By Dr. Mostafa Elshazly Senior Associate, Zaki Hashem and Partners Law Firm- Visiting Lecturer of Business and Energy Law
Energy justice is among the main concepts that are usually referred to, directly or indirectly, in most energy regulations and statutes. The term “Energy Justice” refers principally to providing all individuals, across all areas in the country, with safe, affordable and sustainable energy regardless of the source of such Energy. It addresses fairness and equity concerns within the current energy system and incorporates aspects of deep democracy and cooperation between all stakeholders.
Numerous Aspects for Energy Justice
Learned jurists indicate that Energy Justice is likely framed by the following two elements;
-Distribution of costs, or how the energy projects related hazards and externalities are disseminated throughout society.
-Distribution of benefits, or how individuals are benefiting from energy projects and the wealth yielded therefrom.
Involuntary resettlement and dispossession of private-owned lands for energy projects use, energy poverty, fossil fuel pollution, nuclear waste and energy products subsidize can be classified as pressing justice concerns that seriously affect Energy Justice. These examples as will be elaborated hereinafter are not meant to be exhaustive and cover only a range of notable concerns on place. That said, Energy Justice is an extendable and variable principle that is subject to the evolution in the energy industry globally.
Apart from that, each energy source is inevitably imbued with its own justice challenges. These challenges and the volume thereof differ from one country to another.
In some countries, the execution of Energy projects may require the displacement of individuals from their homes to other zones or the government may seize privately owned lands for sake of Energy projects. In many instances, this happens without obtaining the consent of the affected inhabitants nor paying appropriate compensation.
The Energy injustice is crystal clear in some rural and remote areas, particularly in African and other developing countries, in which the residents are suffering from a lack of electricity access and/or essential petroleum products unlike the situation in central areas and zones.
According to the “ENERGY PROGRESS REPORT” issued by the World Bank in 2021, 759 million people still live without electricity, and there remain some 2.6 billion people who cook mainly with polluting fuels and technologies, using traditional stoves fueled by charcoal, coal, crop waste, dung, kerosene, and wood. Most of these communities live mainly in rural areas in Asia and Sub-Saharan Africa. The economic costs of household reliance on these traditional fuels are estimated to negatively affect the surrounding environment and health, lose the productivity of women and losing the opportunity to receive good education and jobs.
Another clear application of energy injustice is derived from the fact that some natural resources rich countries are suffering from poverty, despite the considerable revenues yield from the exploitation of their natural resources. This is known as “Natural Resources Curse”. Such a situation usually occurs in countries with low institutional quality and those who are suffering from internal disturbances. These countries usually lack transparency on the revenues received from companies in return for the exploitation of their natural resources.
Similarly, despite the technological advances in the whole chain of energy projects, in several occasions, such projects cause environmental damage onsite. Such a situation could be a possible threat for Energy Justice by potentially affecting basic human rights for the individual who are living or conducting their daily activities nearby the areas where such projects are executed.
In addition to the abovementioned challenges, that negatively affect Energy Justice, unequal distribution of subsidized energy products to individuals or small size companies who are suffering economically, is another aspect of energy injustice.
Energy Justice in Laws and Regulations
Notably, energy laws usually identify the aspects of Energy Justice associated with the exploitation of energy resources. It regulates the allocation of rights and duties and other considerations related to the ideal exploitation of energy resources by the host governments and the IOCs. However, there are different aspects relate to energy justice which may be scattered in areas of law as diverse as human rights, consumer protection law, international law and trade law, etc.
The concept of Energy Justice has been well developed, accepted and adopted by the United Nations “UN” appearing in the Sustainable Development Goals “SDGs”. “Affordable and clean energy” is the seventh goal of SDGs, it aims principally at expanding infrastructure and upgrading technology to provide clean, more efficient and cheap energy to the increased populations in all countries, yet explicit references to the ideas of Energy Justice and Equity are notably considered by the UN.
Apart from that, the Egyptian constitution issued in 2014, as an instance, includes a comprehensive legal framework that supports the general framework for the principle of Energy Justice, throughout the promotion of individual equality, human rights, achieving sustainable development through the ideal exploitation of natural resources, and environment protection against maritime, land and air pollution and other contaminations.
The treatment set by the Egyptian constitution with regards to the principles of Energy Justice paved the way for other internal legislations to align with the same principles accordingly. This has been shown apparently in the E&P contracts issued by virtue of private law, the Petroleum Law, the Environmental law and the Penal Act.
The Way Forward to Promote Energy Justice.
Energy Justice seeks basically to ensure the efficiency of any decisions that may be reached by the policymakers to the extent that do not harm the individual’s interests, ensure transparency on petroleum projects gains, guaranteeing the ideal exploitation of natural resources and achieving Energy Justice goals. Energy Justice, though, necessitates effective institutional monitoring. Moreover, it necessitates that communities must be involved in deciding about projects that will affect them.
Furthermore, it is quite important to effectuate the social responsibility for energy companies. The drivers of such social responsibility are the mix of incentives and requirements. Energy companies shall strive to minimize the environmental impact over the full life cycle of their operations in compliance with the applicable laws by using the advanced technology to that effect in order to ensure the stability, health, and prosperity of the communities in which they exist. Energy projects shall also promote locally manufactured goods and materials required for energy projects in addition to giving priority for nationals over foreigners on jobs.
On the other hand, host governments may apply some incentives in terms of providing tax credits to energy companies in return of the construction of roads, schools, bridges, hospitals in zones where the operations are taking place. Such actions indeed will have a positive impact on Energy Justice for communities who are affected by the operations of energy projects.
The Energy industry has faced a variety of concerns related to achieving Energy Justice. Environmental, economic and social concerns have been raised as barriers to achieving Energy Justice. The communities surround energy projects sometimes face environmental, health and safety risks, and poverty, which are integral part from the principle of Energy Justice.
Therefore, to achieve Energy Justice, the energy industry is expected to meet higher standards of performance and it is important to recognize that governments play an important role as well to maintain the Energy Justice protected.