A British gas company is using a controversial treaty to sue Slovenia for insisting on protection for groundwater from fracking.

Lawyers for Ascent Resources have accused the Slovenian government of “arbitrary and unreasonable actions”. Letter

The company said its development of the Petišovci gas field in north eastern Slovenia had been delayed by five years and the amount of gas produced had been “very significantly reduced”.

Friends of the Earth Europe described the legal action as a “scandal”.

The cases centres on whether Ascent Resources should carry out an environmental impact assessment (EIA) on low volume fracking to release the gas.

Slovenia’s environment agency said an EIA was required because the operations were planned near critical water sources.

But Ascent’s lawyers argued that this contradicted other government agencies, which had concluded that an EIA was not needed.

The decision was upheld by the country’s administrative court in May 2020. But the case could see Slovenia paying tens of millions of euros in damages, under the Energy Charter Treaty.

The case emerged earlier this month at the second round of talks in Brussels, where the treaty is being renegotiated to take into account climate change.

140 MEPs and MPs have criticised the treaty in an open letter. They called for reform, saying the treaty was “neither consistent with the European Green Deal, nor with the proposed EU climate law”.

The UK and Slovenia are parties to treaty, which gives investors the right to challenge governments through parallel private courts, or investor state dispute settlement mechanisms.

Investors have the option of asking for millions of euros of public money in compensation from governments even if states pass or enforce legitimate environmental protection laws. Ascent Resources said investors had put more than E50 million into Slovenia.

Paul de Clerck, economic justice coordinator for Friends of the Earth Europe, said:

“It’s a scandal that, amid a climate and environmental emergency, a country like Slovenia can be sued for doing the right thing, protecting its water and environment from destructive fracking.

“This case demonstrates the treaty is out of time and the EU and its member states need to step out of it. The treaty has already facilitated attacks on climate policies in countries like Germany and France.”

Lidija Živčič, of Friends of the Earth Slovenia, said:

“Suing Slovenia for protecting our water and implementing our laws is outrageous. The effects of fracking are so dangerous to the environment and human health that many European countries, including Ireland, France and Bulgaria, have banned it altogether. We call on the Slovenian government not to give into this pressure.”

Updated 25/9/2020 to correct location of the gas field to north eastern Slovenia (from south eastern Slovenia).