Focus on Energy, 2010 - Karanovic & Nikolic

Slovenia in 2007. In the same year, discussions on the possible establishment of a new Forum on socialissues were held between the parties to the Treaty which consequently lead to the adoption of the“Memorandum of Understanding on Social Issues” which envisaged the possibility of the establishmentof the “Social Forum”. The “Social Forum” considers the social impact of energy market reform. The first“Social Forum” took place in November 2008. At its December 2008 meeting, the Ministerial Councildecided to extend the scope of the Treaty on the oil sector and to establish an “Oil Forum”. Pursuant tothe aforementioned decision, the “Oil Forum” is to advise the Energy Community on issues related tothe oil sector. It is envisaged that “Oil Forum” will meet annually. The first “Oil Forum” was convened inSeptember 2009.The SecretariatThe Secretariat is based in Vienna and it provides amongst other things, administrative support to theother institutions of the Energy Community. It co-ordinates the donor activities and it monitors the properimplementation of Treaty obligations by the parties. It then submits yearly progress reports to the MinisterialCouncil and performs the day to day activities of the Energy Community. The Secretariat has a Directorthat is appointed by the Ministerial Council. The Director of the Secretariat or a nominated alternate assistsat the Ministerial Council, the Permanent High Level Group, the Regulatory Board and the Forums.Decision Making ProcessThe Energy Community takes measures in the form of decisions which are legally binding and recommendationswhich have no binding force. Measures relating to the application of the acquis communautairecan be taken by the Ministerial Council, the Permanent High Level Group or the RegulatoryBoard only upon a proposal of the European Commission. Measures related to the other core activities(such as the creation of a specific regulatory framework for an efficient regional energy market and thecreation of a single energy market) can be taken by the same bodies upon the proposal of a party to theTreaty including the Secretariat in the case of measures for the creation of the single energy market.The measures are adopted either by a simple majority (as is the case with the decisions relating to theapplication of acquis communautaire), or by a two-thirds majority (as is the case with the decisionsrelating to the creation of a specific regulatory framework for efficient regional energy market), or byunanimity (as is the case with the decisions relating to the creation of the single energy market). Internalaffairs, such as organizational, budgetary and transparency issues of the Energy Community areregulated by procedural acts.The parties to the Treaty are obliged to implement decisions adopted by the Ministerial Council, the PermanentHigh Level Group or the Regulatory Board (that are addressed to them) in their domestic legal system.A failure to comply with this obligation may be brought to the attention of the Ministerial Council byany party, the Secretariat or the Regulatory Board. Whether or not there has been a breach of obligationsof the parties is determined by the Ministerial Council. In the event of serious and persistent breaches bya party of its obligations, the Ministerial Council may, acting by unanimity, suspend certain rights grantedto the noncompliant party under the Treaty, including the suspension of voting rights and the offendingparty’s subsequent exclusion from meetings or other such mechanisms provided for in the Treaty.7FOCUS ON ENERGYIn practice, the above mechanism started to apply after the Rules of Procedure for Dispute Settlementunder the Energy Community Treaty (the “Dispute Rules”) had been adopted in June 2008 1 . From15 October 2009, the Secretariat has received five complaints out of which one was levelled againstSerbia, one against Bosnia and Herzegovina and three against Macedonia. It is worth mentioning thateach complaint has been initiated by private bodies. According to the aforementioned Dispute Rules,upon receiving a complaint, the Secretariat assesses the merits of a case and decides whether to initiatea formal procedure. If the respective country, as a reply to the complaint, harmonises its legislation andpractice so that it is in line with the Treaty and if that is satisfactory to both the complainant and to theSecretariat, then the case is closed without the initiating of a formal procedure. So far, the only formalprocedure initiated to date has been against Macedonia.1 Procedural Act No. 2008/01/MC-EnC dated 27 June 2008.