4. The Energy Community Treaty 46

The key objective of the Energy Community is to extend the EU internal energy market rules and principles to countries in South-East Europe, the Black Sea region and beyond, on the basis of a legally binding framework. The parties committed themselves to implement the relevant EU law (acquis communautaire), to develop an adequate regulatory framework and to liberalise their energy markets in line with the acquis under the Treaty.

The Energy Community acquis communautaire relevant to hydropower development is part of the acquis on environment and applies to the following Directives:

Dispute settlement mechanism 51

The Energy Community’s dispute settlement mechanism bears a certain resemblance to the European Community’s infringement procedure, however, without providing for a judicial decision in the last instance.

In case of non-compliance by a Party with Energy Community law, any person or entity (i.e. all natural and legal persons as well as companies, firms or associations having no legal personality) has a right to submit complaints to the Energy Community’s Secretariat.

The complaint may be general or relating to a particular project. For example, the complaint may refer to the national laws, which do not ensure the effective participation of the public concerned in the EIA decision-making procedures. Or it may refer to certain HPP permitting procedures where public consultation, although required, was not conducted.

Interested third parties may access the case file and/or submit written observations to the Secretariat, provided they substantiate their legitimate interest. If the Secretariat decides not to pursue a case, the complainant may directly approach the Permanent High Level Group, which can either hear the complaint directly or initiate a preliminary procedure.

With the Opening Letter, the Secretariat initiates a preliminary procedure, the purpose of which is giving the Party concerned the possibility to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full factual and legal background of the case. The Party is given two months to comply of its own accord with the requirements of the Treaty, to justify its position.

A Reasoned Opinion is the second step in a dispute settlement procedure. With the Reasoned Opinion, the Party concerned is requested to rectify the identified issues of non-compliance within a time-limit of two months. Depending on the reply of the respective Government, the Secretariat may submit the case to the Energy Community’s Ministerial Council for a decision on the Party’s compliance with Energy Community law.

Thereafter, in a Reasoned Request, the Secretariat seeks a decision from the Ministerial Council on the Party’s failure to comply with its obligation under the Energy Community Treaty. Before taking a decision, the Advisory Committee is asked for its opinion on the Secretariat’s Reasoned Request, for which it conducts a public hearing. At the meeting following the adoption of the Advisory Committee’s opinion, the Permanent High Level Group shall hear both parties to the case as well as the President of the Advisory Committee, before including the case on the agenda of the next meeting of the Ministerial Council.

In case the concerned Party does not rectify the breach identified by the Ministerial Council, or in other cases of a serious and persistent breach of Energy Community law, a Party, the Secretariat or the Regulatory Board may request a decision of the Ministerial Council for concrete measures to be taken. Such measures relate to the suspension of certain rights, including but not limited to the suspension of voting rights and the exclusion from the meetings or mechanisms provided for in the Treaty.

Dispute Resolution and Negotiation Centre 52

Before the Secretariat opens a dispute settlement procedure against a Party to the Treaty due to non-compliance, the Dispute Resolution and Negotiation Centre (hereafter “Center”) shall review whether the case is suitable for a settlement. A case is suitable for a settlement in particular where compliance can be reached within a commonly agreed timeframe, and/or where the Party concerned can reach compliance with the assistance of the Secretariat. The suitability assessment shall be included in the case file.

The purpose of the Centre is to promote and provide facilities for the resolution of:

  • disputes within the Energy Community between states and national authorities on the one hand, and private parties on the other;
  • commercial disputes between private parties;
  • disputes between states and national authorities;
  • or disputes between the Parties to the Energy Community Treaty and the Secretariat.

Any interested party is invited to submit a request to have negotiations of a dispute facilitated by the Centre. The request shall be made in writing and shall contain:

  • the name and address of the disputing parties;
  • a summary of the dispute (including any claims for damages);
  • a presentation of any related pending proceedings;
  • and any documents deemed necessary for the purposes of the negotiations.

Following the registration of the request, the Centre shall provide the disputing parties with a draft Memorandum of Understanding, to be signed by all disputing parties consenting to the facilitation of the resolution of the dispute, and the chair of the Centre.

Unless the disputing parties and the Centre agree to a longer period, negotiations shall take place within a period of three months. The negotiation proceedings are considered terminated in one of the following circumstances:

  • when a settlement agreement is reached by the disputing parties;
  • when one of the disputing parties, or all the disputing parties jointly, submit
    a note to the facilitator, the Centre and the Secretariat, that the negotiations are terminated;
  • and upon expiry of the deadline, when no extension has been agreed.

footnote 67

Convention on the Conservation of European Wildlife and Natural Habitats,
https://www.coe.int/en/web/conventions/full-list/-/conventions/treaty/104

footnote 64

Guidance on the Application of the Environmental Impact Assessment Procedure for Large-scale Transboundary Projects: http://ec.europa.eu/environment/eia/pdf/Transboundry%20EIA%20Guide.pdf

footnote 63

Guidance on Public Participation in Environmental Impact Assessment in a Transboundary Context: https://www.unece.org/fileadmin/DAM/env/documents/2006/eia/ece.mp.eia.7.pdf

footnote 62

Guidance on the Application of the Environmental Impact Assessment Procedure for Large-scale Transboundary Projects: http://ec.europa.eu/environment/eia/pdf/Transboundry%20EIA%20Guide.pdf

footnote 54

United Nations Economic Commission for Europe, The Aarhus Convention: An implementation guide, 2014

footnote 50

Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment (transposition by 1 January 2018 and implementation by 31 March 2018)

footnote 49

Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, as amended by Directive 2006/21/EC, Directive 2009/31/EC and Directive 2013/30/EU (implementation by 1 January 2021)

footnote 48

Directive 79/409/EEC of the Council of 2 April 1979 on the conservation of wild birds (implementation on the entry into force of the Treaty i.e. 1 July 2006)

footnote 47

Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, as amended by Council Directives 97/11/EC of 3 March 1997 (implementation on the entry into force of the Treaty i.e. 1 July 2006), Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (implementation by 14 October 2016) and Directive 2014/52/EU (implementation by 1 January 2019)

footnote 40

The habitats and species concerned are defined by reference to species and types of natural habitats identified in the relevant parts of the Birds Directive and the Habitats Directive. The scope of the ELD is not restricted to the Natura 2000 network. The species mentioned in ELD which occur outside the SACs and SPAs and even migratory species are also included

footnote 39

The significance of any damage that has adverse effects on reaching or maintaining the favourable conservation status of habitats or species has to be assessed by reference to the conservation status at the time of the damage, the services provided by the amenities they produce and their capacity for natural regeneration. Significant adverse changes to the baseline condition should be determined by means of measurable data such as:

  • the number of individuals, their density or the area covered;
  • the role of the particular individuals or of the damaged area in relation to the species or to the habitat conservation, the rarity of the species or habitat (assessed at local, regional and higher level including at Community level);
  • the species’ capacity for propagation (according to the dynamics specific to that species or to that population), its viability or the habitat’s capacity for natural regeneration (according to the dynamics specific to its characteristic species or to their populations);
  • the species’ or habitat’s capacity, after damage has occurred, to recover within a short time, without any intervention other than increased protection measures, to a condition which leads, solely by virtue of the dynamics of the species or habitat, to a condition deemed equivalent or superior to the baseline condition.

Damage with a proven effect on human health must be classified as significant damage. The following does not have to be classified as significant damage:

  • negative variations that are smaller than natural fluctuations regarded as normal for the species or habitat in question;
  • negative variations due to natural causes or resulting from intervention relating to the normal management of sites, as defined in habitat records or target documents or as carried on previously by owners or operators;
  • damage to species or habitats for which it is established that they will recover, within a short time and without intervention, either to the baseline condition or to a condition which leads, solely by virtue of the dynamics of the species or habitat, to a condition deemed equivalent or superior to the baseline condition.

footnote 38

Damage took place not earlier than 30 April 2007 or the activity causing the damage was finished not earlier than 30 April 2007, or less than 30 years have passed since the emission, event or incident, resulting in the damage, occurred

footnote 32

See C-664/15, Protect, paragraph 81

footnote 31

See C-664/15, Protect, paragraph 102

footnote 30

CIS Guidance no 36 Exemptions to the Environmental Objectives according to Article 4(7):
https://circabc.europa.eu/sd/a/e0352ec3-9f3b-4d91-bdbb-939185be3e89/CIS_Guidance_Article_4_7_FINAL.PDF

footnote 28

See C-461/13, Bund für Umwelt und Naturschutz Deutschland e.V. v Bundesrepublik Deutschland

footnote 27

This includes new modifications to the physical characteristics of a surface water body, alterations to the level of groundwater, and new sustainable human development activities

footnote 24

See C-127/02, Waddenzee, paragraphs 66 – 70. In case C-243/15, the Court of Justice also confirmed that decisions adopted by the competent national authorities within the framework of Article 6(3) of Directive 92/43 (whether they concern a request to participate in the authorisation procedure, the assessment of the need for an environmental assessment of the implications of a plan or project for a protected site, or the appropriateness of the conclusions drawn from such an assessment as regards the risks of that plan or project for the integrity of the site, and whether they are autonomous or integrated in a decision-granting authorisation) are decisions, which fall within the scope of Article 9(2) of the Aarhus Convention

footnote 23

Guidance on the requirements for hydropower in relation to Natura 2000, p. 70: http://ec.europa.eu/environment/nature/natura2000/management/docs/Hydro%20final%20May%202018.final.pdf

footnote 22

Guidance on the requirements for hydropower in relation to Natura 2000: http://ec.europa.eu/environment/nature/natura2000/management/docs/Hydro%20final%20May%202018.final.pdf

footnote 21

See C-127/02, Waddenzee, paragraphs 66 – 70. In case C-243/15, the Court of Justice also confirmed that decisions adopted by the competent national authorities within the framework of Article 6(3) of Directive 92/43 (whether they concern a request to participate in the authorisation procedure, the assessment of the need for an environmental assessment of the implications of a plan or project for a protected site, or the appropriateness of the conclusions drawn from such an assessment as regards the risks of that plan or project for the integrity of the site, and whether they are autonomous or integrated in a decision-granting authorisation) are decisions, which fall within the scope of Article 9(2) of the Aarhus Convention

footnote 20

See, C-243/15, Lesoochranárske zoskupenie VLK v Obvodný úrad Trenčín (Slovak Bears II), para 46-49

footnote 18

See Commission Notice on Access to Justice in Environmental Matters, https://ec.europa.eu/environment/aarhus/pdf/notice_accesstojustice.pdf

footnote 17

See C-474/10 – Seaport (NI) and others, paragraphs 45 and 50

footnote 16

See C-295/10, Valčiukienė and Others, paragraphs 44-47 and 53

footnote 13

Environmental Impact Assessment of Projects Guidance on the preparation of the Environmental Impact Assessment Report: http://ec.europa.eu/environment/eia/pdf/EIA_guidance_EIA_report_final.pdf

footnote 12

See C-75/08, Mellor, paragraph 64

footnote 10

See C-66/06, Commission v Ireland, paragraph 64

footnote 11

See C-87/02, Commission v Italy, paragraph 49

footnote 09

See for example C-66/06, Commission v Ireland; C-255/08, Commission v Netherlands; C-435/09, Commission v Belgium

footnote 02

The EU’s ‘acquis’ is the body of common rights and obligations that are binding for all EU Member States. It constantly evolves and comprises: the content, principles and political objectives of the Treaties; legislation adopted in application of the treaties and the case law of the Court of Justice of the EU; declarations and resolutions adopted by the EU; measures relating to the common foreign and security policy; measures relating to justice and home affairs; international agreements concluded by the EU, as well as those concluded by EU countries between themselves in fields relevant to the EU’s activities.
(https://eur-lex.europa.eu/summary/glossary/acquis.html)

footnote 01

The rule of law is one of the EU’s fundamental values. It is the idea that both the EU itself and all EU countries are governed by a body of law (legal codes and processes) adopted by established procedures, rather than discretionary or case-by-case decisions.
(https://eur-lex.europa.eu/summary/glossary/rule_of_law.html)

footnote 47

Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, as amended by Council Directives 97/11/EC of 3 March 1997 (implementation on the entry into force of the Treaty i.e. 1 July 2006), Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (implementation by 14 October 2016) and Directive 2014/52/EU (implementation by 1 January 2019)

footnote 48

Directive 79/409/EEC of the Council of 2 April 1979 on the conservation of wild birds (implementation on the entry into force of the Treaty i.e. 1 July 2006)

footnote 49

Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, as amended by Directive 2006/21/EC, Directive 2009/31/EC and Directive 2013/30/EU (implementation by 1 January 2021)

footnote 50

Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment (transposition by 1 January 2018 and implementation by 31 March 2018)