Foreign Investment in the Energy Sector

Balancing Private and Public Interests


Foreign investments in the energy sector raise formidable legal questions, often requiring a delicate balance between private and public interests of the various stakeholders. Foreign Investment in the Energy Sector: Balancing Private and Public Interests opens with a discussion of the legal protection of foreign investment in the main segments of the energy sector (namely oil, gas, mining and hydroelectric industry), both in substantive and procedural terms. This second part of the book focuses on the Energy Charter Treaty, by far the most important international legal instrument in the energy sector, and its future after the decision of the Russian Federation not to ratify it. In its third part, the book examines four critical areas that are often negatively concerned by economic activities by multinational in the energy sector, namely compliance with safety and labour standards, protection of the environment, respect of indigenous peoples rights, and protection of public health. Foreign Investment in the Energy Sector: Balancing Private and Public Interests, a comprehensive collection of essays from experts and practitioners, offers an important new resource to the field.
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Biographical Note

Eric De Brabandere, Cand. and Lic. Jur.(Ghent), LL.M. (Geneva), Phd (Ghent), is Associate Professor at the Grotius Centre for International Legal Studies at Leiden University specializing in international law, international dispute settlement, and investment law and arbitration. He is a Member of the Brussels Bar. He is a Visiting Professor at the Catholic University of Lille (France), Editor-in-Chief of the Leiden Journal of International Law and a member of the editorial boards of the Revue belge de droit international and The Journal of World Investment & Trade. Tarcisio Gazzini, BA (Padova), LLM (Nottingham), PhD (Padova) is Associate Professor at the VU University Amsterdam. He has previously held teaching positions at the Universities of Padua and Glasgow. He is a member of the International Law Commission Committee on non-state actors and of the editorial board of the Leiden Journal of International Law.

Table of contents

Table of Contents Preface by Eric De Brabandere and Tarcisio Gazzini Contributor Biographies List of Cases Chapter One: Introduction by Graham Coop Chapter Two: FDI in the Energy Sector: Recent Trends and Policy Issues by Joachim Karl 1. The Importance of FDI in the Energy Sector 2. FDI-Related Policies in the Energy Sector 3. Reconciling Conflicting Interests of Host Countries and Foreign Investors in the Energy Sector 4. Concluding Remarks Chapter Three: Multiple Investment Regimes for Russian Subsoil Resources: Work in Progress or Utopia? by Andrey Konoplyanik List of Abbreviations 1. Introduction 2. Implementation of Subsoil Resource Investment Regimes Worldwide 3. Historical Development of Russian Subsoil Legislation (Including Variations with Respect to Petroleum Taxation) 4. Oil Tax Reform of Early 2000s: Administrative Simplicity vs. Economic Efficiency 5. Multiple Investment Regimes for Russian subsoil (Author’s Historical Proposal) 6. Vicious Circle 7. Which Way Forward Chapter Four: International Law and Foreign Investment in Hydroelectric Industry: A Multidimensional Analysis by Attila Tanzi 1. Introduction: A Multidimensional Analysis 2. On International Investment Law and Hydroelectric industry 3. On the Application of Human Rights Law to Hydro-Electric Industry and its Potential Impact on Foreign Investment in this Area 4. The Inter-State Dimension of Hydropower Projects and the Relevance Of International Water Law to Foreign Investment in this Sector 5. On Civil Liability Aspects for Harm Caused by Water Related Activities 6. Concluding Remarks Chapter Five: The Settlement of Investment Disputes in the Energy Sector by Eric De Brabandere 1. Introduction 2. Dispute Settlement in the Energy Sector: an Overview 3. Investor-State Dispute Settlement: The Problem of Parallel Proceedings and Overlapping Investment Protection Treaties 4. Conclusion Chapter Six: Energy Charter Treaty: Achievements, Challenges and Perspectives by Tarcisio Gazzini 1. Introduction 2. Preliminary Remarks on Some Specific Features of or Related to the ECT 3. Main Achievements of the Energy Charter Treaty 4. Main Difficulties of the Energy Charter Treaty 5. The Russian Decision Not to Ratify the ECT and its Consequences 6. The Future of the ECT and of the Energy Relations between the EU and the Russian Federation 7. The possible expansion of the ECT constituency 8. Concluding remarks Chapter Seven: The Tripartite Dimension of Conflicts of Interests Workers, Foreign Investors and Host States in the Energy Sector by Yannick Radi 1. Introduction 2. The Normative Background: Labour Rights and Standards in International Law 3. Labour Issues Raised in the Energy Sector: The Example of the Oil and Gas Sector 4. Labour Issues in the Energy Sector and International Investment Law 5. Conclusion Chapter Eight: Energy, Environment and Foreign Investment by Makane Moïse Mbengue and Deepak Raju Introduction 1. Understanding the Relationship 2. Environmental Regulation and Substantive Clauses in Investment Treaties 3. Environment Protection and Procedural Aspects of Investment Arbitration 4. Conclusions Chapter Nine: Foreign Investment in the Energy Sector and Indigenous Peoples’ Rights by Federico Lenzerini Introduction 1. Indigenous Peoples’ Rights vis-à-vis the Economic Exploitation of Their Ancestral Lands 2. Resolution of Disputes Concerning Foreign Investment in Indigenous Peoples’ Lands Conclusion: The Need to Balance Conflicting Values Chapter Ten: Foreign Investment in the Energy Sector and Public Health by Valentina Vadi Introduction 1. Energy and Public Health: Making the Connection 2. A Case Study: Vattenfall v. Germany 3. Conflicting Conceptualizations of International Investment Arbitration 4. Amidst Deference and De Novo Review Conclusion Chapter Eleven: Foreign Investment in the Energy Sector: Lessons for International Investment Law by Stephan W. Schill Introduction 1.International Energy Investments: Fragmented Or Integrated Investment Regimes? 2. Learning From International Energy Investment Law Conclusion


All those interested in foreign investment law in the energy sector and the balancing between the private and public interests and rights of the different stakeholders. Readership includes postgraduate students (especially but not exclusively in law faculties), academics, lawyers involved in investment-related disputes (including in-house counsels), international and national civil servants, and informed public.