CYIL vol. 12 (2021)

Monika Feigerlová

CYIL 12 (2021)

Sustainable Development In line with the European climate priorities, the EU Proposal includes provisions on sustainable development, among others, in relation to climate change and clean energy transition. It incorporates specific references to the UNFCCC and the Paris Agreement. Under the EU Proposal the contracting parties recognise that economic development, social development, and environmental protection are interdependent and mutually reinforcing components of sustainable development. The sustainable development is further elaborated on to include right to regulate, making reference to multilateral environmental agreements and labour conventions, climate change and clean energy transition, impact assessment, and responsible business practices in line with the UN Guiding Principles on Business and Human Rights or the OECD Guidelines for Multinational Enterprises. The proposed text is not entirely clear as to whether the aim is to refer to such standards or to impose obligations on investors to comply with them. Some states 75 contemplated non- binding provisions whereas the EU anticipated implementation of the provisions in domestic legislation. For example, according to the EU, the adherence of companies to responsible business conduct shall be ensured through the ECT contracting parties’ domestic law consistent with internationally recognised standards. 76 Under the EU Phase-Out Proposal, the ECT shall contain provisions on environmental impact assessment of projects for the production of energy goods that the ECT parties must implement in their legislation. 77 The various provisions on sustainable development are nevertheless proposed as stand- alone provisions 78 and not just preambular declarations. In the area of climate change and clean energy transition, the states shall ‘effectively implement’ climate objectives pursued by the UNFCCC and the Paris Agreement and enhance the contribution of trade and investment to climate change mitigation and adaptation. The states shall also effectively implement their commitments with regard to their Nationally Determined Contributions under the Paris Agreement. 3. Dispute Resolution under the ECT Save for the limits that ECT places on contracting states in pursuing their climate objectives, another area of disagreement is the ‘EU concern’ over the investor-state dispute settlement (ISDS) within the EU. In the Achmea decision of 2018, 79 the European Court of Justice declared the ISDS provisions contained in the Netherlands-Slovakia bilateral investment treaty that allowed for a settlement of disputes between an EU national and an EU member state via arbitration incompatible with the principle of autonomy of EU law. 80 75 For example Switzerland anticipated the possibility of including a non-binding language referring to the responsible business conduct of companies. See Decision of the Energy Charter Conference. CCDEC 2019 08 STR. 6 October 2019, p. 39. 76 Idem., p. 38. 77 Part IV [Miscellaneous provisions] of the EU Proposal. 78 Ibid. 79 Judgment of the Court (Grand Chamber) of 6 March 2018, C-284/16, Slowakische Republik (Slovak Republic) v Achmea BV . 80 According to the union institutions, such disputes shall be resolved by national courts of the EU member states pursuant to Articles 267 and 344 of the Treaty on the Functioning of the European Union as only national courts can ask the European Court of Justice for a preliminary reference ruling and thus secure uniform interpretation of EU law.

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