Consequences of crisis and the great re-think: COVID-19’s impact on energy investment, sustainability and the future of international investment agreements

The COVID-19 pandemic and its resulting disruptions are having a significant impact on the global economy and international investments. Various State measures to address the pandemic are leading to widespread economic disruptions across several industries, including the energy sector. The current crisis has impacted energy demand, disrupted the global supply chain and created financial uncertainty. The pandemic has exacerbated issues relating to health, the environment, labour and human rights in the energy sector. This article seeks to understand the pandemic’s impact in shaping future human rights policy in international investment law. This article analyses current drafting trends in international investment agreements (IIAs) in 2019–2020, particularly in the context of recent developments in sustainable development and human rights. Although there are some noteworthy developments in recent IIAs, the pandemic has highlighted the need for further treaty reforms. It provides an opportunity for policymakers and corporations alike to address human rights issues and to incorporate the principles of sustainable investment into IIAs. The energy sector in particular plays a significant role in promoting sustainable development and post-COVID policy reforms will be essential for future energy security and global stability. In conclusion, this article considers the future of potential reforms in the post-COVID recovery agenda while keeping in mind energy and climate goals.

The Zhenhua Case: the emergence of civil environmental public interest litigation in China

In 2015, the All-China Environment Federation v Dezhou Jinghua Group Zhenhua Corporation Limited case was the first civil environmental public interest litigation (CEPIL) against air pollution in China. Constituting a milestone in the field of air pollution control in China, this case (i) confirms the eligibility of a non-governmental organisation (NGO) to file civil public interest litigations; (ii) discusses remedies for the ecological destruction caused by air pollution; (iii) assesses the ecological and environmental damage using the ‘virtual restoration cost’ method; and (iv) uses public apology as an innovative way for Zhenhua to assume liability. By applying and interpreting several important rules under the Environmental Protection Law of China (EPLC) for the first time, this case sets an example for future CEPILs against air pollution in China.

Retooling the Energy Charter Treaty for climate change mitigation: lessons from investment law and arbitration

In 2017, the Energy Charter Treaty (ECT) began a modernization process aimed at updating, clarifying, and modernizing a number of provisions of the Treaty. Considering the scope of application of the Treaty—cooperation in energy trade, transit, and investment—there is hardly any doubt that the modernization kicked off in 2017 offers a springboard for constructive reform and a unique opportunity to bring the Treaty closer in line with the objectives of the Paris Agreement. Although none of the items selected by the Energy Charter Conference and open for discussion and reform mention climate change or clean energy, a careful analysis of the relevant practice in both treaty drafting and adjudication can provide valuable insights as to how to steer the discussions on some of the existing items in a climate-friendly direction. The purpose of this article is to rely on this relevant practice to explore promising avenues to ‘retool’ the Treaty for climate change mitigation, in other words, to imagine a Treaty that would better reflect climate change concerns and clean energy transition goals.

A need for clarification of the energy solidarity principle: what can be learned from the GeneralCourt’s judgment in the OPAL case?

The EU Court of Justice General Court’s judgment in Case T-883/16 on withdrawal of the Commission’s decision on the exemptions for the OPAL pipeline (an onshore continuation of Nord Stream 1) from some of the provisions of EU legislation in gas sphere on the basis of non-compliance with the principle of energy solidarity may have a great impact on the development of EU gas market with regard to balancing different approaches to external gas supply. This case may also raise some concerns on EU energy legislation from the point of view of impact of political goals on the regulation of the market. Having regard to these issues, the article analyses this case from the perspective of EU case law on application of the solidarity principle to point out the main legal aspects of utilization of this principle and crystallize it from non-legal biases. The article also provides a holistic assessment of the general application of the solidarity principle in the energy sphere and identifying the main gaps on the example of the OPAL case judgment.

Price review arbitration in the Asian LNG markets—‘‘The times they are a-changin’’

This article will focus on price review clauses in Asian LNG markets from the point of view of price review arbitration and the jurisdiction of the tribunal. The basic conclusion reach is that there is no simple answer but that various considerations speak in favour of establishing the jurisdiction of arbitral tribunals in respect of gas prices. The background to the article is a number of gas price arbitrations that have been initiated in Asian markets and the assumption that these early cases will be followed by many more. One of the questions raised in this context is jurisdiction of the tribunal.

Look before you leap: are your oil patch liability clauses enforceable?: (An analysis under civil law jurisdictions with emphasis on Brazil)

The oil and gas industry requires huge investments involving extraordinary financial, environmental and safety risks. Dramatic images of the Deepwater Horizon (Gulf of Mexico, 2010), Alpha Piper (Scotland, 1988), P-51 (Brazil, 2001) and Campeche (Mexico, 1979) disasters offer chilling reminders of the monumental loss of life, property and environmental integrity that can quickly result from human error. With this backdrop, industry participants and their insurers learned early on that the normal fault-based approach to wellsite liability did not fit the nature and needs of the petroleum business. This article analyzes the risks inherent in applying the laws of a civil law jurisdiction to an oil and gas wellsite contract based on common law principles, with special emphasis on Brazil. It first briefly describes the traditional common law approach to liability allocation in wellsite contracts, including “knock-for-knock” principles (“K4K”). Next, it outlines the traditional civil law approach to liability (responsbilité) through French and Brazilian prisms. The authors do not deeply discuss the pros and cons of K4K clauses nor the policy implications of anti-indemnity statutes. Rather, they assume the reader is contemplating the negotiation of a wellsite services contract subject to the laws of a civil law jurisdiction, and describe the relevant risks and possible mitigation strategies.