Following the introduction of competition in network energy industries of some Contracting Parties to the Energy Charter Treaty (ECT), in addition to investment protection challenges, foreign investors may today face barriers to competition arising out of uncommon norms and standards, exemptions and arbitrary public procurement policy decisions. In order to overcome such barriers to competition in network energy industries, the energy sector should be persuaded to adopt continuous and consistent levels of international cooperation on issues of competition. The Energy Charter Treaty provides the legal framework for such cooperation. Article 6 of the ECT paves the way for technical assistance and cooperation on the development and implementation, and in the enforcement of competition rules among the Contracting Parties within the ECT constituency.
Concerning free market economy and competition principles embodied within the ECT, this paper reviews the legislation of the selected Contracting Parties (the EU, Denmark and Georgia), and their bilateral, multilateral and regional endeavours to cooperate in establishing open and competitive network energy markets.
This paper concludes with the methods and cooperation options that Contracting Parties have successfully developed in order to stimulate competition in their network energy industries. Recommendations are provided to facilitate and further improve cooperation on issues of competition within the ECT constituency. Many initiatives are outlined and discussed, such as non-case-specific recommendations and best practices, facilitation of direct contact between competent authorities in the ECT constituency and the option to undertake specialised/customised workshops within the Energy Charter Process.
This report was written by Mr. Uğur Erman Özgür during his internship at the Energy Charter Secretariat in 2012, under the supervision of Mr. Zafar Samadov, ECS Expert on Investment.