Posted on Mar 27, 2021
New twists in the ECT tale continue to emerge.
The much scrutinised tale of the Energy Charter Treaty (ECT), which has been recently unfolding in the Brussels and international media, appears to have taken a new twist this week.
Two candidates have been formally announced to vie for the top executive post of the Energy Charter Secretariat – the incumbent Secretary-General, Ambassador Urban Rusnak of Slovakia, and his challenger, Guy Lentz, Luxembourg's Diplomatic Counsellor and Coordinator for European and International Energy Affairs.
This has been made known through an internal Energy Charter document distributed to ECT member countries earlier in the week.
The ECT has been the focus of media attention for some time. This is mainly due to the ongoing efforts to ‘modernise’ the Treaty, a process which entails substantial reform. The Treaty, signed in 1994, is widely portrayed by climate activists as a roadblock to effective climate justice and to European efforts to advance the energy transition. For others, the ECT represents a level playing field, particularly for energy investors, for whom it provides additional protection for private foreign direct investments into all sources of energy.
In fact, according to the available statistics from the last decade, most ECT disputes were linked to the protection of renewable energy investment in the European Union. ECT modernisation is arguably the most important development in the entire Energy Charter process since 1998, when the Treaty entered into force. It will undoubtedly define what role the ECT will play within the context of international energy and climate cooperation in the years to come, and whether there will be a role for the Treaty in this process at all.
Two candidates for the ECT’s top executive job announced.
Luxembourg's candidate Lentz has, according to his nomination letter, both sound knowledge and experience acquired in private and public sectors, including managing mid- sized as well as large teams. He has more than twenty years of experience in the energy sector. For the last fifteen years, he represented Luxembourg in the EU Council, and in ENSREG (coordination of EU nuclear regulator). Lentz is a Governor in the International Energy Agency (IEA, Paris) Governing Board and assisted in the establishment of the International Renewable Energy Agency (IRENA, Abu Dhabi).
For the past 15 years, Lentz has been the representative of Luxembourg in the working groups of the Energy Charter, where he is currently the Vice-Chair of the Governance Group and of the Group dealing with the process of Treaty Modernisation. He took part in the international audit conducted inside the Energy Charter Secretariat in 2019.
According to Lentz, the ECT needs substantial reform to reflect current and future investment protection standards and facilitate a transition to a sustainable energy system in line with the objectives of the Paris Agreement and our common goals for tomorrow's decarbonised economies to complete climate neutrality for our children.
Guy Lentz was raised in Brussels, within a family of a high-level Eurocrat, and was educated in Belgian universities in the fields of law and European affairs. He gained his private sector experience in the banking and fossil fuel sectors.
According to Rusnak's biography, since his arrival at the Energy Charter in 2012, he focused his efforts on the modernisation and expansion of the International Energy Charter. During this period, five countries – Afghanistan, Montenegro, Iceland, Jordan and Yemen – became members of the ECT, while three African nations – Mauritania, Burundi and Eswatini (formerly Swaziland) – were invited to join the Treaty.
That said, Rusnak was not able to prevent the defection of two of the ECT’s important members, Russia and Italy, from leaving the Treaty.
Rusnak elevated the transparency levels of the organisation and initiated the rotating Chairmanship of the Energy Charter Conference, the ECT’s governing body. The International Energy Charter declaration, which was signed by scores of countries as of May 2015, is probably his most significant achievement in the ECT process to date.
What is missing in his application, however, is the public scandal related to the accusations made against him by his former deputy, Masami Nakata from Japan. Nakata’s allegations led to the international public auditing of the organisation in autumn 2019.
Whatever findings were established by the audit, they clearly were not sufficient to remove Rusnak from his post. Indeed, he makes no secret of being the right man to drive the ECT Modernisation process through to its conclusion, and he recognises this as an ultimate challenge for the organisation.
Rusnak has said that Failure to modernise the ECT could lead to the withdrawal of several Contracting Parties from the ECT and the fast implosion of the process. Due to the sunset-clause, countries withdrawing from the ECT (1994) would be bound by its investment protection provisions for 20 years.
Urban Rusnak was raised in Czechoslovakia, studied oil geology in Moscow (USSR) and social sciences in Ankara (Turkey). He served as Ambassador of Slovakia to Ukraine. He is a career diplomat with no private sector experience.
Let the best man win.
The selection process of the Secretary-General is fully in the hands of the delegates from the ECT member countries, or Contracting Parties.
Both candidates apparently know each other very well, in a relationship that goes back many years. According to a source familiar with the situation, they are on first-name terms.
However, since the international public audit in 2019, their relations have soured. Furthermore, a closer look at the nomination letters of each candidate reveals a particular intrigue.
While Lentz was nominated for the post of Secretary General by Luxemburg's energy minister, Claude Turmes (a former MEP in Brussels), Rusnak recieved nominations from three countries – Kazakhstan, Albania and Uzbekistan. But, strangely, there is no mention of Slovakia's nomination.
According to established tradition, the post of Energy Charter Secretary-General was always filled by a European national – the EU provides roughly half of the ECT membership and almost two thirds of the budgetary contributions of the organisation. There is little doubt which of the two candidates has more experience with the Energy Charter process – Rusnak's ten years service is broadly valued and respected. But it is also clear as to which candidate is more deeply rooted and intimately connected in Brussels – native Lentz is punching way above Luxembourg's nominal weight and enjoys explicit support from his minister.
An internal hearing on the top job is expected to take place within the Energy Charter Conference in April. This will be a predominantly formal and largely closed process, for members only. Given the importance of the ECT modernisation process for Europe’s energy future, a public debate between the two candidates seems to be a much more credible idea to determine which of these two energy leaders is most fit for the top job.
The stakes are high. The final leg of ECT modernisation beckons. Let the ECT mystery unravel further.
- Brussels calling: “deep mystery” of the Energy Charter Treaty needs to be solved by investigative journalists
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