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India seeks observer status

India has upped the ante in oil diplomacy initiatives with the government initiating a process to secure the status of an ?observer? in the highly influential Energy Charter Treaty (ECT).

india Updated: May 27, 2006 02:44 IST

India has upped the ante in oil diplomacy initiatives with the government initiating a process to secure the status of an ‘observer’ in the highly influential Energy Charter Treaty (ECT).

The ECT, signed in December 1994, provides the broadest multilateral framework of rules under international law governing energy cooperation. Currently, it has more than 50 members comprising several European countries, Russia and its former republics.

Pakistan, China, USA, Saudi Arabia, UAE and many other oil-rich African and Latin American countries including Venezuela and Nigeria have been granted observer status. As an observer to ECT, New Delhi hopes it can acquire significant leverage in executing transnational pipelines for import of natural gas.

Besides, India can also take part in policy discussions, access to all technical resources of the charter, gain knowledge from the assimilation of experience of different countries in energy trade related issues. The Petroleum Ministry had submitted a note to the Cabinet for India joining the ECT as an observer in October last year and the matter has since been referred to the National Security Council (NSC).

The Petroleum Ministry had made a detailed presentation to the NSC last month. The ministry is also examining the provisions of dispute resolution under the ECT and how they compare with the ones under existing bilateral international trade agreements.

The NSC has also asked the Petroleum Ministry to list out the possible disadvantages of becoming a member of the ECT.

Though the Ministries of Home Affairs, Defence, Power, Law and Justice and the Planning Commission have voiced no objection to the proposed move, the Ministry of External Affairs has suggested for “careful consideration” while seeking full membership at a later date.

“While participation in ECT by India as observer could provide a platform for voicing India’s concerns in this respect when such rules are being framed by internationally recognised multilateral institution like ECT, perhaps it could also restrict our flexibility. These aspects did come up for discussion at the meeting with the NSC and the Ministry of Petroleum has been asked to suitably address these in the proposal that it puts up before the Cabinet,” sources said.