Research Of The Energy Cooperation Legal Construction In The Shanghai Cooperation Organization

Energy security and energy policy have been key issues in countries' development policies for decades. Energy matters are considered to be of vital importance for the countries' socio-economic development. That is the reason why energy cooperation is one of the most significant in international relations, and the legal and normative regulation of energy issues allows the states to legally insure their energy interests.The Shanghai Cooperation Organization(SCO) is an international intergovernmental regional organization that emerged in the beginning of the 21 st century and since that time has been gaining importance not only on the regional level, but also on the global scale. Initially, it was established as an organization for regional stability and security of its member states China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. However, soon after the creation the framework of its activities expanded to other areas such as trade, economy and energy. The member states, besides cooperation in security matters, considered the Organization as a platform for fruitful cooperation in economic affairs, including energy. The SCO official and unofficial institutions have been involved in discussions, negotiations and cooperation concerning the energy sphere. Russia as one of the world's largest energy exports has been promoting closer energy cooperation within the SCO. China, the world's largest energy importer, is interested in securing and diversifying its energy supply. India, another large energy importer, will join the Organization in 2016. Iran, an energy exporter, has the Observer Status and after having the Western sanctions lifted has real chances of becoming a full member in future. Therefore, energy cooperation in the SCO has a great deal of potential. However, besides potential the Organization need legal and normative basis and related institutions for the member states to be able to effectively realize bilateral and multilateral projects in energy sphere. The member states have made attempts to organize and regulate their energy cooperation in the SCO such as the establishment of the SCO Energy Club. So far, these efforts have not be sufficient for establishing an effective mechanism of energy cooperation in the Organization. This thesis analyses the legal issues of the SCO in energy area, normative and legal acts that have been adopted by the Organization and its members in the energy area and makes attempts to find solutions to develop a mechanism of energy cooperation among the SCO countries that would allow them to realize mutually beneficial and regulated energy cooperation and even create a self-sufficient energy space.The first chapter of the thesis is an introduction to the SCO and energy cooperation among its members. It introduces the history of establishment, main goals and structure of the SCO. It analyses the prerequisites for energy cooperation among the member states such as their geographic proximity, Chinese intention to diversify energy supplies, Russian promotion of energy cooperation within the SCO. It shows the changes in overall territory, population, nominal GDP and main energy characteristics that will occur when India and Pakistan will join the Organization and if Iran and Mongolia join it. The chapter points out the articles and mentioning of economic and energy cooperation in the main SCO documents such as Dushanbe Declarations, Yekaterinburg Declaration, the SCO Development Strategy Until 2025.The second chapter concerns the forms of collaboration and cooperation in the energy sector. In order to understand the development of energy cooperation among the SCO members, it is essential to research and review the legal and normative base of energy policy in each member state, in particular the leaders of the Organization China and Russia. This chapter analyses bilateral relation between China and Russia, China and Central Asia, the legal basis for Chinese and Russian energy policies in the world and in the SCO region in particular such as Chinese Energy Development Strategy Action Plan 2014-2020 and Russian Energy Strategy Until 2030. It also concerns the energy policy of Central Asian countries and the legal basis for their cooperation with China and Russia.Moreover, this chapter reviews multilateral energy cooperation within the SCO such the SCO Energy Club, proposed by Russia, and established by the SCO to facilitate energy cooperation in the area; and Asian Energy Strategy, suggested by Kazakhstan. The chapter concentrates on the political and economic challenges that the SCO countries have to face such as the competition of China and Russia for the leading role in the organization, geopolitical struggle, enlargement issues and some internal challenges.The third chapter presents a comparison of the SCO and Eurasian Economic Community(EEU) energy cooperation. The EEU has been more successful than the SCO in creating a common energy space, providing the legal basis for energy cooperation of its members, including legal institutional support such as the Court of Eurasian Economic Union. Since the membership composition of the two organizations is similar, with China being the only non-EEU member in the SCO, the member states of the SCO could use the EEU experience in energy affairs.The fourth chapter concerns the decision-making procedures and dispute settlement mechanism in the SCO such as consultations and negotiations, enforcement mechanism. It also touches the topic of dispute settlement in energy sphere. Since the SCO does not have any mechanism with legally binding power to resolve disputes in the energy sphere it could use the suggestions prepared by Russia, an experienced energy actor, for the Energy Charter Treaty to implement in the SCO regulatory framework.