obligations long after they decide to leave, creating a chilling effect on climate legislation.
4. Delayed Phase-Out of Fossil Fuel Protections
- Recent reforms (approved in late 2024) aim to phase out fossil fuel investment protection in the EU, UK, and Switzerland, but:
- Existing fossil fuel projects in these regions still enjoy protection for up to 10 more years, and indefinitely in many non-EU countries. [ciel.org]
- The treaty continues to cover oil and gas assets in other member states, making it a global shield for fossil fuel investors.
The Energy Charter Treaty has acted as a legal shield for fossil fuel companies by:
- Guaranteeing investment protection,
- Enabling costly ISDS claims against climate policies,
- Extending these protections for decades through the sunset clause.
Although reforms are underway, critics argue they are too slow and still allow fossil fuel investors to challenge climate action globally.
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Criticism and Withdrawals
- The ECT is widely criticized as “incompatible with the Paris Agreement” and the EU Green Deal because it discourages governments from taking bold climate action.
- The EU, UK, and several member states (France, Germany, Spain, Netherlands) have announced withdrawals, citing its role as a “safeguard for the fossil fuel industry.”
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| Valuation of Compensation in Fossil Fuel Phase-Out Disputes |
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| Hailes, Oliver, Valuation of Compensation in Fossil Fuel Phase-Out Disputes (December 8, 2023). LSE Legal Studies Working Paper No. 23/2023 |
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4658851 |
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| Rethinking the ‘Full Reparation’ standard in energy investment arbitration: how to take climate change into account |
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| Y. Zheng - Journal of International Economic Law, Volume 27, Issue 3, September 2024 |
| https://academic.oup.com/jiel/article/27/3/500/7753536 |
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Bilateral agreements
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| Energy Bilaterals |
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| This website publishes an original collection of bilateral state agreements regulating activities in the field of energy. The database contains over 600 bilateral agreements from the 1940s to the present day. |
| https://energybilaterals.org/ |
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| UNctad |
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| International Investment Agreements Navigator |
| https://investmentpolicy.unctad.org/international-investment-agreements |
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| World Bank |
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| The Global Preferential Trade Agreements Database (GPTAD) provides information on preferential trade agreements (PTAs) around the world, including agreements that have not been notified to the World Trade Organization (WTO). It is designed to help trade policy makers, scholars, and business operators better understand and navigate the world of PTAs. |
| https://wits.worldbank.org/gptad/trade_database.html |
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Sustainability agreements
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ACCTS
Agreement on Climate Change, Trade and Sustainability Switzerland, together with Costa Rica, Iceland and New Zealand, signed the Agreement on Climate Change, Trade and Sustainability (ACCTS) on 15 November 2024. ACCTS is an innovative, open plurilateral agreement. It contains legally binding trade disciplines to achieve environmental policy objectives.
| Source |
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| https://www.seco.admin.ch/seco/en/home/Aussenwirtschaftspolitik_Wirtschaftliche_Zusammenarbeit/internationale_organisationen/WTO/ACCTS.html |
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IIA
Trends in the Investment Treaty Regime and a Reform Toolbox for the Energy Transition
| UNctad |
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| https://investmentpolicy.unctad.org/pages/1072/trends-in-the-investment-treaty-regime-and-a-reform-toolbox-for-the-energy-transition |
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Do you want to know more?
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| SOMO |
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| SOMO, the Centre for Research on Multinational Corporations, investigates the impacts and enablers of unjustified corporate power. Independent, factual, and critical, we have a clear goal – a fair and sustainable world in which public interests outweigh corporate interests. |
| https://www.somo.nl/ |
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| European Coalition for Corporate Justice |
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| We are guided by a vision of a sustainable world in which corporations’ drive for profit is balanced by the interest of society at large, and where companies respect human, social, and environmental rights. |
| https://corporatejustice.org/ |
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