How to Write a Law Essay for Your Masters Degree (Example)

Here is an example of a first-class degree law essay that was written by a post-graduate student reading LLM at a leading UK university.

Please explain the role of non-state actors in the regulation of the energy sector internationally, giving specific examples.

Regulation is no longer considered as the exclusive domain of the state and governments and the role of non-state actors in regulation is now widely acknowledged. Some non-state sources are new and represent a growth of regulation.  But many of the sources of regulation are  well  established,  they  have  existed  for  a  very long  time  in  one  form  or  another.  What is new is the growing recognition of these alternative sources as regulation, their formal  co-option  by  the  state  and  an  increasing  co-ordination  of  activities  between various regulatory sources.

Non-state actors may provide regulation for climate change, environmental issues, and human rights and may even encompass specific self-regulation of an entire sector. For example, the Institute of Nuclear Power Operations (INPO) is a non-state actor that regulates the US nuclear power industry. The INPO was established as a wholly private organisation funded by energy companies themselves in direct response to the ‘Three Mile Island’ incident. The INPO now develops standards and conducts regular inspections of nuclear power plants.

International energy flows and their governance is not a recent phenomenon. Beginning in the 1960, a group of energy-related international governance institutions were created by the international community.  Yet,  the  growing  strategic  importance  of  energy,  given  its  scarcity  value, has  accelerated  this  trend  and  has,  at  the  same  time,  thrown  up  unprecedented  challenges  for conventional   understandings   of   governance.

According to Scholte of Scholt Energy Control BV, the emergence of a globalised polity and economy has been witness to the formation of a number of multilateral  inter-governmental  arrangements,  where  “states  have  chosen  collective  regulation  over  a unilateral   approach”.   Goldthau  and  Witte of Harvard University maintain that the   growing   institutional   architecture   for   global   energy governance  covers  key  aspects  of  energy  development  and  transaction  including  management  of short-term  supply  risks,  financing,  trading,  hedging  of  ventures,  energy  investments,  and  trade arrangements . Energy  institutions  can  go  a  long  way  in  reducing transaction  costs  in  inter-state  interactions  and  in  creating  competition  and  a  level-playing  field  for commercial actors. However, we must ask the question why do international institutions develop and why do states choose to become part of an institution, submitting authority and complete sovereign control? Abbott and Snidal of Arizona University, maintain that two  characteristics  of  institutions, “centralization  and  independence…create  an inclination amongst countries to create institutions or become participating members”.

International  institutions  facilitate  centralisation  of  activities  that  require  collective  action  and  thus provide for their effective conduct. They allow communication and decision making on concerns that countries share, and emerge as a pivot around which international responses are determined and administered.   The   International   Renewable   Energy   Agency   (“IRENA”),   for   instance,   facilitates exchange  of  knowledge  on  renewable  energy  development,  with  countries  having  agreed  that  they seek   to   advance   renewable   energy   development   and   deployment   domestically,   and   through international  cooperation  establish  a  sustainable  energy  supply  system.  The  World  Bank  which provides  technical  and  financial  assistance  to  developing  countries  to  ameliorate standards of  living and meet development objectives, also addresses issues of energy poverty and finances development programmes that target improvement in energy access and availability of clean and safe fuels. As is the case  with  the  World  Bank,  member  states  often  employ  an  institution  as  an  agent  for  pursuing activities perceived to be in the interest of the participating community of states. The centralisation of activities that institutions allow can also serve a defined  ‘coalition of interests‘, for  example  in  the  case  of  Organisation  of  Petroleum  Exporting  Countries  (“OPEC”)  and  the International  Energy  Agency  (“IEA”).

Similarly,  inter-governmental  multilateral  energy  institutions  give  voice  to  weaker  and vulnerable  countries.  While  it  is  possible  that  constitutional  and  decision-making  procedures  in international  institutions  be  weighted  in  favour  of  powerful  developed  countries,  an  institutional structure  based  on  the  sovereign  equality  of  states,  coupled  with  appropriate  decision-making procedures,  may  often  offset  power  imbalances  in  the  international  system.  The United Nations Framework Convention on Climate Change (“UNFCCC”) is a forum where the demand for transfer of clean technologies to developing countries, and support for adaptation and mitigation action, has been highlighted  by  groups  of  developing  member  states.  Consensus-based decision-making  at  the UNFCCC has lent bargaining power to small economies and island nations.

Financial institutions such as commercial banks have a direct role in energy regulation through project financing and the Equator Principles. The Principles serve as a checklist for financial institutions before acting as lenders in project financing. The Principles apply to any new project with a capital cost of US$ 10 million or more and require an Environmental and Social Assessment (ESA) under Principle No.2 to evaluate the environmental impacts and the effects on local communities. The Principles can be classified as a form of “incentive based regulation” This is because, by conforming to the Principles, banks may form alliances with NGOs which would be favourable for business and a win-win situation for both parties.

Through their independence,  institutions  can  act  with  a  degree  of  autonomy  in  a  defined  issue area.  Abbott and Snidal argue that once  an  institution  is  created  and  norms  and  rules  are  earmarked,  while  constituent  member states can reflect on the mandate of institutions and often powerful states may be able to intervene in their functioning, the participation of an international institution as an independent / autonomous body in any international function, increases efficiency and lends legitimacy to action. The International Atomic Energy Agency (IAEA), an inter-governmental arrangement that brings together political and technical resources has been accorded the ‘legitimacy‘ to promote the safe  and  efficient  use  of  nuclear  energy  across  the  world,  and  to ensure  the  enforcement  of  safety measures and safeguards in nuclear facilities of  member countries. The  IAEA is a watchdog for the international  community  that  prevents  the  proliferation  of  nuclear  weapons  and  promotes  use  of nuclear energy for peaceful purposes. Technical bodies such as the IAEA and the UNFCCC also have the  wherewithal  to  bring  new  issues  of  relevance  to  member  countries  for  consultation  and  action, and undertake independent reviews of countries‘ policies.  The Kyoto Protocol includes monitoring and compliance procedures to ensure that countries are  complying  with  their  commitments  to  the  UNFCCC.

Non-state Institutions  also  function  as  neutral  arbiters in  cases  of  conflict  amongst  parties. They may, according to Abbott and Snidal of Arizona University, “mediate between the parties and facilitate discussion on a mutually agreeable solution, or provide a hearing to all interested parties and issue a binding decision”.  Institutions often have the provision for constitution of ad hoc expert panels or provide for a dispute settlement mechanism. The dispute settlement mechanisms under the Energy Charter Treaty, for example, include state arbitration for disputes between parties to the treaty; investor state arbitration for investment-related disputes; a special conciliation mechanism for transit-related disputes; a mechanism for trade disputes (modeled closely along the lines of the WTO and employed when one of the parties to the dispute is not  a  WTO  member);  and  bilateral  and  multilateral  non-binding  mechanisms  for  consultation  for cases related to competition and environmental protection respectively.

In conclusion, following the aforesaid, non-state actors play a vital role in energy regulation. A collection of independent institutions deal with manifold issues facing the energy sector such as financing and environmental aspects which helps to achieve uniformity and standardisation in the energy market that is not country or state specific. This in turn, helps to centralise energy regulation and achieve a degree of efficiency. Nonetheless, compliance with non-state actors remains an issue to be addressed in order to give full-weight to these organisations. Nonetheless, independent, non-state organisations are implementing measures and penalties to ensure compliance by energy companies. More so, the increased recognition of non-state actors, provides a degree of pressure to energy companies to comply.