In 2012 Vattenfall filed a case against the German state with the International Centre for Settlement of Investment Disputes (ICSID) in Washington. The ICSID hearing will take place from Monday, 10 October, through Friday, 21 October. It will be streamed on the ICSID website (see link below).
“As a foreign investor, Vattenfall saw no other way of being heard,” Anne Gynnerstedt points out. ”Vattenfall does in no way question the decision to phase out nuclear power in Germany. But we insist on being compensated for the financial loss resulting from this decision. Based on the Energy Charter Treaty we make use of a framework which has been created exactly for such cases and has been agreed by 52 countries, including Sweden and Germany to provide security to foreign investors,” says Anne Gynnerstedt.
Why should a company like Vattenfall indict a state for the consequences of a democratically taken decision?
“We fully accept the German decision to phase out nuclear power. But when Germany decides to reorient its energy policy, foreign investors should not have to pay the price for such a decision and its immediate consequences. The Energy Charter Treaty’s aim is to promote long-term co-operation in the energy field which presupposes that signatories respect fundamental legal principles.”
“Investments in the energy sector always involve large sums of money, and there is a need for long-term planning. That’s also the reason why there is a special trade charter precisely in this sector. If a foreign company has made major investments in a high-resource industry such as nuclear power under the precondition that this type of energy will be part of the energy system, then the company should not have to assume the consequences of a sudden political change. That was also the understanding of the German state when it signed the Trade Charter.”
Anne Gynnerstedt also emphasises that from a standpoint of one of the largest industrial nations the case is much more daily business than a political scandal.
“German companies, including small and medium size enterprises and German municipal utilities regularly make use of investor protection agreements. As an example, both Stadtwerke Munich and Steag, the latter owned by the Rhein-Ruhr consortium of municipal utilities, have recently filed cases at ICSID.”
The Energy Charter Treaty’s website shows that 59 lawsuits are currently ongoing between companies and national states. Anne Gynnerstedt expects that after the hearing the ICSID in Washington will need several months to duly assess all material before taking a decision.