1. Energy security is a major concern of countries in North-East Asia. To address this concern, subregional cooperation is one of the effective approaches that could contribute towards the improvement of energy security in North-East Asia by increasing the energy supply within the subregion with a view to reducing dependency on energy resources from outside the subregion.

2. Access to and development of sustainable and affordable energy resources is an essential precondition for sustainable economic development in North-East Asia.

3. Whereas national reserves of energy resources as well as current levels and patterns of energy production and consumption differ considerably between countries, North-East Asia also offers significant potential for mutually beneficial intercountry cooperation in energy sector development and energy trade and exchange.

4. Collaborative approaches are expected to facilitate energy sector infrastructure development and enhance efficiency in energy utilization. Projects to be promoted will offer all concerned parties tangible and fair shares in project benefits, taking into account fair returns on investments and the related risks.

5. The geographical scope of the Intergovernmental Collaborative Mechanism shall be defined as the areas under the jurisdiction of the following countries: China, the Democratic People's Republic of Korea, Japan, Mongolia, the Republic of Korea and the Russian Federation.

6. Other countries and relevant international institutions that have interest in and are committed to furthering cooperation in sustainable energy development in North-East Asia may be invited as observers or to join selected activities and provide technical and financial support, as necessary.

7. The Intergovernmental Collaborative Mechanism for Energy Cooperation in North-East Asia has the vision: "By 2020, improved energy security in North-East Asia through energy cooperation in a sustainable manner" with the following objectives:

. To increase the supply of energy in the North-East Asian subregion, lessening its dependence on energy imports from outside the subregion;
. To optimize the economy and efficiency of the supply and use of energy;
. To minimize the environmental impact of energy production and consumption through an improved energy mix and greater energy efficiency.

8. Consistent with the vision and the objectives, the Intergovernmental Collaborative Mechanism shall be based on the agreed principles described below.

1. Recognition of sovereign rights over energy resources

9. The parties shall recognize State sovereignty and sovereign rights over energy resources.

10. Rules in each country concerning property ownership over energy resources shall not require changes.

11. Each country shall continue to hold the right to decide the geographical areas within its territory to be made available for the exploration and development of its energy resources, the right to regulate the environmental and safety aspects of energy projects, and the right to specify taxes, royalties or other financial payments.

2. Development of free and fair trade

12. The participating countries in North-East Asia shall agree to promote access to international energy markets on commercial terms for all energy products. Regulations in each country governing energy trade should be open and transparent and should not discriminate on the basis of the national origin of energy products.

13. The participating countries shall recognize that the development of energy networks within the subregion involves the need to develop regulations concerning the transit of energy products. Such regulations should be consistent with the principle of freedom of transit and should not distinguish as to the origin, destination or ownership of such energy products. Furthermore, transit rights should not be subject to the imposition of unreasonable delays, restrictions or charges.

3. Investment promotion and protection

14. The participating countries shall agree on the necessity to encourage and create stable, equitable, favourable and transparent conditions for investors in energy projects throughout the North-East Asian subregion.

15. The participating countries in North-East Asia should, as far as possible, accord investment from other countries no less favourable treatment than that which they accord to their own investors. Existing restrictions affecting investors from other countries of the region should be progressively removed.

16. Investments from other countries should not be nationalized or expropriated except where this is: (a) for a purpose in the public interest; (b) not discriminatory; (c) carried out under due process of law; and (d) accompanied by the payment of compensation.

4. Addressing special needs and collaboration in emergencies

17. The participating countries would recognize the current differentiated levels of economic development in the North-East Asian region and consider special support for countries in need of capacity-building activities and technical assistance projects.

18. The participating countries would consider opportunities for cooperation to improve energy security at the national and subregional levels in order to hedge against the economic impact of energy supply disruption.

5. Environmental protection

19. The participating countries would agree that cooperation is necessary in order to use energy efficiently and to promote enhanced utilization of renewable energy and energy-related environmental protection. This could include: (a) ensuring, in a cost-effective manner, consistency between relevant energy policies and environmental protection; (b) a fuller reflection of environmental costs and benefits in energy pricing; (c) the creation of appropriate conditions for the exchange of know-how regarding environmentally sound technologies and the efficient use of energy; and (d) the creation of appropriate conditions for profitable investment in energy efficiency and renewable energy projects.

20. The participating countries would welcome initiatives, programmes and projects that are being undertaken at the national level by the countries in the subregion in order to mitigate emissions from energy production and consumption that can harm the environment.

21. The participating countries would collaborate and cooperate with the North-East Asian Subregional Programme on Environment Cooperation and its Government Body, as this Programme has the same geographical scope and was established for complementary sustainable development objectives.

8. Consistent with the vision and the objectives, the Intergovernmental Collaborative Mechanism shall be based on the agreed principles described below.

1. Recognition of sovereign rights over energy resources

9. The parties shall recognize State sovereignty and sovereign rights over energy resources.

10. Rules in each country concerning property ownership over energy resources shall not require changes.

11. Each country shall continue to hold the right to decide the geographical areas within its territory to be made available for the exploration and development of its energy resources, the right to regulate the environmental and safety aspects of energy projects, and the right to specify taxes, royalties or other financial payments.

22. The participating countries shall identify and implement collaborative projects to contribute to the achievement of the vision of the collaborative framework.

23. Projects and activities to be launched within this Intergovernmental Collaborative Mechanism shall facilitate the exchange of information on national plans, programmes and regulatory frameworks in promoting investment for the development of energy production and promoting sustainable energy consumption.

24. Subregional multilateral projects to be coordinated within the Intergovernmental Collaborative Mechanism may also include joint (pre) feasibility assessments for energy infrastructure and cross-border energy trade.

25. Projects and activities selected for implementation shall be in the common interest of three or more participating countries.

26. Appropriate capacity-building activities, group training, study visits and seminar measures may also be conducted within the Intergovernmental Collaborative Mechanism. The necessary financial resources should be made available for the required sponsorship of selected activities.

27. Noting that other regional initiatives on energy cooperation exist, activities of the Intergovernmental Collaborative Mechanism should take into consideration of activities and outcomes of these initiatives.

28. The participating countries shall establish a Senior Officials Committee for Energy Cooperation in North-East Asia (hereinafter referred to as the "Committee") as the leading decision-making and governing body of the collaborative framework. The Committee shall provide overall policy guidance and establish working groups, as required, as well as a Committee secretariat. The Committee shall define the projects to be undertaken and approve their budgets, solicit the financial support required, monitor implementation and supervise the management of activities.

29. The Committee shall comprise at least one senior government official in charge of subregional energy cooperation from each of the participating countries. Non-member countries or international organizations may be accepted as observers subjected to the decision of the Senior Officials Committee.

30. The Committee shall decide on its agenda, which may include information exchange to improve energy security, such as energy policies and programmes, investment policies to promote sustainable energy development; fiscal policies related to energy industries, analysis of trends in national and subregional energy markets; the development and implementation of collaborative projects, legal and institutional arrangements to cope with oil supply disruption, emergencies, transboundary energy development and trade in fossil fuel and electric power; cooperative policies and measures to promote energy efficiency and energy resource conservation; and collaborative activities to promote greater utilization of renewable sources of energy.

31. The decisions of the Committee shall be made by consensus of its members.

32. The meetings of the Committee should, in principle, be held annually in one of the participating countries, on a rotating basis (hereinafter referred to as the "regular meetings").

33. If possible, the venue and dates for the regular meeting shall be decided at the previous meeting.

34. Upon request of a participating country, the Committee may also meet on an ad hoc basis, provided that parties support such a request by consensus. Ad hoc meetings of the Committee shall be hosted by the country proposing the ad hoc meeting.

35. The Committee shall normally be chaired by the member hosting the meeting.

36. The Senior Officials Committee on Energy Cooperation in North-East Asia shall establish, as necessary, task forces or working groups as subordinate bodies of the Committee. The Committee shall initially establish a working group on energy planning and policy as the leading working group to initially cover broad perspectives of policy coordination issues towards improved energy security and to act as a nodal point. As directed by the Committee, other working groups may be established on specialized subjects, including but not necessarily limited to the following: (a) investment policies; (b) electric power development and interconnection; (c) interstate trade in and transit of fossil fuel; (d) energy efficiency; and (e) renewable energy, including hydropower and wastes to energy.

37. Working groups may be established on a temporary basis and may be mandated by the Committee for specific designated tasks.

38. The Committee shall define the terms of reference for each working group. The Committee shall appoint the chairpersons of the working group. Chairpersons shall be appointed for a period of one year with the possibility of reappointment.

39. The working groups shall conduct their tasks as mentioned and report to the Committee.

40. Working groups shall consist of (a) two focal points appointed by the Committee (designated official and/or national experts) per participating country; (b) focal points appointed by Governments of North-East Asia; and (c) focal points as deemed appropriate by the Chairperson of each working group or the Committee secretariat.

41. All working groups or project task forces shall adopt their reports and recommendations by consensus.

42. The Committee will have a secretariat to prepare and facilitate its meetings and the consultative work of the subsidiary working groups.

43. For the start-up phase and the first three years following the initiation of the collaborative framework, the participating countries may invite the United Nations and its Economic and Social Commission for Asia and the Pacific (ESCAP) to assist as interim secretariat for the Committee and its subsidiary working groups.

44. The chairperson of the Senior Officials Committee may, on behalf of the participating countries, request the ESCAP secretariat to assume the functions of the interim Committee secretariat with adequate budgetary resources to discharge this task effectively.

45. The participating countries may consider the organizational and financial arrangements for the Committee secretariat/interim Committee secretariat.

46. The Government of the participating country hosting the regular or ad hoc meetings of the Committee and/or the meetings of working groups will in general be expected to cover all costs and expenses required during the meetings, except for the travel expenses of visiting participants.

47. In principle, the participation in the institutional arrangements should be financed by each country. At least during the first three years following the establishment of the Intergovernmental Collaborative Mechanism, provision of financial support for parties from developing countries and countries with economies in transition may be made available upon request from supporting countries/projects.

49. The participating countries shall also make efforts to mobilize domestic financial sources to finance the agreed activities of the Committee, the Committee secretariat/interim Committee secretariat and working groups.

50. The Intergovernmental Collaborative Mechanism and the arrangements contained herein were adopted by the Senior Officials attending the first session of the Senior Officials Committee on Energy Cooperation in North-East Asia on 17 November 2005.