British oil company Rockhopper wanted to drill near Pescara on Italy's east coast
JUSTICE campaigners slammed the British government today over trade agreements that have forced Italy to pay fines to an oil company — for trying to protect the environment.
The Italian government has been ordered to pay €190 million (£160m) to British oil and gas company Rockhopper with added interest because of Rome’s decision to ban oil exploration near Italy’s coastline.
Rockhopper brought the case against the Italian government using the Energy Charter Treaty which contains a legal mechanism, the investor-state dispute settlement (ISDS), allowing corporations to sue countries in tribunals on policy decisions which could impact their future profits.
Rockhopper was awarded €190m through the process, a sum many times its original investment of $29 million (£25m).
The decision by the Italian government to ban oil exploration near its coastline was made following a community campaign against Rockhopper’s planned oil rig in Abruzzo on the eastern coast of Italy, anti-poverty charity War on Want said.
War on Want senior trade campaigner Leah Sullivan said: “The UK claims to be a climate leader — it’s indefensible that its trade agreements enable fossil fuel companies to sue countries for taking steps to protect the climate and environment.
“Countries must be able to take climate action and protect communities without fear of bank-breaking lawsuits. Investor-state dispute settlement (ISDS) is completely incompatible with the measures governments urgently need to take to prevent climate breakdown.”
Under the Energy Charter Treaty’s 20-year sunset clause, Italy can still be sued until 2036 even though it has already exited the treaty.
The UN Intergovernmental Panel on Climate Change (IPCC) has previously warned the ISDS mechanism in trade deals are a threat to climate action, War on Want said.
War on Want is calling for the British government to “withdraw from the Energy Charter Treaty (ECT) as soon as possible and remove ISDS from its trade deals.”
ECT member states have been negotiating amendments to the treaty. Government will need to decide whether or not to accept the changes by November 2022.
