Dutch Minister of Climate and Energy Rob Jetten on Wednesday said that The Netherlands would withdraw from the Energy Charter Treaty due to conflict between the treaty and the Paris climate accord.

The Treaty which came into force in 1998, has more than 50 signatories including the European Union, gives energy companies the right to sue host governments and seek compensation for policies that harm their investments.

But in recent years it has been used by fossil fuel and renewable energy companies to sue governments for regulatory changes that threaten returns on specific investments.

It is a legally binding multilateral treaty in the international energy field. The treaty aims to secure regional energy supply and provide protection for multinational energy companies, especially fossil fuel companies.