Asian Countries and the Arctic Future 981464417X, 9789814644174

Table of contents :
Contents
List of Tables and Box
List of Figures
List of Abbreviations
About the Editors
About the Contributors
Introduction
Introduction: Nordic Perspectives on Asia’s Arctic Interests
Part 1 Governance and Cooperation
Chapter 1 Adaptive Governance for a Changing Arctic
The changing Arctic
An Arctic governance mosaic
Integration and adaptive capacity
Implications for China and other non-Arctic states
A concluding thought
References
Chapter 2 The Arctic Governance and the Interactions between Arctic and Non-Arctic Countries
Regional public goods bearing on performance of Arctic governance
The Arctic Council and the member countries’ tactics of incorporating extra-regional factors
Arctic governance: Exclusiveness and inclusiveness
Tactics and diplomatic practices of the Arctic countries
The significance and responsibility of non-Arctic countries’ participation in the Arctic affairs
Extra-regional participation: Beneficial for improving the governance system and realizing goals of governance
How do non-Arctic countries substantiate their self-interest and bear their responsibility?
References
Chapter 3 Can Asian Involvement Strengthen Arctic Governance?
Arctic stakes of Asian states
Arctic sovereign rights
The Arctic Council and the indigenous voice
Asian involvement and Arctic governance
Conclusions
References
Chapter 4 High North: High Politics or Low Tension? Cooperation and Conflict in the Arctic
Analyzing cooperation and conflict
Russia in the Arctic
China in the Arctic
The United States in the Arctic
Norway in the Arctic
Concluding observations
References
Chapter 5 Analysis of International Arctic Cooperation Mechanisms among the Nordic Countries
The Nordic countries’ Arctic cooperation mechanisms of the on non-traditional security issues
The Arctic Council
The Nordic Council of Ministers
The Barents Euro-Arctic Council
The EU’s Northern Policy and Arctic Policy framework
The integration efforts of the Nordic countries towards traditional security issues in the Arctic
NATO-involvement in Arctic affairs
The attempt to integrate Nordic security and defense
Concluding remarks: Lessons for Asian newcomers
References
Part 2 Economic Development
Chapter 6 International Use of the Northern Sea Route — Trends and Prospects
Yamal LNG
Conclusion
References
Chapter 7 A Comparative Study of the Administration of the Canadian Northwest Passageand the Russian Northern Sea Route
The current status of the Northwest Passage and the Northern Sea Route
Why the Arctic Passage matters
Conditions for commercial shipping
Comparative study of the Canadian and Russian Arctic sea route administrations
Sovereignty claims over the Arctic Passage
Trade-offs between economic interests and sovereignty claims to the Arctic Passage
Arctic seaways navigation prospects from the Canadian and Russian perspective
Arctic seaways navigation prospects from the Canadian and Russian perspective
Canada and Russia’s waterways administration from a military-strategic perspective
The Environmental perspective of Canadian and Russian administration of the Arctic Passage
Conclusion
References
Chapter 8 Governance and Ownership of the Arctic Ocean: Living Resources and the Continental Shelf
Research questions, method and structure of article
The basic legal framework
Empirical investigation
Case 1: The delimitation of the extended continental shelves
Case 2: The management of living resources in the high seas of the Arctic Ocean
Discussion and implications for Asia
References
Chapter 9 Arctic Mining: Asian Interests and Opportunities
Demand: Asian mineral import and FDIs
Supply: Arctic mineral production
Is there an Asian interest for mining in the Arctic?
Factors influencing future opportunities
Concluding remarks: More to come?
References
Part 3 Asia in the Arctic
Chapter 10 Japan’s Arctic Policy Development: From Engagement to a Strategy
The period of individual projects: Activities in the Arctic until the 1990s3
The Svalbard Treaty
Arctic research and observation
International Northern Sea Route Program (INSROP)
Kalaallit Nunaat Marine Seismic (KANUMAS) project
The aspects of Arctic policy of Japan after the millennium
Ministry of Education, Culture, Sports, Science and Technology (MEXT)
Ministry of Foreign Affairs (MoFA)
Ministry of Land, Infrastructure and Transport (MLIT)
Headquarters for Ocean Policy at the Prime Minister’s Office
Ministry of Economy, Trade, and Industry (METI)
Advancement and prospects of Japan’s Arctic policy
References
Chapter 11 India’s Arctic Attention
Asia and the Arctic
India and the Arctic
India’s Arctic attention
India’s policy in the Arctic
Arctic and Asia: A scientific enterprise
Conclusion
References
Chapter 12 Asian Economic Interests in the Arctic — Singapore’s Perspective
Economic implications of a melting Arctic
Singapore benefits from East Asia’s economic boom
Will new sea routes via the Arctic affect Singapore’s relevance?
Singapore’s interest in joining Arctic development
Conclusion
References
Chapter 13 Changes in the Arctic and China’s Participation in Arctic Governance
The rapidly evolving Arctic
Multi-level Arctic governance and international cooperation
China’s interests in the Arctic and its course of participation in Arctic governance
The Chinese government’s stance and attitude towards Arctic governance
Arctic governance and the responsibilities of China as a great power
References
Chapter 14 The Cooperation and Competition between China, Japan, and South Korea in the Arctic
China, Japan, and South Korea’s present involvement in Arctic affairs
The Arctic policies of China, Japan, and South Korea
The current status of China, Japan, and South Korea’s Arctic affairs’ affiliations
Lessons from economic cooperation
Asian bilateral and trilateral cooperation on Arctic issues
Features of Arctic governance influential on the Asian countries
Room for increased cooperation between China, Japan, and South Korea’s on Arctic issues
The necessity to strengthen Arctic-affairs cooperation between China, Japan, and South Korea
Complementary factors promising for increased trilateral cooperation
Recommendations for the participation of China, Japan, and South Korea in Arctic affairs
Principles influencing China, Japan, and South Korea’s Arctic-affairs involvement
Specific recommendations for China, Japan, and South Korea’s involvement in Arctic affairs
References
Chapter 15 Findings and Challenges of the North Pacific Arctic Conference
Findings
New initiatives
Future challenges
References
Chapter 16 The Future of the Arctic and the Asian Countries: Concluding Remarks
Governance
Economic opportunities
Asian countries
A future of conflict or cooperation?
References
Index

Citation preview

Asian Countries and the Arctic Future

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Asian Countries and the Arctic Future Editors

Leiv Lunde The Fridtjof Nansen Institute, Norway

Yang Jian Shanghai Institutes for International Studies, China

Iselin Stensdal The Fridtjof Nansen Institute, Norway

World Scientific NEW JERSEY

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LONDON

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SINGAPORE

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BEIJING

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SHANGHAI

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HONG KONG

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TA I P E I

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CHENNAI

2/12/14 1:40 pm

Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE

Library of Congress Cataloging-in-Publication Data Asian countries and the Arctic future / [edited by] Leiv Lunde (The Fridtjof Nansen Institute, Norway), Jian Yang (Shanghai Institutes for International Studies, China) & Iselin Stensdal (The Fridtjof Nansen Institute, Norway). pages cm Includes bibliographical references. ISBN 978-9814644174 1. Asia--Foreign relations--Arctic regions. 2. Arctic regions--Foreign relations--Asia. 3. Geopolitics--Arctic regions. I. Lunde, Leiv, editor. II. Yang, Jian, 1962 December 6– editor. III. Stensdal, Iselin, editor. IV. Young, Oran R. Adaptive governance for a changing Arctic. Container of (work): G615.A78 2015 327.09163'2--dc23 2015007459

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. Copyright © 2016 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher.

In-house Editors: Dong Lixi/Chandrima Maitra Typeset by Stallion Press Email: [email protected] Printed in Singapore

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Contents

List of Tables and Box

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List of Figures

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List of Abbreviations

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About the Editors

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About the Contributors

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Introduction

YANG Jian

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Introduction:

Nordic Perspectives on Asia’s Arctic Interests Leiv Lunde

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Part 1

Governance and Cooperation

Chapter 1

Adaptive Governance for a Changing Arctic Oran R. Young

Chapter 2

The Arctic Governance and the Interactions between Arctic and Non-Arctic Countries YANG Jian

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Contents

Chapter 3

Chapter 4

Chapter 5

Part 2

Can Asian Involvement Strengthen Arctic Governance? Olav Schram Stokke

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High North: High Politics or Low Tension? Cooperation and Conflict in the Arctic Jo Inge Bekkevold

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Analysis of International Arctic Cooperation Mechanisms among the Nordic Countries CHENG Baozhi

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Economic Development

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Chapter 6

International Use of the Northern Sea Route — Trends and Prospects 107 Arild Moe

Chapter 7

A Comparative Study of the Administration of the Canadian Northwest Passage and the Russian Northern Sea Route ZOU Leilei and HUANG Shuolin

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Governance and Ownership of the Arctic Ocean: Living Resources and the Continental Shelf Njord Wegge

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Arctic Mining: Asian Interests and Opportunities Iselin Stensdal

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Chapter 8

Chapter 9

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Contents

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Part 3 Asia in the Arctic

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Chapter 10 Japan’s Arctic Policy Development: From Engagement to a Strategy Fujio Ohnishi

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Chapter 11 India’s Arctic Attention Uttam Sinha

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Chapter 12 Asian Economic Interests in the Arctic — Singapore’s Perspective CHEN Gang

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Chapter 13 Changes in the Arctic and China’s Participation in Arctic Governance ZHANG Pei and YANG Jian

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Chapter 14 The Cooperation and Competition between China, Japan, and South Korea in the Arctic GONG Keyu

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Chapter 15 Findings and Challenges of the North Pacific Arctic Conference Jong-Deog Kim

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Chapter 16 The Future of the Arctic and the Asian Countries: Concluding Remarks Iselin Stensdal

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Index

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List of Tables and Box

Table 1. Nordic countries’ Arctic Policies’ regional coordination mechanisms Table 1. Typology of Asian interests for minerals produced in the Arctic

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Box 1.

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Singapore’s oil industry: Facts and numbers

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List of Figures

Figure 1. Map of the Northern Sea Route Figure 2. NSR transit traffic 2010–2013, in million tons of cargo and in numbers Figure 3. NSR transit voyages 2011–2013, within Russia or international transits Figure 4. Number of NSR domestic transit voyages 2011–2013, by cargo Figure 5. Number of NSR international transits 2011–2013, by port of departure Figure 6. Number of international NSR transits 2011–2013, by port destination Figure 7. Number of international NSR transits, by composition of cargo

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List of Abbreviations

AACA ACAP AERC AFoPS AMAP AO APEC ASEAN ASEAN+3 AWPPA BEAR CAFF CCAMLR CLCS CNARC CNF CNPC DOD

Adaptation Actions for a Changing Arctic Arctic Contaminants Action Program Arctic Environment Research Center Asian Forum of Polar Sciences Arctic Monitoring and Assessment Programme Arctic Oscillation Asia-Pacific Economic Cooperation Association of Southeast Asian Nations Association of Southeast Asian Nations with China, Japan and South Korea Arctic Waters Pollution Prevention Act Barents Euro-Arctic Region Conservation of Arctic Flora and Fauna Convention on Conservation of Antarctic Marine Living Resources United Nations Commission on the Limits of the Continental Shelf China–Nordic Arctic Research Center China Nonferrous Metal Company China National Petroleum Corporation Department of Ocean Development, India

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EEZ EPPR EU FAO FNI FDI G20 G8 GDP GreenPeX IASC IEA IMO INSROP ISA JAMSTEC JOGMEC KANUMAS KORES LME LNG MARPOL METI MEXT MLIT MoFA Mtoe NASA

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List of Abbreviations

exclusive economic zone Emergency Prevention, Preparedness and Response Working Group European Union Food and Agriculture Organization of the United Nations Fridtjof Nansen Institute foreign direct investment Group of 20 Group of eight gross domestic product Greenland Petroleum Exploration Co. Ltd. International Arctic Science Committee International Energy Agency International Maritime Organization International Northern Sea Route Program International Seabed Authority Japan Agency for Marine-Earth Science and Technology Japan Oil, Gas and Metals National Corporation Kalaallit Nunaat Marine Seismic Project Korea Resource Corporation Large Marine Ecosystem liquefied natural gas International Convention for the Prevention of Pollution from Ships Ministry of Economy, Trade and Industry, Japan Ministry of Education, Culture, Sports, Science and Technology, Japan Ministry of Land, Infrastructure and Transport, Japan Ministry of Foreign Affairs million tons of oil equivalent National Aeronautics and Space Administration

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List of Abbreviations

NATO NCAOR NGO NIPR nm NPAC NPARC NSR NWP OCS OECD OPRF PAG PAME PGM POPs PPP PRIC R&D REE RFMO SAR SCALOP SCAR SDWG SIIS SOLAS UNCLOS UNFCCC WTO

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North Atlantic Treaty Organization National Centre for Antarctic and Ocean Research, India non-governmental organization National Institute of Polar Research, Japan nautical mile North Pacific Arctic Conference North Pacific Arctic Research Community Northern Sea Route Northwest Passage Outer Continental Shelf Organisation for Economic Cooperation and Development Ocean Policy Research Foundation Pacific Arctic Group Protection of the Arctic Marine Environment platinum group metals Persistent Organic Pollutants purchasing power parity Polar Research Institute of China research and development rare-earth element Regional Fisheries Management Organization search and rescue Standing Committee on Antarctic Logistics Scientific Committee on Antarctic Research Sustainable Development working group Shanghai Institutes of International Studies International Convention for the Safety of Life at Sea United Nations Convention on the Law of the Sea United Nations Framework Convention on Climate Change World Trade Organization

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About the Editors

Leiv Lunde was the Director of the Fridtjof Nansen Institute (FNI) from 2012 to 2014 and headed the AsiArctic project (www.asiarctic.no). His career spans research, policy analysis, and consulting as well as politics and policy-making in the Norwegian Ministry of Foreign Affairs. Lunde has been engaged in projects on Chinese energy and climate change policies and China’s role in the world since the mid-1990s. The geopolitics of energy, energy governance, and also governance for sustainability are key areas of research interest for Lunde, topics that are all central to the AsiArctic project. YANG Jian born in 1962, Vice President of SIIS. He received his doctorate in economics from Shanghai Academy of Social Sciences (SASS). His key areas of specialization include: the International Political Economy (IPE), China’s regional strategy in Asia, the cyber governance and the Arctic affairs. Prior to joining SIIS, Jian Yang was the Deputy Director of

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About the Editors

the Department of IPE in the Institute of World Economy, Shanghai Academy of Social Sciences (SASS), and served as the Deputy Secretary General of the Center for Taiwan Studies in SASS. From 2006 to 2008, he worked as a member of the editorial board for Review of Policy Research, a journal of the political section of the American Political Science Association. His published journal papers in recent years are: Exploring the Cyber Frontier: How the US Cyber Imperialism formed, International Review, No. 2, 2012. The Arctic Sea Routes: EU’s Policy Orientation and Diplomatic Practices, Pacific Journal, No. 4, 2013. Open Source Software: An Analysis on the Cyber Community as a Producer, World Economy Study, No. 1, 2012. The Structure of the US Dual Strategic Partnership System and Its Adjustments, Xiandai Guoji Guanxi (Contemporary International Relation), No. 10, 2011. Power Relationship and the Resource Distribution in the Cyber-space, International Relation Studies, No. 1, 2008. Jian Yang was also the author of the book, the Power and Wealth in Cyberspace (2012). Iselin Stensdal is a research fellow at the Fridtjof Nansen Institute. She has her education from the University of Oslo, Norway and Fudan University, Shanghai, China. In her research, she has covered extractive industries in the Arctic and Asian countries’ Arctic research. Other fields of expertise include China’s climate and energy policies.

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About the Contributors

Jo Inge Bekkevold, Senior Adviser and the Head of Centre for Asian Security Studies at the Norwegian Institute for Defense Studies, Norway. CHEN Gang, PhD, Research Fellow at the East Asian Institute of the National University of Singapore, Singapore. CHENG Baozhi, PhD, Research Fellow at the Institute for Global Governance Studies Member and the Center for Marine & Polar Studies of the Shanghai Institutes of International Studies (SIIS), China. GONG Keyu, PhD, Senior Fellow at the Institute for World Economy Studies and Deputy Director of the Center for AsiaPacific Studies of the Shanghai Institutes of International Studies (SIIS), China. HUANG Shuolin, Professor at the Shanghai Ocean University, China. KIM Jong-Deog, Director General of Strategy Research Division and Head of Polar Policy Research Center of Korea Maritime Institute (KMI), Republic of Korea.

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About the Contributors

Arild Moe, Vice Director and Senior Research Fellow at the Fridtjof Nansen Institute (FNI), Norway. Fujio Ohnishi, Assistant Professor at the College of International Relations, Nihon University, Japan. Uttam Sinha, PhD, Research Fellow at the Institute of Defence Studies and Analysis, New Delhi, and Adjunct at the Malaviya Centre for Peace Research, Benaras Hindu University, India. Iselin Stensdal, Research Fellow at the Fridtjof Nansen Institute (FNI), Norway. Olav Schram Stokke, Research Professor at the Fridtjof Nansen Institute (FNI) and Professor at the Department of Political Science, the University of Oslo, Norway. Njord Wegge, PhD, Senior Research Fellow at the Fridtjof Nansen Institute (FNI), Norway. YANG Jian, PhD, Vice President of Shanghai Institutes of International Studies (SIIS) and Senior Fellow at the Institute for Global Governance Studies at SIIS, China. Oran R. Young, Professor Emeritus at the Bren School of Environmental Science & Management at the University of California, Santa Barbara, United States. ZHANG Pei, PhD, Research Fellow at the Institute for Foreign Policy Studies and Deputy Director of the Center for Marine & Polar Studies of the Shanghai Institute of International Studies (SIIS), China. ZOU Leilei, Associate Professor at the Shanghai Ocean University, China.

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Introduction

The year 2013 was an important year for the Arctic and several key Asian coastal states. In May 2013, the Arctic Council held a conference of ministers in Kiruna, Sweden, accepting six countries, including China, India, Japan, Singapore, and South Korea as formal observers to the council. This is significant to enhance the status of the Arctic on the global agenda and allow Asian coastal states to play a positive role in Arctic affairs. In the past few decades, with aggravating climate change, the Arctic has seen a worrying ecological environment and a rise in economic opportunities. The geopolitics of the Arctic has thus entered a new active phase. Political activities of some states as well as non-state actors have increased. There is an intense political game regarding the responsibility and obligation-sharing of Arctic governance and the distribution of interests of Arctic resources. As a result of climatic warming and increased human activities in the Arctic, its nearly primitive environment and ecology face great challenges. Conflicts over resource exploitation and protection of natural and social ecologies are increasingly prominent. How to establish an effective institution to balance regional development and environmental protection is now a pressing issue. Furthermore,

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J. Yang

in this era of globalization, how to include external factors is also an important subject in Arctic governance. At the same time with the dramatic climate change in the Arctic, the enduring economic growth of Asian coastal states has drawn the world’s attention. Since the 1960s, Japan has spawned from the ruins of war like a phoenix and become the leader of the East Asian economies. In the following decade, the ‘small Asian dragons’ — South Korea, Singapore, Chinese Taiwan, and Hong Kong soon followed suit, illuminating China’s path to become the flying dragon. Decades of economic reform has assimilated China into the world market and facilitated the overall domestic social and economic development of China, making the East Asian continent an important engine of the world’s economic development. The rapid development of Indonesia, Malaysia, the Philippines, Thailand, and Vietnam in the 1990s show a sanguine development-prospect for the ASEAN region as a whole. India, with the second largest population in the world also has embarked on an elephant-like powerful pace of development. These Asian countries enjoy traditional oriental civilizations, but lost their previous development momentum due to inferior technologies and foreign invasions. But after World War II, especially after the Cold War, they have seen rapid development and made their own contributions to world economy. Some primary driving forces of their rapid economic development includes their fear of inferiority and their fervor to emulate the modernization of Western countries. The development of Asian countries included acquiring technology and production from developed countries, which they regard as a necessary step towards modernization. Therefore, western countries have moved large numbers of their production lines to Asian coastal countries, which have now become the

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world’s factory and face increasing demand for energy and resources. Prospects for exploration and exploitation of Arctic resource endowments make these Asian countries potential markets for Arctic products, such as oil, natural gas, minerals, and marine products. Because of the Asian’s countries’ large population, as well as the last decades’ wealth accumulation and people’s increased purchasing power, the Asian market has become where the hope lies for some Arctic countries’ future development. In addition to development in processing and production, many Asian countries have become important trade and shipping countries. Any major shipping event in the world would impact the economy of these countries. For example, the commercial opening of the Arctic sea routes might bring positive or negative effect to major Asian seaport cities. Investment and trade patterns related to shipping cost can change and economic uncertainty can increase. Asian countries are also users of the Arctic sea routes. With climate change and the enhancement of shipping conditions, Asian countries will enter the Arctic through navigation of the Arctic sea routes. This is an inevitable result of globalization. Given these aspects, the Asian countries are newcomers and they need to acquire knowledge and gain experience. The Arctic countries hope non-Arctic countries, especially Asian coastal states, can fully understand the mission and take the responsibility of Arctic governance and make due contributions. Besides hopes for participation of non-Arctic countries in sustainable development of the Arctic, Arctic countries also worry that their participation will make governance more difficult. In the process of pursing the Western countries’ modernization, Asian countries also experience adverse impacts of industrialization on the environment, ecology, and health. They are quickly

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J. Yang

abandoning the obsession for industrialization and building modern ecological civilizations with traditional Asian knowledge. These Asian coastal states are also restoring the use of education and the academia for their societies. Following Japan, countries like China, India, Singapore, and South Korea have made significant progress in technological and academic research, and have become an important force in Arctic research. The progress that Asian scientists have made constitutes the moral and academic foundation for Asian countries in their cooperation with Arctic countries on the issue of Arctic governance. While the Asian countries feel the call of Arctic economic opportunities and the magnitude of missions of Arctic environmental governance, they also feel a sense of exclusion from some Arctic countries towards non-Arctic countries. This is due to Arctic countries’ perception-gaps of non-Arctic countries in Arctic issues, as well as discrimination from some Arctic countries in the arrangement of interests, responsibilities, and obligations. Asian countries should engage in comprehensive cooperation with Arctic countries and contribute to a peaceful, environmental friendly, ecologically balanced, and sustainable Arctic. Within this context, the Shanghai Institutes for International Studies and the Fridtjof Nansen Institute launched a project on the topic of Asian countries and Arctic affairs, and held the international academic conference Asian Countries and the Future of the Arctic in Shanghai in April 2014. On this platform, scholars from China, India, Japan, Singapore, and South Korea contributed with research on economic and social implications of natural and ecological changes in the Arctic, and displayed the positive energy of Asian countries in their participation in Arctic affairs — fully understanding the Arctic in the aspects of natural sciences, political, and legal environment, as well as protecting the Arctic in the aspects of environment, ecology, and resources. The Asian countries should

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join forces with the Arctic countries to ensure the utilization is carried out in a sustainable manner. Scholars from Arctic countries such as Finland, Norway, Iceland, Russia, and the United States introduced the latest developments of Arctic affairs and explained the missions of Arctic governance, listened to the opinions of the Asian countries in Arctic affairs and learned about policies and actions from Asian countries. Scholars from the Asian and Arctic countries discussed areas and ways of future cooperation and reached a consensus to take on the challenge and responsibility of Arctic and global governance advice together. This collection of chapters is the result of the latest research from the scholars from Arctic countries and some Asian countries. The publication of the collection is a product of the cooperation between the Shanghai Institutes for International Studies and the Fridtjof Nansen Institute, and it is a good starting point of cooperation between Asian countries and Arctic countries on Arctic affairs. We are confident about the future. YANG Jian August 5, 2014, Shanghai, China

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Introduction: Nordic Perspectives on Asia’s Arctic Interests

Responsible management of Arctic resources has been on the research agenda of the Fridtjof Nansen Institute (FNI) since its establishment in 1958. For long, Arctic research was dominated by the cold war and frozen relations between the Soviet Union and western countries, including the Nordic region. The demise of the Berlin Wall opened up a unique era of Arctic cooperation, which has seen a plethora of regional institutions form with the aim of managing Arctic resources to the benefit of Arctic countries and the broader Arctic region. At the same time, climate change became a catalyst for attention to the Arctic’s growing global dimension, and with related increased business, tourism, and scientific interest the Arctic by 2014 established as an important global challenge. It is in this perspective we should judge Asia’s growing concern for Arctic affairs, which culminated in 2013 with the granting of formal observer roles in the Arctic Council by China, India, Japan, Singapore, and South Korea. In 2012 the FNI joined forces with the Shanghai Institutes for International Studies (SIIS) and collaborating institutes in other Asian countries and formed the research project Asia in the Arctic 7

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L. Lunde

(www.asiarctic.no), funded by the NORRUSS program of the Research Council of Norway. This book is one of the outputs from the project. The conference that this book builds on is part of this comprehensive research effort, which aims to understand the driving forces behind Asia’s evolving Arctic policies and positions. In this introduction, I dwell on an underlying topic of high relevance: Why the Nordic countries have been and remain in favor of increased Asian participation in Arctic affairs. To welcome China, India, Japan, Singapore, and South Korea as permanent observers to the Arctic Council was a controversial decision. It was long resisted by Arctic powers Russia and Canada, with the United States undecided until right before the final decision. The Nordic countries, on the other hand, led by Norway, emphasized the positive aspects of Asia’s interest and saw the region’s greater participation in Arctic affairs as strengthening governance and making the Arctic Council a more relevant and future-oriented forum. Asian Arctic aspirations are a recent phenomenon and therefore the Nordic countries’ reception of them has not been subject to much systematic scrutiny. Parts of the picture are quite clear, however. Nordic countries are pragmatic institutionalists with a realist flair. They acknowledge that recent developments, including climate change, trade, shipping, and the development of natural resources, serve to globalize the Arctic. The Asian countries have come to the Arctic to stay, and the Nordics believe it is better to integrate them into regional affairs, at a given level of involvement, than to ostracize them and risk the formation of potentially unhelpful alliances of non-Arctic states. They see Chinese and Korean companies already making big deals in the Russian Arctic, and a Vietnamese oil player has just lined up with Rosneft for several Arctic blocs, and the major Chinese and Japanese oil and gas companies approaching the Norwegian and Icelandic continental shelf.

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Moreover, the Nordic countries view the Arctic Council as an inclusive policy-shaping body rather than an exclusive policymaking one and believe that many of the Arctic’s challenges require global and not only regional solutions. Experience across a range of policy areas has shown the Nordic countries that all stakeholders need to be involved in problem solving. This holds in the Arctic more than most regions, given the high-risk, high-reward nature of economic development and the related need to get all major players to pay for the infrastructure required to make the Arctic safe and sound for business. The positive Nordic reception to Asian Arctic involvement is founded in a number of important conditions, however. All nonArctic countries, be they the Germany and United Kingdom or China and South Korea, need to respect the sovereign rights of coastal states over their respective land areas, exclusive economic zones, and continental shelves, in accordance with key features of the United Nations Convention on the Law of the Sea (UNCLOS). The same holds for Arctic governance in general and the workings of the Arctic Council in particular. To have an impact on Arctic Council proceedings, observer countries must show a willingness to invest and use the best of their scientific and policymaking capacities in the council’s various working groups and task forces. In their applications to become observers to the Arctic Council, states promise to abide by the ‘seven Arctic Council commandments’, including demonstration of competence and financial capacity to contribute to furthering council goals, respect of rules and traditions among indigenous peoples in the Arctic region, and a range of other rather demanding requirements. In the years leading up to the 2013 Kiruna meeting, the Asian applicants succeeded in convincing the Nordic countries, and gradually also the United States, that they complied with all these requirements and thus deserved to be welcomed as observers. Canada and Russia were not convinced, but relented in their opposition under very strong pressure during the late hours of Kiruna negotiations.

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L. Lunde

Overall, the Nordics see Asian countries motivated by commercial instincts, similar to all other countries approaching the Arctic, as well as by broader global issues like climate change, sustainable development, and strengthened research efforts. The Nordic countries blend advanced welfare states and high shares of state ownership with highly open economies and liberal foreign investment regimes. They are active members of the World Trade Organization, and their globalizing companies depend on liberal trade policies in other countries to generate export revenue. Asian countries, therefore, can expect fairly positive reactions to prospective Arctic investments, as long as these investments are not seen as threatening key strategic interests in the Nordic region. A controversy of the Unocal type — in which China National Petroleum Corporation was forced to abort its effort to buy the US oil independent Unocal — is highly unlikely in the Nordic Arctic, partly because of the positive attitudes described above and partly because major deals would be discussed in the Nordic capitals and not concern the Arctic as such. Asian involvement in Nordic Arctic regions is likely to grow over the coming years, slowly but steadily. The future pattern of climate change and ice melting will affect the pace and volume of Asian investment, particularly in the shipping and petroleum sectors. Much is up to the Asian countries themselves — their ability to plan and strategize for high-risk and longer-term scenarios, to make their best people available to the Arctic Council and related forums, and to develop creative strategies vis-à-vis individual Nordic countries. An example of the latter is the China–Nordic Arctic Research Center (CNARC), which originally was a Chinese– Icelandic initiative but was broadened to engage key Arctic research centers in all Nordic countries. The first CNARC symposium was held in Shanghai in June 2013, and the 2014 one was held in Akureyri, Iceland, in June.

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Current geopolitical tensions between Russia and Europe are now spreading towards Arctic waters. This could dampen the pace of development in this hitherto ‘high north, low tension’ region, including the further development of the Northern Sea Route (NSR). Yet although heightened tension between Russia and Europe could have a negative impact on some Asian–Nordic Arctic interfaces, particularly those requiring the use of the sea route north of Russia, it is unlikely to reduce the attractiveness of Asian investment in Nordic Arctic regions in sectors such as petroleum, mining, tourism, and science and telecommunications. For instance, the last few years have seen a significant increase in Chinese and Korean tourists to the Nordic region, with the Arctic as an ever more attractive destination. Therefore, even in a time of new geopolitical tension in the Arctic, prospects are promising with regard to further development of cooperation in the Arctic between Nordic and Asian countries. Leiv Lunde September 14, 2014, Lysaker, Norway

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Part 1

Governance and Cooperation

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Chapter 1

Adaptive Governance for a Changing Arctic Oran R. Young

The Arctic is a dynamic region. Conditions prevailing in the region today differ from those of yesterday in ways that have far-reaching consequences regarding needs for governance and the means of addressing them. There is every reason to expect that the Arctic of tomorrow will present a new array of needs for governance. It follows that effective governance in this region requires arrangements that are resilient in the sense that they are able to adapt to changing demands for governance over time without compromising their ability to solve problems in the present.1 Taking this observation as a point of departure, I consider current and future needs for governance in the Arctic and assess the capacity of existing and emerging arrangements to meet these needs effectively. In the concluding section, I comment on the implications of these developments for the framing of policies relating to the Arctic on the part of China and other non-Arctic states. The changing Arctic With the waning of the Cold War during the 1980s and the final collapse of the Soviet Union at the end of 1991, the Arctic moved to 1

For an application of the analytic framework associated with the concept of resilience to the Arctic see Arctic Resilience Interim Report 2013, (Stockholm, Stockholm Environment Institute/Stockholm Resilience Centre), 2013, pp. 1–117. 15

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the periphery of international society in geopolitical and geoeconomic terms. Whereas the Arctic had been a critical theater of operations during the Cold War for the deployment of nucleararmed submarines and manned bombers equipped with long-range cruise missiles, military activity in the region became a sideshow in the post-Cold War strategic environment. Submarines still operated in the Arctic Basin with some frequency, but no one paid much attention to the region in thinking about cutting-edge concerns in the realm of international security. The Arctic remained a source of world-class deposits of oil and gas. At its height, the Prudhoe Bay field on Alaska’s North Slope alone produced about two million barrels of oil a day to be shipped to southern markets via the TransAlaska Pipeline. But the 1990s also emerged as a period of low world market prices for oil. During the middle of the decade, for example, the benchmark price for oil dipped below USD 20 a barrel in 2011 dollars. The role of Arctic hydrocarbons in international trade was limited. Just as the region moved to the periphery in strategic terms, therefore, the Arctic seemed less attractive in global economic terms than it had seemed in the preceding decades. From the perspective of international cooperation, these conditions were conducive to innovation. Few cared about the implications of Arctic developments in global terms. Those whose concerns were regional in scope, on the other hand found that resistance to innovative initiatives in national capitals was not a serious barrier to progress. The result was a series of new initiatives starting with the establishment of the International Arctic Science Committee (IASC) in 1990 and proceeding with the launching of the Arctic Environmental Protection Strategy in 1991, the founding of the Northern Forum in 1991/1993, the creation of the Barents Euro-Arctic Region (BEAR) in 1993, and finally the founding of the Arctic Council in 1996. Taken together, this burst of cooperative initiatives constituted a remarkable development; it put the Arctic on a cooperative path that has played out with impressive results

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during the subsequent years. Many came to regard the region as a prominent example of success in the effort to promote peace and pursue sustainable development at the regional level. Changes occurring in recent years have altered the status of the Arctic in important respects.2 The impacts of climate change are being felt sooner and more dramatically in the Arctic than anywhere else on the planet. Not only is this significant in its own right; it is also opening the Arctic to development on the part of those interested in commercial shipping, the extraction of natural resources including minerals as well as hydrocarbons, and newly emerging opportunities for adventure tourism. As a result the links between the Arctic as a more or less distinct region and the global system are becoming tighter. There is no reason to expect at this stage that the Arctic is on its way toward becoming a zone of conflict. Nonetheless, it is easy to understand the growth of interest in Arctic developments on the part of important non-Arctic actors such as the European Union and major Asian states including China. The links between the Arctic and the global system are environmental, economic, and political in nature. The impacts of climate change on the Arctic extend well beyond the melting of sea ice to include ocean acidification, the growing intensity of coastal storm surges, the melting of permafrost, and the destabilization of the Greenland ice sheet. Environmental links also include fluxes of contaminants such as persistent organic pollutants (POPs), heavy metals like mercury, and black carbon that originate beyond the confines of the Arctic, but make their way to the region via airborne and waterborne vectors. The growth of interest in commercial shipping in the Arctic and the extraction of the region’s natural resources are conditioned by global market forces that determine 2

See the essays collected in Kraska (ed.), 2011; Berkman & Vylegzhanin (eds.), 2012; and Offerdal & Tammes (eds.), 2014.

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the attractiveness of newly accessible Arctic shipping routes and supplies of oil and gas. While conflicts relating to the Arctic itself are of limited importance and generally subject to mutually agreeable methods of resolution, the region is increasingly sensitive to global geopolitical forces, such as the rise of East–West tensions in areas like the Ukraine and the increasing influence of a resurgent China. A common denominator regarding all the regional–global links is the increasing importance of external drivers as determinants of what happens at the regional level. It follows that Arctic governance arrangements must find effective means to address the impacts of these external drivers rather than treating the Arctic as a self-contained region that can be governed without reference to the effects of broader environmental, economic, and political forces. This means, among other things that non-Arctic actors must couple expression of interest in Arctic opportunities with an acknowledgement of their shared responsibility for the fate of the Arctic. Under the circumstances, it is important to draw a distinction between those needs for governance that can be addressed effectively through regional mechanisms like the Arctic Council and those needs that will require attention on the part of mechanisms that are able to engage with extra-regional forces. A few examples will clarify the importance of this observation. While the factors that will determine the attractiveness of Arctic shipping routes are global in nature, the need for enhanced search and rescue (SAR) capacity in the Arctic is a matter that the Arctic Council is well-suited to address. The 2011 Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic negotiated under the auspices of the council makes good sense.3 While world market forces will determine the prospects for large scale oil and gas development in 3

The full text of the agreement signed on the occasion of the Arctic Council Ministerial Meeting in Nuuk, Greenland on May 12, 2011. Available at www. artic-council.org (accessed on July 28, 2014).

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the Arctic, the issues associated with oil spill preparedness and response in the maritime Arctic are suitable for treatment at the regional level. The Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic signed at the Arctic Council’s Ministerial Meeting in Kiruna, Sweden in May 2013 therefore makes sense.4 While economic and political forces that are global in scope will determine the impacts of climate change in the Arctic, issues of adaptation to the impacts of such changes are matters of regional concern. The Arctic Council’s ongoing project on Adaptation Actions for a Changing Arctic (AACA) is thus an appropriate initiative at this stage.5 It is essential to differentiate among needs for governance in terms of their suitability for regional treatment, allocating those that are suitable to mechanisms like the Arctic Council and recognizing the need to turn to broader mechanisms in cases where regional solutions are not feasible. An Arctic governance mosaic The central elements of the Arctic governance system are products of agreements reached during the 1990s. They have served the region well for almost 20 years. The Arctic Council, for example, has proven more effective in dealing with an array of regional issues than most of those present at the creation in 1996 were able to foresee.6 Despite its obvious limits as an intergovernmental organization, the council has had considerable success in identifying emerging issues, framing them for consideration in policy arenas, and moving them into prominent spots on the policy agenda. Nevertheless, as 4

Full text of the agreement available at www.arctic-council.org (accessed on July 28, 2014). 5 For information on this project carried out under the auspices of the council’s Arctic Monitoring and Assessment Programme, see AMAP, ‘Adaptation Actions for a Changing Arctic’. Available at www.amap.no/adaptation-actions-for-achanging-arctic-part-c (accessed on July 21, 2014). 6 Kankaanpää & Young, 2012.

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we move toward the 20th anniversary of the founding of the Arctic Council, it is increasingly apparent that the existing arrangements are not adequate to address the full range of needs for governance relating to the Arctic arising today and likely to come into focus during the coming years. The question of how to adapt the existing arrangements to meet emerging needs for governance is increasingly prominent. Some governmental and non-governmental bodies, such as the European Union and the World Wildlife Fund, often referring to experience with the Antarctic Treaty System, have proposed the establishment of a comprehensive and legally-binding treaty for the Arctic. However, this is not a realistic option for the Arctic during the foreseeable future.7 The analogy between the two polar regions is not helpful in this connection. Unlike the Antarctic, the Arctic has some four million permanent residents, has long been militarized, and is the site of world-class industrial operations.8 What is more, the five Arctic coastal states have made it clear that they do not support such an initiative. While it is possible that the views of these states will change in the future, this is not a likely occurrence over the next 5 to 10 years. There are other reasons as well why an effort to devise a comprehensive Arctic Treaty is not a desirable step at this juncture. There is a standard tradeoff between the legally binding nature of an agreement and the willingness of states to become members, the content of an agreement’s substantive provisions, and the time it takes both to negotiate the terms of the agreement and to execute the formalities required for the agreement to enter into force. An Arctic Treaty with significant content would be difficult to negotiate and 7

Young, 2011, pp. 327–334. Arctic Human Development Report, 2004, a report to the Arctic Council (Akureyri, Stefansson Arctic Institute).

8

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would almost certainly take considerable time to enter into force; there is a real prospect that one or more of the coastal states would fail to ratify the treaty. Equally important in terms of the focus of this article, legally binding agreements are seldom highly adaptable. Although they may include provisions allowing for the introduction of amendments, these provisions are typically cumbersome and politically sensitive. These difficulties are clearly exemplified by the experience of the Antarctic Treaty System. If a comprehensive treaty is not the solution for Arctic governance, what is the alternative? What makes sense at this stage is the continued development of a mosaic of governance arrangements. The hallmark of this mosaic is the existence of a number of distinct elements that all deal in one way or another with the same spatially-defined region but that are non-hierarchical in the sense that they are not subordinate to one another and that there is no overarching arrangement under which they all operate.9 In the case of the Arctic, it is helpful to identify six types of elements of the emerging institutional mosaic: (i) global agreements or regimes developed by global organizations that are pertinent to the Arctic, (ii) the Arctic Council (iii) place-based management mechanisms, (iv) public–private partnerships, (v) informal venues for addressing Arctic matters of common concern, and (vi) all-hands gatherings. The 1982 UN Convention on the Law of the Sea (UNCLOS) provides a constitutive framework applying to human activities in the maritime Arctic just as it applies to other areas.10 The convention 9

There are clear similarities between this notion of an institutional mosaic and the idea of a regime complex that has been a focus of attention in recent literature on international governance. The difference is that a mosaic involves separate arrangements that all deal with a more or less well-defined region, while a complex includes separate arrangements dealing with a common issue domain (e.g. climate change). See Orsini et al., 2013, pp. 27–39. 10 Byers, 2013.

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also contains a separate article on ice-covered waters (Article 234), which allows the Arctic coastal states to introduce special measures regarding the protection of marine systems. The general provisions of Article 76 on the delimitation of jurisdictional boundaries on the outer continental shelf have become especially important with the increasing accessibility of Arctic waters. A number of the International Maritime Organization’s (IMO) conventions, such as the International Convention for the Safety of Life at Sea (SOLAS) and the International Convention for the Prevention of Pollution from Ships (MARPOL) are applicable to the Arctic. The current effort to negotiate a legally-binding Polar Code dealing with the design, construction, and operation of commercial ships in Arctic waters is taking place within the framework of the IMO and is open to participation on the part of all IMO members. Several other international conventions, like the 2001 Stockholm Convention on Persistent Organic Pollutants and the 2013 Minamata Convention on Mercury, are applicable to the Arctic. In some cases, Arctic concerns are recognized as having played a role in the effort to reach agreement on the terms of these conventions.11 The Arctic Council, established as a high level forum under the terms of the 1996 Ottawa Declaration, adopted by the eight Arctic states, deals with matters of environmental protection and sustainable development throughout the Arctic.12 Although the council is not a formal intergovernmental organization, it has had considerable success in identifying important issues relating to the Arctic and framing them for consideration in policy arenas. The treatment of indigenous peoples’ organizations as Permanent Participants is a particularly innovative feature of this arrangement. Recently, the council has taken a growing interest in the negotiation of agreements on specific matters falling within its area of interest. The 2011 11 12

Downie & Fenge (eds.), 2003. Axworthy et al. (eds.), 2012.

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agreement on SAR and the 2013 agreement on Oil Pollution Preparedness and Response exemplify this trend. Another element of the Arctic mosaic centers on arrangements aimed at protecting individual species within their range or at designating more limited areas as marine protected areas. The fivenation polar agreement adopted by the Arctic coastal states in 1973 is a prominent example of the first of these categories.13 Current efforts to devise measures to protect Large Marine Ecosystems (LMEs) in the Arctic through the designation of Ecologically and Biologically Sensitive Areas under the Convention on Biological Diversity or the identification of Particularly Sensitive Seas Areas under MARPOL exemplify the second category. The longstanding international regime for the Svalbard Archipelago, set forth in the terms of the 1920 Treaty of Spitsbergen, provides an example of a different sort of international regime dealing with a spatiallydefined area within the Arctic.14 The Arctic governance mosaic also includes public–private partnerships addressing matters of common interest. A striking example involves commercial shipping where the International Association of Classification Societies operates a regulatory system assigning ice class designations to individual ships, while the IMO is responsible for the emerging Polar Code. Together, these arrangements are likely to play a key role in the development of marine insurance schemes applicable to Arctic shipping. A growth area for public–private partnerships in the future involves the development of Arctic infrastructure needed in connection with commercial navigation and the extraction of natural resources in the High North.

13 14

Fikkan et al., 1993, pp. 96–151. Singh & Saguirian, 1993, pp. 56–95.

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Two types of informal mechanisms round out the Arctic governance mosaic. Some informal mechanisms provide off-therecord venues that are conducive to personal interactions, confidence building activities, and the exploration of innovative ideas in a private setting. Perhaps the most prominent example is the annual Arctic Frontiers conference in Tromsø, Norway, which has become a meeting place for Russians and westerners concerned with matters of Arctic policy. To this we can add the North Pacific Arctic Conferences, which have provided an off-the-record venue, since 2011, for discussions between individuals from Asian states, like China, Japan and South Korea, and Arctic states,15 as well as the World Economic Forum, which has offered a meeting place for those interested in Arctic economic opportunities for several years.16 The other informal mechanism is the Arctic Circle, an all-hands assembly of persons interested in the Arctic from inside and outside the region and from many walks of life, which met for the first time in Iceland during the fall of 2013.17 It is too early to tell what course the Arctic Circle will take as it develops and seeks to find a distinctive niche in the Arctic governance mosaic. At this juncture, however, the Arctic Circle appears to be taking on many of the features of an annual trade fair in which producers and consumers of Arctic innovations exchange thoughts, building an expansive community of those interested in the region and providing a venue for informal networking in the process. The role of this body differs from that of the Arctic Council, which is an intergovernmental arrangement, and from the other informal mechanisms, which 15

Young et al., 2013. World Economic Council Global Agenda Council on the Arctic, ‘Demystifying the Arctic’, (Davos, World Economic Forum) Working Paper, pp. 1–17. Also available at http://library.arcticportal.org/1757 (accessed on July 21, 2014). 17 The Arctic Circle website describes itself as ‘… a nexus where art intersects with science, architecture, education, and activism’. Available at http://www. thearcticcircle.org/download/support.pdf (accessed on July 21, 2014). 16

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specialize in off-the-record consultations among those with more focused interests in emerging Arctic issues. Integration and adaptive capacity Governance mosaics associated with spatially-defined areas, like regime complexes addressing broad issue domains, vary along a spectrum from integration to fragmentation.18 In some cases, there is a relatively clear division of labor, and the principal elements fit together in a manner that enhances effectiveness. Nevertheless, there is no basis for assuming that this will be the case. Individual elements are often responsive to different perceived needs for governance, championed by different actors or interest groups, and established at different times and in different forms. In some cases, individual elements are crafted in such a way that they are responsive to the concerns of distinct interest groups rather than designed to promote common interests. This makes it relevant to examine the Arctic mosaic critically in search of significant gaps and overlaps. And it triggers a consideration of whether there are mechanisms at hand that can promote the integration of this governance mosaic going forward. Several possibilities are worthy of consideration in this regard. It is important to think carefully about the characteristics of issues suitable for treatment by regional bodies like the Arctic Council in contrast to global bodies like the IMO. Finding ways to adapt to the impacts of climate change is a regional matter, for example, while taking steps to reduce greenhouse gas emissions requires global actions. The initiative of the AACA project therefore makes good sense. A particularly helpful integrative activity going forward would be a conscious effort to distinguish between those issues suitable for regional action and issues 18

Keohane & Victor, 2009, pp. 7–23.

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requiring extra-regional action. In the case of the latter, like the treatment of contaminants originating outside the Arctic or the control of black carbon, the Arctic Council can play a role by articulating the concerns of Arctic residents in a forceful manner. Effective measures to solve the relevant problems, however, will require action on the part of non-Arctic actors, such as those who negotiated the terms of the 2001 Stockholm Convention. In other cases, it makes sense to nest regional agreements into broader international governance systems. The link between the Arctic Council’s 2013 Agreement on Oil Pollution Preparedness and Response and the 1990 International Convention on Oil Pollution Preparedness, Response and Cooperation, a global arrangement developed under the auspices of the IMO, for example, is both intentional and constructive. Some have criticized the 2013 agreement on the grounds that it does not address the issue of oil spill prevention. This criticism is understandable, especially in light of the fact that oil spills under the conditions prevailing in the Arctic may prove particularly harmful; there is much to be said for keeping up the pressure to take additional steps to address this problem.19 There is nevertheless no doubt that the 2013 agreement gains strength from the fact that it features a regional application of broader measures that are already in place at the global level. Beyond this lies the prospect that the Arctic Council may be able to assume a role as facilitator regarding the disparate elements of the Arctic governance mosaic. At this stage, initiatives relating to shipping, oil and gas development, mining, fishing, wildlife protection, tourism, scientific cooperation, and so forth are proceeding for the most part along separate tracks. But they 19

AMAP, Arctic Oil and Gas, 2007, (Oslo, AMAP); National Research Council, 2014, Responding to Oil Spills in the US Arctic Marine Environment, Washington, DC: The National Academies Press.

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obviously have implications for one another. Think of issues involving interactions between marine mammals on the one hand and commercial shipping and oil and gas development on the other as cases in point. The council lacks the authority to make binding decisions about matters of this sort, a limitation that is not likely to change any time soon. Nevertheless, it has a remit that is broad enough to take in matters of this sort, and it has developed the expertise, largely through the activities of its working groups, to play a role of some significance in identifying such concerns and exploring options for addressing them constructively. Success in this realm could make an important contribution toward the integration of the Arctic governance mosaic. Given what I have said about the dynamism of the Arctic, it is apparent at this stage that a capacity to adapt effectively and in a timely manner will be essential to the success of the Arctic governance mosaic. Some requirements for adaptiveness are generic in the sense that they are relevant to all governance systems. Thus, it is essential to put in place observing and monitoring systems that can provide early warning regarding impending changes. Taking steps to strengthen the science-policy interface to allow for the co-production of governance arrangements is helpful. Devising tools that can contribute to the identification and evaluation of policy options in a variety of settings is a worthwhile endeavor. It is also possible to offer some observations about institutional adaptiveness that are more specific to the current situation regarding Arctic governance. The fact that the Arctic governance system does not take the form of a comprehensive and legally-binding agreement may be an advantage from the perspective of adaptiveness. Comprehensive and legally-binding agreements are notoriously difficult to adjust to match shifts in needs for governance arising from changing circumstances. An example of particular relevance to Arctic governance is the 1959 Antarctic Treaty. This treaty allows

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any Contracting Party to call for the organization of a review conference once the treaty has been in force for 30 years, or anytime after 1991 given the fact that the treaty entered into force in 1961.20 Yet no country has called for the organization of such a conference during the intervening years, despite the emergence of new concerns relating to Antarctic governance. The universal fear is that a review conference would open a Pandora’s box of complex issues that would be extremely difficult to address constructively. As a result, the parties have concluded that it is better to address newly emerging issues through the negotiation of separate protocols, such as the Environmental Protocol, or distinct agreements like the Convention on the Conservation of Antarctic Marine Living Resources. But there has been no initiative of this sort since the negotiation of the 1991 Environmental Protocol. And there is nothing unusual about the circumstances surrounding the Antarctic Treaty in this regard. The Arctic governance mosaic encompasses a mix of arrangements with regard to their legal status. Some individual elements are legally binding. This is true, for example, both of the Stockholm Convention on Persistent Organic Pollutants and of the SAR agreement negotiated under the auspices of the Arctic Council. The Polar Code, now under negotiation within the IMO, is intended to take the form of a legally-binding regulatory arrangement; it will replace a set of voluntary guidelines dealing with commercial shipping in the Arctic adopted initially in 2002. These arrangements make perfectly good sense. The Arctic Council, by contrast, is based on a ministerial declaration that is not legally binding. While there are those who would like to formalize the council, it is unlikely that this will happen during the foreseeable future. IASC, the principal mechanism for stimulating new research on Arctic issues, 20

Thus, Article XII(1)(b) states that if any Contracting Party makes such a request ‘… a Conference of the Contracting Parties shall be held as soon as practicable to review the operation of the Treaty.’

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is a non-governmental organization established under an agreement among national academies of science of the participating countries.21 Mechanisms like Arctic Frontiers and the North Pacific Arctic Conferences, of course, are simply informal venues that offer opportunities for individual players to engage in off-the-record conversations in an unobtrusive setting. Though the resultant mosaic may strike some as lacking in neatness or tidiness, there is much to be said for this fluid system from the perspective of adaptive governance. It allows for formalization in areas where this seems desirable, while at the same time making it easy to adjust other elements to meet the needs of changing circumstances. With regard to the Arctic Council, which sits at the center of the Arctic governance mosaic, there is considerable interest in some quarters in making this arrangement more formal, in effect turning it into a ‘normal’ intergovernmental organization. This idea seems ill-advised, however, at least at this stage in the evolution of Arctic governance. Formalization might sideline some of the council’s most innovative features, e.g. the distinctive role accorded to the Permanent Participants, and it would tend to freeze the principal features of the council in place at a particular point in time. The council is in need of significant adjustments at this stage. There is a need for improved recognition and understanding of the council’s generative role. The provisions regarding observers are somewhat dysfunctional. It would help to foster more productive relations between the IASC and the council’s working groups. A regular budget for council operations would allow those responsible for the operation of the council to make decisions about new projects on 21

For the text of The Founding Articles of the International Arctic Science Committee, adopted in August 1990 is available at www.iasc.info/files/IASC_ Handbook.pdf (accessed on July 21, 2014). Among other things, the non-governmental status of IASC makes participation on the part of non-Arctic members comparatively easy. The committee currently has 21 members, the 8 Arctic countries and 13 others.

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the basis of programmatic considerations rather than on largely opportunistic grounds. Yet it is essential to note that the circumstances of the council are evolving rapidly as the Arctic continues to experience transformative change. With all due respect to the virtues of formalization, much of the success of the Arctic Council is attributable to its ability to adapt to changing circumstances with comparative ease. Implications for China and other non-Arctic states Because this chapter is intended first and foremost to address concerns of the non-Arctic states, I will close with some observations about the implications of my analysis for the Arctic activities of nonArctic states and non-state actors. I single out China in this regard both because Chinese interest in the Arctic has grown rapidly in recent years and because China’s rising importance at the global level as a geoeconomic and geopolitical power makes it impossible to ignore the importance of China’s role with regard to the future of the Arctic. I can summarize my thoughts in a series of five bullet points: 1. Adopt a proactive attitude toward the Arctic Council, but do not expect too much. Observership in the Arctic Council is an important asset. Yet it cannot and will not lead to far-reaching opportunities to influence the course of Arctic governance, not least because the role of the council itself is limited. The best prospect is to engage at the level of the Arctic Council’s working groups and, more specifically, to become actively involved in the work of specific projects carried out under the auspices of the working groups such as the current work on the Arctic Human Development Report II, the Arctic Resilience Report and the AACA. 2. Encourage business initiatives, but do not regard them as elements of a political strategy. There is an understandable sensitivity, based on experience in other parts of the world, about

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the use of foreign investment and business initiatives as elements of a political strategy.22 This is particularly true in cases such as China’s overtures to small Arctic players like Greenland and Iceland. The trick is to avoid these concerns, without refraining from launching promising business initiatives. 3. Contribute to the construction of the infrastructure needed to support responsible development in the Arctic as a public good. Infrastructure, including the provision of services important to commercial shipping and the development of IT systems designed to link the Arctic with the outside world, is hugely important but often undersupplied due to the influence of freerider tendencies or a general antipathy to support for infrastructure coming from the public sector. Several of the nonArctic states, including China, are well-placed to contribute to the development of Arctic infrastructure of value to an array of users. 4. Treat the concerns of the Arctic’s permanent residents in a sensitive manner. The concerns of the Arctic’s four million human inhabitants who regard the region as their home require serious consideration. This is particularly true of those who are members of indigenous groups. These peoples, who have resided in the Arctic for generations and who expect to continue to do so into the indefinite future, should be treated as rightsholders rather than simply stakeholders. Initiatives that are insensitive to their concerns are unlikely to prove successful in the long run. 5. Strengthen the science-policy interface in order to support the co-production of Arctic knowledge and policy. The Arctic Council’s working groups include many people who have scientific training and who are well-qualified to engage in scientific assessments. What is missing is a strong link between scientific 22

See Economy & Levi, 2014.

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assessments and the activities required to produce new scientific knowledge. One thing that is needed to address this gap is a more productive relationship between the council and its working groups, and IASC, a body that non-Arctic countries like China can belong to and participate in as full members. A concluding thought The dynamism of the Arctic region presents both challenges and opportunities with regard to governance. It is challenging because we cannot count on arrangements created under earlier conditions to meet needs for governance that are emerging now and that are likely to emerge in the coming years. It is easy to imagine a commitment to the status quo in institutional terms leading to the occurrence of serious governance failures. At the same time, the situation presents opportunities. The Arctic governance mosaic has developed rapidly during the post-Cold War era. It has produced surprisingly positive results; the Arctic is today a zone of peace and is likely to remain so, despite the reemergence of East–West tension associated with the conflict over the Ukraine and the concerns emerging in some quarters regarding the implications of China’s rise to the status of a global power. The fact that the Arctic governance system is not embedded in a comprehensive and legally-binding agreement has significant advantages when it comes to meeting the challenge of adapting quickly and effectively to the shifting conditions arising in a region experiencing transformative change. References Axworthy, T., Koivurova, T. and Hasanat, W. (eds.), 2012, The Arctic Council: Its Place in the Future of Arctic Governance, Toronto: Munk School of Global Affairs. Berkman, P.A. and Vylegzhanin, A. (eds.), 2012, Environmental Security in the Arctic Ocean, Dordrecht: Springer.

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Byers, M., 2013, International Law and the Arctic, Cambridge: Cambridge University Press. Downie, D.L. and Fenge, T. (eds.), 2003, Northern Lights Against POPs, Montreal: McGill-Queen’s University Press. Economy, E.C. and Levi, M., 2014, By All Means Necessary: How China’s Resource Quest is Changing the World, New York: Oxford University Press. Fikkan, A., Osherenko, G. and Arikainen, A., 1993, ‘Polar Bears: The Importance of Simplicity’, in Young, O.R. and Osherenko, G. (eds.), Polar Politics: Creating International Environmental Regimes, Ithaca: Cornell University Press. pp. 96–151. Kankaanpää, P. and Young, O.R., 2012, ‘The Effectiveness of the Arctic Council’, Polar Research, 31. Also available at http://dx.doi.org/10.3402/polar. v31i0.17176 (accessed on July 28, 2014). Keohane, R.O. and Victor, D.G., 2009, ‘The Regime Complex for Climate Change’, Perspectives on Politics, 9, pp. 7–23. Kraska, J. (ed.), 2011, Arctic Security in an Age of Climate Change, Cambridge: Cambridge University Press. Offerdal, K. and Tammes, R. (eds.), 2014, Geopolitics and Society in the Arctic, London: Routledge. Orsini, A., Morin, J.-F. and Young, O.R., 2013, ‘Regime Complexes: A Buzz, a Boom, or a Boost for Global Governance’, Global Governance, 19, pp. 27–39. Singh, E.C. and Saguirian, A.A., 1993, ‘The Svalbard Archipelago: The Role of Surrogate Negotiators’, in Young, O.R. and Osherenko, G. (eds.), Polar Politics: Creating International Environment Regimes, Ithaca: Cornell University Press, pp. 56–95. Young, O.R., 2011, ‘If an Arctic Treaty is not the Solution, What is the Alternative?’, Polar Record, 47, pp. 327–334. Young, O.R., Kim, J.D. and Kim, Y.H. (eds.), 2013, The Arctic in World Affairs: A North Pacific Dialogue on the Future of the Arctic, Seoul: Korea Maritime Institute and the East–West Center.

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Chapter 2

The Arctic Governance and the Interactions between Arctic and Non-Arctic Countries YANG Jian

The natural environment in the Arctic region is changing far faster than what people have anticipated. Human society must make the necessary adjustments to their experience, production, and social functions and build up new social governance mechanisms to adapt to the new natural surroundings. The Arctic Council, established in 1996 has gradually become the most important mechanism of the regional governance. Notwithstanding, the Arctic environmental change is not purely due to the intra-regional factors in the Arctic, let alone its impacts, such as the melting of ice which has crossed beyond the Arctic border to influence the whole planet. Besides, it is unreasonable and unsustainable that the non-Arctic actors are denied access to the Arctic economic opportunities in this globalized world. Thus, Arctic governance has since the very beginning been concerned with whether or not to, and how to engage non-Arctic countries. In its Ministerial Meeting held in Kiruna, Sweden in May 2013, the Arctic Council granted permanent observer status to China, India, Italy, Japan, Singapore, and South Korea. This essay illustrates the interactions of intra-regional countries with extra-regional countries, 35

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and examines the change of Arctic governance mechanisms and takes China as a case to explain the responsibility and definition of interests on the part of the important non-Arctic countries in participating the Arctic governance, and their role in improving the governance mechanisms.

Regional public goods bearing on performance of Arctic governance In the process of regional governance, common demands and interests unite nations in the region to work together to design a set of mechanisms or institutions and shares the cost of such governance. These mechanisms and institutions that exclusively serve the region and are applicable only to the region, and whose cost is born commonly by regional countries are called ‘regional public good’.1 The key to evaluate the performance and effectiveness of an international governance regime is usually understood as the extent to which an institution help in solving or ameliorating the specific problem it was set up to address.2 The evaluation mainly includes: (1) whether or not it can access the information on the emergence and evolution of the issue, and acquire the knowledge and skill to solve it; (2) whether or not the regime can set up mandatory and legally binding international norms. To put it in another way, to which degree it has the capability to regulate the behavior of the relevant actors and make the violators pay a high price; (3) whether or not it is capable of coordinating and mobilizing the resource owners, be it intra- or extra-regional, or from foreign ministries or other departments of government, to make them consistent with the value of governance and willing to use their resources to provide the public goods in concern. 1 2

Fan & Bao, 2011, p. 16. Stokke, 2007, pp. 15–22.

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By examining the governance process of the Arctic Council, one might find that the member countries put the priority on the contradiction between resource exploitation and environmental and ecological protection. Therefore, for the Arctic governance organizations and the Arctic countries, it is unavoidable to face the contradiction between the interests of the Arctic countries and the common interests of mankind, and to introduce new factors in order to come up with more efficient governance mechanisms. As the natural conditions of the Arctic are harsh and the area is almost uninhabited, mankind has little knowledge about it. The six working groups established by the Arctic Council have embarked on their work actively and reached certain accomplishment in designing the environmental assessments and governance programs. However, the Arctic Council lacks necessary resources and ability in respect of mobilizing a wider range of international scientists dedicated to scientific discovery, technological innovation, and invention of the Arctic governance mechanism. The Arctic Council has long been a loose and forum-like governance mechanism in need of mandatory laws and enforcement means. At the Nuukmeeting held in 2011, the member states signed the Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic, which was the first legally-binding agreement, since the founding the Arctic Council 15 years prior. It coordinates lifesaving international maritime and aeronautical search and rescue (SAR) coverage and response among the Arctic states across an area of about 13 million square miles in the Arctic. Many of the Arctic governance programs, such as the protection of the Arctic maritime environment, the reduction of Arctic pollution, and the protection of Arctic fauna and flora, are confined to the working programs or international cooperation, but they are in need of mandatory measures to enhance governance-effectiveness and -performance. The Arctic Council is quite limited in its ability

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of political mobilization and political integration. Gaps between parties of this Arctic governance mechanism remain extraordinarily large in terms of quality and quantity. The parties geographically lie across Northern Europe, North America, and Northern Russia. The United States, Russia and other world powers, as well as important international organizations all have their influences converged and overlapped in the region. For example, the conflicts between North Atlantic Treaty Organization (NATO) and Russia, and that between Canada and European Union (EU) are yet to be settled. The Arctic Council appears incapable to coordinate such power relations. The performance of regional governance largely depends on the ability and the will of each of the actors to contribute to provide public goods. Governance goals fail to be fulfilled if public goods are insufficient. When marginal revenue is unequal to marginal cost on the side of the public goods supplier, the market will fail. The public goods for the Arctic governance can include categories of development, environmental protection, mechanisms, security, funds and infrastructure, knowledge, technological instrument, and so on. Which public goods Arctic governance supplies are nevertheless questionable. The difficulty of public goods supply exists in Arctic governance compared to domestic public goods supply, which are easier to implement and regulate due to the existence of the government and clearly defined boundaries. The government provides public goods through legislation with taxation money, and regulates public goods supply with systems of checks and balances. Regional public goods do not carry a mandatory ‘taxation system’ that requests shareholders to bear a necessary amount of expenditure, nor is there a powerful and clearly obligated ‘regional government’ that produces and provides public goods. Moreover, the differences between the Arctic countries in their size, quality, and in their ability to provide public goods are so large that they often bargain on the issues of who should provide the public goods.

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Arctic governance is a multi-tiered mechanism that includes a global level, a regional level, and a national level. The needs of Arctic governance will not be fully met through regional public goods alone. The Arctic Council can, as a regional multilateral body of governance, coordinate the allocation of public goods provided by the member states so as to secure the greatest possible gains. Rational allocation of public goods can prevent unduly intergovernmental expenditures, and stir up interests on transnational infrastructure projects. Externally, the Arctic Council can serve as an independent part for cooperation with extra-regional actors to address international issues, which will guarantee the greatest regional interests, cut down the cost caused by extra-regional actors in the most efficient way, and increase the will of extra-regional actors to contribute to providing public goods. The Arctic Council and the member countries’ tactics of incorporating extra-regional factors Arctic governance: Exclusiveness and inclusiveness Like other regional governances in the world, Arctic governance is faced with the issue of exclusiveness and inclusiveness. Any regional organization will make the considerations on the issue as follows: (1) efficiency of governance policy. The more member states there are, the more difficult it is to reach regional agreement and the longer it will take to negotiate on platforms of taking actions; (2) allocation of interests. Regional interests should be allocated as exclusively within the region as possible, which can prevent external competitors; (3) capability of extra-regional actors to provide public goods; (4) extent to which the external actors will become a cost to governance. If a governance regime cannot effectively incorporate these important factors, internal and external alike, the cost cannot be sufficiently controlled, and efficiency will be low. The nature of market allocation of the Arctic resources and the nature of non-market Arctic environmental governance oblige the

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Arctic countries to take exclusive or inclusive proclivities respectively. Resource allocation in the Arctic is market-oriented. In other words, under market conditions, the volume of interests to be allocated is limited. Thus, limited resources will compel the regional members to deny newcomers or competitors. In case when newcomers are undeniable, a good alternative is to raise the threshold of entrance or to introduce discriminative arrangements. The Arctic Economic Council is a new example. In the 2013 Kiruna Declaration, Ministers from the eight Arctic Council states decided to establish a task force to facilitate the creation of a circumpolar business forum. In December 2013, The Task Force to facilitate the Circumpolar Business Forum proposed a new name for the circumpolar business forum, the Arctic Economic Council, which Senior Arctic officials approved in January 2014. The Arctic Economic Council will foster business development in the Arctic, engage in deeper circumpolar cooperation, and provide a business perspective to the work of the Arctic Council.3 The question is whether or not the Arctic Economic Council will exclude the nonArctic economies regardless of possibly having been granted permanent observer status. Arctic governance on the other side is non-market-oriented, in terms of environmental protection and climate change. In other words, enlarging the group will not necessarily bring about competition, but rather bring more members to share interests as well as costs, hence fewer costs to original members. Exactly for the two considerations — seeking fewer sharers of interests and more investors of public goods, the Arctic countries are prone to take an open and inclusive attitude on issues of climate change, environment and ecology by seeking common interests and common responsibility with extra-regional actors, while taking exclusive policies on issues 3

Arctic Council, 2014, ‘Arctic Economic Forum’. Available at http://www.arcticcouncil.org/index.php/en/arctic-economic-council (accessed on July 24, 2014).

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of resources. Just as Olav Schram Stokke puts it, when it comes to resource allocation, the fewer members the better; when it comes to sharing of cost, the more members the better.4 In sum, considering only their own interests, the Arctic countries are fully justified in either incorporating or denying extra-regional participants. In this case, it is an option not to categorically accept extra-regional countries in the Arctic governance mechanism. Any candidate member should prove himself to be associated with the club to a very large extent and its contribution should be greater than its share of interests. Moreover, extra-regional participants should not exert overdue influence on the policy decision of the regional club, lest intra-regional countries lose their predominance over regional affairs. Tactics and diplomatic practices of the Arctic countries The Arctic countries vary in their considerations over whether they should incorporate extra-regional countries, which countries or national organizations should be accepted, and in what way to be accepted. Relatively speaking, Russia and Canada, two big powers in the region, attach more importance to sovereignty and demarcation lines in Arctic affairs, while the Nordic countries and the United States are more in favor of international cooperation. The former Secretary of State Hilary Clinton expressed discontent of the exclusive meeting arranged by Canada in Chelsea, Québec in March 2010 by saying that the tasks of the Arctic affairs are so heavy and time is so urgent that the Arctic Council needs broad participation.5 The following Nuuk meeting and the Kiruna meeting have basically formed the tactics of the Arctic Council on how to cope with its relations with important non-Arctic countries. 4 5

Stokke, 2012. Bergh, 2012, p. 11.

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First, on the issues of allocating resource interests, which are also to the interests of external actors, the Arctic countries have effectively divided them into two levels, national level and regional level, by treating the environment and climate change issues as issues of international cooperation, while leaving the ownership of resources to the disposal of national governments, thus successfully preventing extra-regional countries from affecting the allocation of the Arctic resources through participation in regional platforms. The Arctic Council thus applies either the form of a formal organization or a form of informal consultation to handle intra-regional relations and interregional relations separately, which can ensure that public goods are provided by extra-regional actors and also restrain extraregional actors from sharing interests. Second, the Arctic Council has raised the threshold and separated the rights of intra-regional countries from the rights of extra-regional countries to ensure policy exclusiveness and prevent extra-regional countries from organizing alternative mechanisms should they be denied access to the Arctic Council. An alternative mechanism outside of the Arctic would have confronted the intraArctic regional mechanism. ‘Except other reasons, the non-Arctic countries will manage to establish alternative forum if the East Asian countries are denied of formal observatory states’, said Alexander Sergunin, a Russian scholar, when talking on Russia’s change of position in the last minute agreeing East Asian countries to become formal observatory states.6 Thus, the Arctic countries finally decided to handle the issue of extra-regional countries’ participation in the Arctic affairs by granting limited access and discriminative rights. The Ministerial Meeting of the Arctic Council in 2013 passed the Kiruna Declaration which welcomed the extra-regional countries 6

Sergunin, 2013.

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of China, South Korea, and others to become permanent observer states and emphasized the responsibility of the observer states to contribute through their provision of scientific and expertise knowledge, information, and financial support.7 The Observer Manual released at the time of the meeting made it clear: ‘Decisions at all levels in the Arctic Council are the exclusive right and responsibility of the eight Arctic States with the involvement of the Permanent Participants. All decisions are taken by consensus of the Arctic States. The primary role of observers is to observe the work of the Arctic Council. Furthermore, observers are encouraged to continue to make relevant contributions through their engagement primarily at the level of working groups’.8 This dichotomy is apparently aimed at restricting extra-regional countries’ participation in the decision-making process, and at the same time encouraging external contribution to the areas mentioned earlier. The Nuuk documents and Observer Manual have clarified the relationship between the Arctic states and extra-regional countries, and specified the standards, methods, and paths of introducing external influence.9 Before becoming observer states, the nonArctic countries have to recognize the sovereignty and jurisdiction of the Arctic countries, they must not put forward governance 7

Arctic Council, ‘Kiruna Declaration, On the Occasion of the Eighth Ministerial Meeting of the Arctic Council’, MM08-15, Kiruna, Sweden, May 15, 2013. Available at http://www.arctic-council.org/index.php/en/document-archive/ category/425-main-documents-from-kiruna-ministerial-meeting (accessed on July 24, 2014). 8 Arctic Council, 2013, ‘Observer Manual For Subsidiary Bodies’. Available at http://www.arctic-council.org/index.php/en/document-archive/category/425main-documents-from-kiruna-ministerial-meeting (accessed on July 24, 2014). 9 The Seventh Ministerial Meeting of the Arctic Council, 2011, ‘Nuuk Declaration. On the occasion of the Seventh Ministerial Meeting of the Arctic Council’, Nuuk, Greenland, May 12, 2011. Available at http://www.arctic-council.org/index.php/ en/document-archive/category/5-declarations (accessed on July 24, 2014).

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proposals that transcend the policy goals of the Arctic countries and permanent participants, they must not challenge the legal framework that is already established and recognized by the Arctic Council and they must respect the culture, interests, and values of the Arctic region. Obstacles to the observer states are designated at the operational level as well. Firstly, the participation is indirect, i.e. the bill of observer state must be submitted indirectly through the Arctic countries. Secondly, the influence is ceilinged, i.e. contribution of project funding must not be larger than the Arctic countries’. Thirdly, the identity is passive in that the participation status is non-permanent or needs to be reappraised continuously, which can be used as weakening the influence of the extra-regional countries in the Arctic and their legitimacy of participating governance.10 By admitting extra-regional countries’ participation in this way, the Arctic Council has reached its dual goals of restriction and exploitation, and effectively enhanced the Arctic importance in the global politics. The significance and responsibility of non-Arctic countries’ participation in the Arctic affairs This chapter shall take China as an example to explore how to improve the Arctic governance mechanism by incorporating nonArctic factors and how to rationally and legitimately realize the extra-regional countries’ interests in the Arctic. Extra-regional participation: Beneficial for improving the governance system and realizing goals of governance Incorporation of extra-regional countries into the Arctic Council is determined by the Arctic governance’s needs and the world 10

Arctic Council, 2013, ‘Observer Manual For Subsidiary Bodies’. Available at http://www.arctic-council.org/index.php/en/document-archive/category/425main-documents-from-kiruna-ministerial-meeting (accessed on July 24, 2014).

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development trend. In view of the economic theory of social institutions, if the original institution can no longer ensure the efficiency of regional governance and a positive result, it is necessary to replace it with a more efficient one. If a new institutional arrangement can take into account the aggregate costs and benefits, it will increase the general social benefit and economic benefit.11 The presence of the extra-regional competitors is beneficial to the improvement of the governance system. Just as Susan Strange has put it, what a global governance system lacks is a competitor or an opponent, which is an instrument which is used to ensure the free countries to assume the responsibility of democracy. If an authority wants to be acceptable, efficient, and respectable, a sort of united strength must be available that can check the abuse of power for self-interest, and ensure the use of power at least in part is in favor of public interest.12 The Arctic countries approach Arctic governance by sharing the burden inclusively while enjoying the interests exclusively. This will prevent the Arctic governance from effectively incorporating new factors, which will lead to ignoring important issues of governance. Participation of important extra-regional countries can replenish the factors possibly ignored by the Arctic countries for sake of self-interest, and put forward important programs, especially ones that help to address the contradiction between the interests of the Arctic countries and the common interests of the mankind, and to solve the institutional lagging of the Arctic governance mechanisms. Taking China as an example, at the global level, China is a global economic power, a Permanent Member of the UN Security Council, a signatory to the United Nations Convention on the Law of the Sea (UNCLOS), and an important constructor of many international regimes of environmental protection. This status determines that China can play a 11 12

Huang, 2008, p. 163. Strange, 1996, p. 23.

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leading and coordinating role in peace-keeping, rationally handling contradiction between state sovereignty and the common heritage of mankind, balancing between interests of the Arctic countries and those of the non-Arctic countries, and protecting the fragile Arctic environment and common home of mankind. Moreover, important extra-regional countries can provide public goods, and thereby play a direct role of fulfilling the tasks of Arctic governance. China is highly valued by some Arctic countries for its capitals, market, and capabilities in infrastructure construction. The international scientific community regards Chinese polar scientists as an important contingent in addressing polar scientific conundrums. Since Arctic governance needs a system involving land-based, marine, and aerial and space technologies to monitor and prevent outbreaks of incidents, China is exactly one of the few countries equipped with such technology systems to provide the Arctic research and development and economic activities with the public goods.

How do non-Arctic countries substantiate their self-interest and bear their responsibility? Although extra-regional countries do not own territories and territorial seas in the Arctic region, they can equally enjoy rights ruled by international laws. Oran R. Young, the internationally famous theorist of governance, points that extra-regional countries are entitled to use a series of marine rights, like navigation rights, rights of fishing in blue-waters, rights of laying submarine cables, and rights of overfly.13 Take China as an example. China is a signatory of important international treaties like the Svalbard Treaty, also known as the 13

Young, 2012, p. 282.

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Spitsbergen Treaty and the UNCLOS. Like other signatories, China assumes due obligations as well as enjoying rights in many aspects in the Arctic region. According to the Svalbard Treaty, Chinese ships and nationals shall enjoy equal rights to fishing and hunting in the territories specified in the treaty and in their territorial waters. Furthermore China shall have equal liberty of access and entry for any reason or object whatever to the waters, fjords and ports of the territories, and carry on there without impediment of any maritime, industrial, mining, and commercial operations on a footing of absolute equality. According to the UNCLOS, Chinese ships and aircraft enjoy the freedom of navigation and overfly across the exclusive economic zones (EEZs) of the Northern circumpolar countries, freedom of navigation in the international seas of the Arctic Ocean, and enjoy the rights of a flag state specified in the treaty. Important extra-regional countries including China claim their interests in the Arctic mainly comprise environmental interest, navigation interest, resource interest, maritime scientific exploration interest, and so on.14 As an emerging power that accounts for onesixth or more of the global population, China is home to the energy utilization, product processing, and consumption on a world scale. China is also an important market to the Arctic economies. As a big power of trade in the Northern hemisphere, the legal system of maritime navigation bears directly on China’s navigation interest. Any change in the nature of the Arctic region will have impacts on the sea waters and the climate of China’s periphery. Therefore, the Arctic scientific exploration and research will exert far-reaching impacts on China’s social economy and development of science and technology. Although extra-regional countries enjoy justifiable and legitimate rights in the Arctic, the Arctic countries care very much about any 14

Qu et al. (eds.), 2011, p. 283.

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extra-regional countries ‘claim of their interests in the Arctic, and in particular, they are suspicious of the fast economically rising of China. In this circumstance, extra-regional countries should not realize their interests in the Arctic region only by resorting to their own interest and ability, but rather by resorting to the reconciliation between international mechanisms and domestic policies. As for its role in the Arctic affairs, China should conduct adjustment among the three variables: the Arctic countries’ expectation and definition of China, the non-Arctic countries’ expectation and definition of China, and China’s definition of itself, seeking commonality in the contradictions. Seeking common interests, reducing conflicts of interests and creating new shared interests require cautious and correct assessment on the change of the natural environment and the change of politico-economic order in the Arctic region and full exploitation of the existing international mechanisms to acquire and protect legitimate interests. In participating in the Arctic affairs and realizing its interests in the Arctic, China should observe these three principles of ‘following’: follow the cardinal principles of the international laws; follow the trends of the economic globalization; and follow the necessity of the bilateral interests between China and relevant countries. While China is enjoying the rights of participating in the Arctic affairs and acquiring relevant rights according to relevant international laws, China should also assume the global responsibility of keeping peace and maintaining environmental-friendly, sustainable development in the Arctic region. Major extra-regional countries’ responsibility in the Arctic should be carried out in multiple levels. First, they should assume big-country responsibilities at the global level, such as the responsibility in global organizations like the United Nations to make their own contribution to the Arctic environmental governance, climate change, and ecological protection, insist on the importance

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of environmental protection and oppose any exploration at the cost of the environment. Second, they should play a positive role in the Arctic regional organizations, strengthen ties and communication with governance organizations such as the Arctic Council, and highlight the necessity of the extra-regional countries’ participation. They should also increase the vigor of their participation in domains and functional issues of navigation, environmental protection, tourism, and resource exploration, in order to allow the future mechanisms and arrangements take in to account global interests, extra-regional countries’ interests and the interests of the big trader from other part of world. Third, they, as the cooperators in the Arctic, should pay great attention to the social responsibility while conducting economic and scientific and technological cooperation with the Arctic countries. Besides realizing win–win bilateral interests, they should demonstrate humanitarian concerns and environmental concerns in the host countries to its investment and cooperation.

References Bergh, K., 2012, ‘The Arctic Policies of Canada and the United States: Domestic Motives and International Context’, (Stockholm, Stockholm International Peace Research Institute), SIPRI Insights on Peace and Security, 2012/1, 11. Fan, Y. and Bao, S., 2011, Regional Public Good: Theory and Practice, Shanghai: Shanghai People’s Press, in Chinese. Huang, X., 2008, Contemporary Western New Political Economics, Shanghai: Shanghai People’s Press, in Chinese. Qu, T. et al. (eds.), 2011, The Arctic Studies, Beijing: Maritime Press, in Chinese. Sergunin, A., 2013, ‘Russia and the East Asian Countries in the Arctic: An Emerging Cooperative Agenda?’, paper presented at the SIPRI/IMEMO International Workshop, Moscow, October 1, 2013. Stokke, O.S., 2007, ‘Examining the Consequences of Arctic Institutions’, in Stokke, O.S. and Hønneland, G. (eds.), International Cooperation and Arctic Governance: Regime Effectiveness and Northern Region Building, London: Routledge, pp. 13–26.

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Stokke, O.S., 2012, ‘Arctic Change and International Governance’, speech at SIIS– FNI Workshop on Arctic and Global Governance, Shanghai, November 23. Strange, S., 1996, The Retreat of the State: The Diffusion of Power in the World Economy, Cambridge: Cambridge University Press. Young, O.R., 2012, ‘Informal Arctic Governance Mechanisms: Listening to the Voices of Non-Arctic Ocean Governance’, in Young, O.R., Kim, J.D. and Kim, Y.H. (eds.), The Arctic in World Affairs: A North Pacific Dialogue on Arctic Marine Issues, Seoul: KMI Press, pp. 275–303.

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Chapter 3

Can Asian Involvement Strengthen Arctic Governance?1 Olav Schram Stokke

What stakes do Asian states have in the Arctic and how will their rising involvement affect Arctic governance? In late 2012, the first liquefied natural gas (LNG) tanker to sail through the Northern Sea Route (NSR) reached its destination in Japan, carrying gas from a Norwegian offshore field. That same year, a Korean-owned naval architecture and engineering company had won the contract for designing the long-awaited new icebreaker for Canada’s coast guard, and China had completed its fifth Arctic marine survey from its own ice-capable research vessel. China, India, Japan, and South Korea have all established research stations in the Arctic archipelago of Svalbard. The process that led up to these states also achieving permanent observer status on the Arctic Council in 2013 exposed worries among some regional actors over sovereignty issues, the visibility of indigenous concerns, and Arctic environmental protection. This article argues that deeper Asian involvement in Arctic affairs can only strengthen international governance efforts in key 1

This chapter is an abridged, updated version of my article, Stokke, 2013, pp. 474–479. 51

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areas like sustainable development, safety at sea, and environmental protection, whereas the potential drawbacks are modest. I review the main concerns voiced regarding outside influence over Arctic affairs, and then show that effective governance of this region will require active support by non-Arctic states within a range of global institutions. Thereafter I ask whether such support can be generated by deeper non-Arctic involvement in the work of the Arctic Council. The final section summarizes the argument and draws some conclusions relevant to policy decisions by the states involved. Arctic stakes of Asian states An institution’s ‘stakeholders’ are those actors who are affected by the institution or are capable of influencing its performance. Evidence of Asian-state interest in the Arctic is ample and not really as new as many believe. Japan set up an Arctic research station in the early 1990s and funded the major share of the hitherto most comprehensive multinational research project on the physical, economic, and political conditions for broader use of the Northern Sea Route. China’s ice-capable research vessel, the Xuelong (Snow Dragon), was acquired two decades ago, and the government agency responsible for polar activities added ‘Arctic’ to its name already in 1996. Companies from China, Japan, and Korea are already at work on the Norwegian continental shelf, and Indian firms are reported to have engaged in commercial negotiations with Russian license holders in Yamal-Nenets in Western Siberia as well as in Sakhalin. The world’s shipbuilding industry is dominated by Asian firms today. Korean companies in particular have positioned themselves for an Arctic market, not least through the recent acquisition of the Aker Yards, with its world-leading technology in ice-strengthened cargo ships. And finally, as regards polar diplomacy, the major Asian maritime states are members of the correspondence group under the International Maritime Organization (IMO) tasked with negotiating a legally binding Polar Code that

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will upgrade today’s voluntary guidelines for ships operating in icecovered waters. In short, these applications for permanent observer status in the Arctic Council are among the many manifestations of Asian-state interest in the Arctic, and of the increasing preparedness to engage in a broad range of Arctic activities. Two concerns voiced about this development deserve attention. One is that deeper involvement on the part of these powerful actors might, in the long term, undermine the primacy of regional states in Arctic affairs; the second is that it might jeopardize the unique and prominent position that indigenous peoples have obtained within the Arctic Council. The first-mentioned concern has probably carried greater political weight, but neither of the two is compelling, as we shall see. Arctic sovereign rights Regional worries over new players in Arctic politics derive from clearly discernible geopolitical and geoeconomic shifts, reinforced by recent debate on the adequacy of the legal framework for Arctic governance. The USA is still well ahead of any Asian competitor in its capacity for military power projection and remains the world’s strongest economy by far, not least in terms of technology and innovation. Yet, many years of growth rates considerably lower than those achieved by several large ‘emerging economies’, like China and India, have made clear that this ranking is not written in stone. Although another Arctic state, Russia, remains the world’s number two military power, China is rapidly narrowing the gap, especially as regards conventional capability. Moreover, Russia’s economic structure is in general less diversified and more dependent on resource extraction than are those of the leading Asian states. And Moscow has somewhat mixed feelings about the surge in Chinese investments in, and immigration to, the Russian Far East.

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To this general geopolitical backdrop, with the Arctic states alert to any sign of relative decline, we should add a region-specific component: recent warnings by some practitioners and observers of an ongoing race for natural resources in the Arctic and of regional states allegedly engaging in ‘unilateral grabs’ and approaching a ‘diplomatic gridlock’. However, as the states bordering on the Arctic Ocean (Canada, Denmark, Norway, Russia, and the USA) announced in their 2008 Ilulissat Declaration: ‘By virtue of their sovereignty, sovereign rights and jurisdiction in large areas of the Arctic Ocean the five coastal states are in a unique position … [and] have a stewardship role’ in protecting its ecosystems.2 In essence, this declaration reminded the world that the geopolitical struggle over regulatory competence in the Arctic had in fact been settled in 1982 with the UN Law of the Sea Convention (UNCLOS), which is no less applicable in the Arctic than elsewhere. That Convention differentiates the competence to regulate ocean use by activity and distance from the coast, placing the coastal states at the helm regarding the exploitation of hydrocarbon and mineral resources on generously defined continental shelves and regarding the exploitation of living resources in these states’ 200-mile exclusive economic zones (EEZs). The new wariness of some Arctic states to non-Arctic stakeholder claims reflects not only a broader power shift in world affairs but also recent debate on whether the legal framework for Arctic governance is due for revision. Wariness as regards revisionism goes poorly with the tendency of some Asian observers to approach Arctic affairs with concepts and arguments that imply communal ownership, notably ‘the common heritage of mankind’. This term has enjoyed some currency in debates over Antarctica, where various national claims to sovereignty are unrecognized beyond the group of claimants, but 2

Ilulissat Declaration, 2008. Available at http://oceanlaw.org/downloads/arctic/ Ilulissat_Declaration.pdf (accessed on April 9, 2014).

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it lacks relevance in the economically attractive parts of the Arctic where coastal-state sovereignty is not at issue. Thus, retired Rear Admiral Yin Zhuo was interpreted by many as tending towards revisionism when he reportedly remarked that the ‘Arctic belongs to all the people around the world as no nation has sovereignty over it’.3 Variants of the ‘global commons’ argument are reportedly pervasive also in Indian discourses on the Arctic, alongside with those recognizing the fundamental legal and political differences between the two polar regions. While no such revisionism is traceable in any official statement by an Asian government, those who are skeptical to non-Arctic involvement, or have a financial interest in such skepticism, have nevertheless been blowing the sovereignty whistle: for instance, Russian Navy Commander-inChief Vladimir Vysotsky has warned about ‘the penetration of a host of states which … are advancing their interests very intensively, in every possible way, in particular China’, adding that Russia will ‘not give up a single inch’ of Arctic ground.4 Russia and Canada generally place sovereignty issues higher up on their list of Arctic priorities than do other regional states — partly because theirs are by far the longest Arctic coastlines, and partly because some of their unilateral and stricter-than-global Arctic shipping regulations have been challenged on legal grounds by other states. However, any worries that greater Asian involvement in Arctic affairs might undermine the sovereign rights of the coastal states in the region are unfounded. Those rights derive not from Arctic activities or regional patterns of diplomacy, but from globally accepted and regionally applicable international law. UNCLOS has 166 parties as of January 2014, with the USA as the sole major power not to have ratified. As the main provisions of UNCLOS reflect international customary law, they are binding on all states. 3 4

Chang, 2010. Faulconbride, 2010.

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As did China and India, the Arctic states supported and promoted the division of competence that emerged in the Convention; they were also among the greatest winners in terms of spatially extended jurisdiction. Altering the basic deal underlying the existing legal order for the Arctic would therefore go counter to the interests not only of Arctic states, but to those of the geoeconomically ascendant Asian states as well. The Arctic Council and the indigenous voice Also questionable is the second concern as regards the rising involvement of non-regional states. Among the premises for Canada’s Arctic policy, those originating with the country’s indigenous populations loom large, and go a long way in explaining Canada’s skepticism to granting the European Union (EU) a formal role in the Arctic Council.5 Prior to filing its application for observer status, the EU had introduced a ban on trade in seal-skin products, economically and symbolically important to certain indigenous populations. More generally, some indigenous-peoples’ representatives worry that involving political and economic heavyweights like the EU, China, and India might divert the attention paid to indigenous concerns, as well as affecting their own access to high-level decision makers within the council framework. Three observations indicate that such worries are exaggerated. First, indigenous concerns have always been only one of several matters deemed highly important by the Arctic Council; the rising aspirations of this body to produce research-based policy premises on salient issues like energy and shipping developments, and to improve capacities for search and rescue as well as oilspill preparedness and response, reflect the priorities of Arctic states, not Asian ones. Second, it cannot be assumed that the new applicants 5

Phillips, 2009.

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will promote an agenda that is insensitive to indigenous concerns in the Arctic, and involvement in council activities is among the factors likely to enhance such sensitivity. Third, the status that six transnational indigenous-peoples associations have as Permanent Participants in the council ensures ‘full consultation … [in] all meetings and activities of the Arctic Council’,6 implying a considerably stronger basis for building alliances and influencing deliberation than is otherwise common for non-governmental organizations in international diplomacy. In contrast, the observer status applied for by Asian states entails only a right to submit documents and to make statements, with the latter even being subject to the discretion of the chair. Observer status therefore provides no formal or de facto basis for exerting pressure on council decisions — only an opportunity for non-Arctic states to have their voice heard by those who make the decisions. Granting such status to the modest number of current new applicants is unlikely to detract significantly from the prominence of the Permanent Participants in the activities of the Arctic Council. Asian involvement and Arctic governance Deeper involvement by Asian players has every potential to generate win–win situations. Much of the activity that gives rise to Arctic environmental challenges either occurs outside the region or falls under the jurisdiction of non-Arctic states. This is true for a majority of the persistent organic pollutants (POPs) and heavy metals that threaten to damage regional ecosystems, as well as the greenhouse gases that drive up Arctic temperatures. Shipping remains a highseas freedom, also within the EEZs, although special rules can 6

Arctic Council Rules of Procedure, 1998, Article 5. Available at www.arcticcouncil.org, (accessed on April 9, 2014).

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apply in ice-covered waters in accordance with the UNCLOS ‘ice article’, Article 234. Dealing effectively with these key Arctic challenges requires regulatory action in broader international institutions, typically global ones like the Stockholm POPs Convention, the UN-based climate regime, and the IMO. Such regulatory action in relevant broader institutions is more likely if leading non-Arctic states, including Asian ones, can have a clear understanding of the Arctic dimension of global issues and firm ownership in the research that has substantiated that dimension. The Asian states that are now permanent observers have significant and rising polar research programs that can support the Council’s core activities — knowledge-building and capacity enhancement. Consider for instance the cooperative assessments produced by the Arctic Council on how global change will affect regional opportunities and challenges, most recently the Arctic Marine Shipping Assessment. The political energy inherent in these assessments serves to raise the saliency of the Arctic dimension of broader problems and helps to mobilize political energy in the broader international institutions that have regulatory competence. Thus, by welcoming non-regional states into Arctic Council activities, the Arctic states may improve their ability to stimulate regulatory advances in broader institutions that are crucial to Arctic governance. Such involvement makes excellent sense for Asian states as well — not only because of the geophysical climate interdependencies with their own countries, but also because the Arctic Council is the hub of several dense and enduring transnational networks of Arctic researchers, officials, and political decision makers. Those who contribute to the research and other working group activities under the council gain access to these networks and to potentially useful information on how Arctic states and other important players think and plan concerning regional developments. Even in areas where

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rule-making authority rests firmly with the coastal states, such as offshore energy development, non-Arctic companies may obtain lucrative roles if they can offer globally competitive technological solutions, equipment, or venture capital. Conclusions Thus, we see that deeper Asian involvement in the work of the Arctic Council should be regarded as a promising development for Arctic governance. It poses no significant threat to the primacy of regional states or the prominence of indigenous concerns. The only potential influence conferred by observer status would be through persuasive arguments, which should always be welcome in international deliberations. Moreover, whereas the Arctic Council itself is gradually growing into a decision-shaping role, the council can shape decisions in areas only where the Arctic states allow it in — and that will not happen in the many and politically salient issues where international law confers exclusive management authority to the coastal state. Thus, the gains that Asian states can obtain from deeper involvement in the Arctic Council concern not primarily political influence, but access to the networks of research, business, and governmental actors centered on the council, providing information on plans, developments, and cooperative opportunities in the region. For the Arctic states, deeper Asian involvement in council activities promises to strengthen the pool of knowledge that underpins the council’s own policy recommendations, as well as supporting the persuasiveness of those recommendations in a series of global governance institutions crucial to the Arctic in areas like shipping, climate change, and environmental toxins. References Chang, G., 2010, ‘China’s Arctic Play’, The Diplomat, March 9, 2010. Also available at http://thediplomat.com/2010/03/chinas-arctic-play/ (accessed on April 9, 2014).

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Faulconbride, G., 2010, ‘Russian Navy Boss Warns of China’s Race for Arctic’, Reuters, October 4, 2010. Also available at http://www.reuters.com/article/ 2010/10/04/russia-arctic-idAFLDE6931GL20101004, (accessed on April 9, 2014). Phillips, L., 2009, ‘Arctic Council Rejects EU’s Observer Application’, EU Observer, April 30, 2009. Also available at http://euobserver.com/885/28043 (accessed on April 9, 2014). Stokke, O.S., 2013, ‘The Promise of Involvement: Asia in the Arctic’, Strategic Analysis, 37, 474–479. Also available at http://www.tandfonline.com/doi/ abs/10.1080/09700161.2013.802520 (accessed on April 9, 2014).

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Chapter 4

High North: High Politics or Low Tension? Cooperation and Conflict in the Arctic Jo Inge Bekkevold

The Arctic is regarded as the last frontier.1 US Deputy Secretary of State Thomas R. Nides declared in a speech in August 2012 that the Arctic ‘... is becoming a new frontier in our foreign policy’.2 With two great powers, Russia and the United States as Arctic littoral states, and with an increased interest in Arctic affairs from a third great power, China, many Western and Asian researchers and commentators have in recent years anticipated confrontation and conflict as states ‘scramble’ and ‘race’ for resources and control in the region as the outcome of this increased attention. The German magazine Der Spiegel states online that ‘Amid disappearing ice shelves, the world’s top powers fight over new territory in the Great North’.3 Another Spiegel article is titled ‘Arctic Scramble: Russia to

1

Sennott, 2012. Conley et al., 2013. 3 Der Spiegel Online International, ‘The Race for the Arctic’. Also available at http://www.spiegel.de/international/topic/the_race_for_the_arctic/ (accessed on April 9, 2014). 2

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Flex Military Muscle in Far North’.4 The renowned magazine Foreign Affairs posted an article back in 2009 stating that ‘a Great Game is developing in the Arctic’ and that the region’s geopolitics is rapidly transforming.5 Wall Street Journal published an article in March 2014 titled ‘Cold War Echoes Under the Arctic Ice’.6 In 2007, Russia dropped a canister with a Russian flag at the North Pole to symbolically claim the Arctic seabed as its own. Canada’s Prime Minister Harper stated in an interview early 2014 that Canadian governments have claimed the North Pole since the 1930s.7 China has in recent years been accused of pursuing a more assertive foreign policy,8 and her growing interest in the Arctic is apparently also raising some concern among littoral states, China’s Asian neighbors and the international community.9 Great power politics and somewhat alarmist statements and observations as those cited earlier may leave one with the impression that the Arctic is characterized by high politics and high tension. However, this is not an assessment shared by everyone. China scholar Linda Jakobson stated in an op-ed in Financial Times in May 2013 that ‘Beijing’s Arctic goals are not to be feared.’10 In the late 2000s, Norwegian Minister of Foreign Affairs Jonas G. Støre 4

Der Spiegel Online International, 2013, ‘Arctic Scramble: Russia to Flex Military Muscle in Far North’. Also available at http://www.spiegel.de/ international/europe/russian-president-vladimir-putin-plans-military-expansionin-arctic-a-938387.html (accessed on April 9, 2014). 5 Borgerson, 2009. 6 Barnes, 2014. 7 Chase, 2014. 8 For an introduction to this debate, see for instance: Gill, 2013; Johnston, 2013; Yahuda, 2013, pp. 446–459. 9 Jakobson & Peng, 2012, National Institute for Defence Studies, 2011, ‘East Asian strategic review 2011’, (Tokyo, The National Institute for Defense Studies), Also available at http://www.nids.go.jp/english/publication/east-asian/e2011. html (accessed on July 21, 2014); Wright, 2012; Lundestad & Tunsjø, 2014. 10 Jakobson, 2013(a).

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put forward the slogan ‘High North, Low Tension,’ downplaying the alarmist scenarios. I will in this chapter make the argument that even though both traditional and non-traditional security issues will continue to linger in the Arctic region, and as such conflict cannot be excluded, cooperation seems more likely to prevail. I will base this on an examination of the Arctic policies of three Arctic rim countries, the United States, Russia and Norway, and China as a new stakeholder, along a set of policies and indicators that can cause conflict and indicators that is presumed to increase stability.11 Analyzing cooperation and conflict A wide spectrum of theories seek to explain the causes of inter-state conflict and war, ranging from different factors influencing state leaders individual decision-making processes to changes in the inter-state balance of power.12 However, territorial disputes and scramble for resources, the strategic importance of a region, and arms racing are often at the heart of most inter-state conflicts. Cooperation through trade and investments and participation in international institutions and regimes are believed to contribute to increased inter-state stability.13 What is the situation in the Arctic related to territorial disputes, resources, military-strategic importance and arms racing, trade and investment, and institutions and regimes? Territory: Counter to what many Arctic debates seem to conclude, there are not many unresolved territorial disputes in the 11

In Norwegian discourse the terms ‘High North’ and ‘Arctic’ are often used interchangeably. ‘The High North’ usually refers to the European parts of the Arctic. It is a much used term by Norwegian academics and policymakers and increasingly in international discourse about the north. In this chapter I use the term ‘Arctic,’ and it includes the circumpolar north above the Arctic Circle. 12 Evera, 2001; Coyne & Mathers (eds.), 2011. 13 See Ikenberry, 2000.

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Arctic. Norway and Russia reached an agreement on maritime delimitation in the Barents Sea in 2010, after 40 years of negotiations.14 The border line between the USA and Russia in the Bering and the Chukchi Seas is also agreed on, but remains to be ratified by the Russian parliament. The disagreement between Canada and the USA in the Beaufort Sea, as well as their differences in views on the legal status of the North Western Passage, considered by the USA as international straits, while Canada claims it as internal waters, and a disagreement between Canada and Denmark over Hans Island in the Nares Strait, play at times a role in national identity politics in the respective countries. These disputes however, remain subject to a diplomatic process and seem unlikely to spark a conflict. Arctic coastal states seek to extend their continental shelf beyond 200 nautical miles, but it is expected that this process will be done in accordance with international law. Resources: The recent increased international interest for the Arctic was galvanized by the US Geological Survey’s World Petroleum Assessment of 2000, which was broadly interpreted as attributing 25% of the world’s recoverable undiscovered energy resources to the Arctic.15 However, the expected energy bonanza in 14

See the Joint Statement on Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean, signed by President Dmitrii Medvedev and Foreign Minister Jonas Gahr Støre in Oslo, March 27, 2010. Available at http:// www.regjeringen.no/upload/UD/Vedlegg/Folkerett/030427_english_4.pdf (accessed on July 21, 2014). The ratification process was completed in 2011 and the agreement entered into force on July 7, 2011. 15 This assessment included some of the Arctic areas, USGS, 2000, ‘US Geological Survey’s World Petroleum Assessment 2000 — Description and Results’. Available at http://pubs.usgs.gov/dds/dds-060/ (accessed on July 21, 2014). See also USGS Circum-Arctic Resource Appraisal Assessment Team, 2008, ‘Circum-Arctic resource appraisal: Estimates of undiscovered oil and gas north of the Arctic Circle’, US Geological Survey Fact Sheet 2008−2009. Available at http://pubs.usgs.gov/fs/2008/3049/fs2008-3049.pdf (accessed on October 30, 2014).

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the Arctic is delayed by the recent shale gas revolution in the United States, and environmental concerns as well as expensive technology and infrastructure linked to deep sea water projects makes larger Arctic offshore energy projects not very likely in a near-term perspective. The oil and gas fields most attractive to develop are suggested to be within the littoral states’ exclusive economic zones (EEZs) or in non-disputed shelf in the Arctic Ocean.16 An important question however, is how open Arctic littoral states are allowing for foreign investments in a strategic sector as energy, including from new Asian stakeholders. The Arctic region is also rich on minerals. Greenland has the potential to establish itself as a major exporter of rare-earth elements, and is already negotiating investments in its extractive from a range of countries, including from China and other Asian countries. A potential conflict area in the future is fishing, as more states are developing distant-water fishing fleets, but currently there is no substantial fish stock available in the Arctic. Military-strategic importance and arms racing: The Arctic region had great geopolitical and strategic importance during the two World Wars and the Cold War. In the First and Second World War, the Arctic waters became strategically important as supply channels. The region’s military strategic importance increased further during the Cold War, as the polar routes played a central role in nuclear deterrence strategies on both sides as passages for strategic bombers, and later for flight paths of intercontinental ballistic missiles. The Norwegian territory played part in the strategy as a forward basing for US and North Atlantic Treaty Organization (NATO) medium range bombers. While this role diminished with development of intercontinental ballistic missiles from the 1960s, the region maintained its other crucial role as an outpost for intelligence gathering and early warning on both sides of the conflict. This role remained important throughout the Cold 16

See Holtsmark & Smith-Windsor (eds.), 2009, Claes & Moe, 2014.

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War and is to some extent significant to this day.17 The strategic importance of the Arctic increased again in the 1970s with changes in the Soviet maritime doctrine, with a large-scale Soviet naval build-up on the Kola Peninsula, and Western responses to this development. The region was considered one of the major confrontation lines in case of an escalation of the standoff into an armed conflict.18 Similarly, Alaska and the Russian Far East played an important role in US and Soviet strategies during the Cold War. However, it is important to note that the military confrontation in the Arctic in the 20th century, during two world wars and the Cold War was over the strategic use of the Arctic space for military purposes, not for control over the area as such.19 With the end of the Cold War, the Arctic was overshadowed by emerging threats and crises in other parts of the world. However, it is a legitimate question to put forward whether the melting of the Arctic ice cap could lead to more military and naval activities in the region, and related, if the Arctic states see an increased sense of risk and traditional as well as non-traditional security threats in the Arctic as a result of increased attention and activity? International regimes and institutions: After the Cold War, multilateral collaboration prospered in the Arctic. Several institutions were established, such as the Barents Euro-Arctic Collaboration, the Arctic Council and the Arctic Military and Environmental Cooperation, geared towards collaboration on cleaning of nuclear waste in North West Russia.20 The most important regime governing the Arctic is United Nations Convention on the Law of the Sea (UNCLOS), while the International Maritime Organization (IMO), the much expected Polar Code, regional fishery management 17

See for instance Tamnes, 1991. Zysk, 2012. 19 Holtsmark & Tamnes, 2014. 20 Tamnes & Eriksen, 1999; Riste, 2005; Børresen et al., 2004. 18

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mechanisms and coast guard cooperation all contribute to cooperation and stability in the region. Trade and investment: In addition to investments in oil, gas, and minerals, the opening of potentially strategically important sea lines of communication between the North Pacific and the North Atlantic for the world trade could contribute to increased economic cooperation between the Arctic states and new Asian stakeholders, including China. It is estimated that the maritime route between Asia and Europe can be reduced by almost 40% using the Northeast Passage or the Northwest Passage, but transit numbers still remain limited and commercial viability of the Arctic shipping routes still belongs to the future. If there is a shared common interest in trade and investment among Arctic littoral states and new Asian stakeholders, this would contribute to increased cooperation. In the following, I will take a closer look at the policies of the four countries Russia, China, the USA, and Norway and along these indicators of conflict and cooperation. Russia in the Arctic Russia is the main player in the Arctic, and demonstrated through its Arctic strategy of 2008 that developing the Arctic is a national priority, with its focus being on resource development, security and stability, the Northern Sea Route (NSR), and sustainable development.21 Russia has named the Arctic a vital state interest, and is upgrading its military assets to secure its interests in the Arctic.22 In September 2013, the Northern Fleet performed a transit along the 21

See Zysk, 2009; and the strategy in Russian: Security Council of the Russian Federation, 2008, ‘Principles of State Policy of the Russian Federation in the Arctic up to 2020 and Beyond’, http://www.scrf.gov.ru/documents/98.html (accessed on July 21, 2014), in Russian. 22 Blank & Kim, 2013.

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NSR with its flagship, the Cruiser PetrVelyki and reopened a former Soviet military base at the New Siberian Islands, an archipelago deemed crucial for monitoring the NSR.23 By implementing improved capabilities, the Northern Fleet is in the process of preparing for more commercial activity along the NSR, and to promote and protect Russian strategic interests in the Arctic. In December 2013, President Putin called for stronger military presence in the Arctic.24 The Russian authorities have emphasized however, that the main purpose of such military preparations is to combat terrorism at sea, smuggling, and illegal migration, and protect aquatic biological resources. In its Arctic strategy, Russian authorities clearly underlined the document’s cooperative character by emphasizing the need to preserve the Arctic as a zone of peace and cooperation, and underlining the role of regional bilateral and multilateral cooperation.25 Russia has been a strong supporter of UNCLOS, and has projected the prevailing message that the country will abide by international law in the resolution of Arctic disputes. Russia anticipates the Polar Code process in the IMO and would consider adjusting national legislation afterwards.26 Russia’s claimed sovereignty over the NSR may cause some friction. Russia’s legislation treats the archipelagos along the NSR as internal waters and Russia claims territorial sovereignty over these parts of the route.27 The US and European Union (EU) position is that the NSR is an international strait as defined by UNCLOS, and do not 23

Staalesen, 2013. Røseth, 2014. 25 See Zysk, 2009. 26 For information about the polar code: IMO, ‘Shipping in Polar Waters’. Available at http://www.imo.org/MediaCentre/HotTopics/polar/Pages/default. aspx (accessed on July 21, 2014). 27 Internal waters include the sea lanes going through to the archipelagos of Novaya Zemlya, Severnaya Zemlya, and the East Siberian Islands and their 24

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recognize Russia’s unlimited regulatory power. China has yet to state an official position. Russia can be both a gatekeeper and a door-opener for China and other Asian countries seeking a larger role in Arctic affairs. It has been argued that Asia’s introduction into the Arctic will strengthen Russia’s position.28 Russia was reluctant to open for China becoming a permanent observer in the Arctic Council, but changed its stand on this issue at the Arctic Council meeting in Kiruna in 2013. One reason for Russia opposing Chinese membership in the Arctic Council was Beijing’s lack of a proper Arctic strategy and Chinese rhetoric creating uncertainty about its stand on Arctic issues and territorial sovereignty in the region.29 Russia would not tolerate Chinese efforts to influence matters that are under the sovereign jurisdiction or rights of Russia as a costal state. This was made explicit by the Russian admiral Vladimir Vysotsky in July 2011 expressing Russian Arctic economic interests as threatened both by NATO and China.30 However, when criteria for admitting observers was agreed upon at the Arctic Council meeting in Nuuk in 2011, with observers bound to adhere to the sovereign rights of the Arctic states and the UNCLOS in the Arctic Ocean, Russia was able to accept new observers in Kiruna in 2013.31 Russian approval of China’s application also reflects Moscow’s overall bilateral relationship with Beijing. Sino-Russian relationship has improved steadily since the early 1990s. Not only Russian acceptance of China as a permanent observer in the Arctic Council, but also the recent Sino-Russian agreements on energy in the Arctic connection to the mainland. The area between Wrangel Island and the mainland is not defined as internal waters. See Østreng et al., 2013, p. 18. 28 Blank & Kim, 2013. 29 Røseth, 2014. 30 Ibid. 31 Ibid.

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indicate this is also true for the Arctic dimension in the relationship. Russia is eager to develop its energy cooperation with China and Japan, partly to reduce its energy interdependence with Europe. As part of a larger Rosneft–China National Petroleum Corporation (CNPC) deal, Rosneft has invited CNPC to explore three offshore fields in the Barents and Pechora Sea in the Arctic, while also suggesting collaboration on an onshore field.32 Russia’s accession to the World Trade Organization in 2012 may contribute to improved market access in Russia for foreign investors. However, the Ukrainian crisis and Russia’s Crimea policy is problematic for Russia’s relationship with Europe and NATO, leading to sanctions and possibly scaring away potential foreign investors, but Russia’s actions in Ukraine also strongly contradicts China’s adherence to non-interference as a fundamental principle in her foreign policy, and is a challenge in Sino-Russian relations. China in the Arctic China has not published an official document on its Arctic policy, which most likely reflects the fact that the region is not a foreign policy priority in Beijing.33 However, China is an increasingly active player in the Arctic, with investments in energy projects in several Arctic states, a growing interest in the NSR and a fast developing research agenda, including a research station on Svalbard and voyages to the region by the research vessel Xuelong (Snow Dragon).34 China’s increased activity may enforce the Chinese government to issue a strategy or policy document to clarify China’s official position on Arctic affairs. In July 2009, Hu Zhengyue, Assistant Minister of Foreign Affairs, delivered the speech ‘China’s Arctic Policy’ during a 32

Katakey & Kennedy, 2013. Jakobson, 2013(b). 34 For an increased research interest, Stensdal, 2013. For a general introduction on China in the Arctic, Jakobson & Peng, 2012. 33

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high north study tour at Svalbard. This speech was developed further and published on the Chinese Ministry of Foreign Affair’s webpage in July 2010 under the title ‘China’s view on Arctic cooperation’,35 which signals that it represents official Chinese views on the Arctic. This speech together with the documents submitted as part of China’s application to become an observer in the Arctic Council is currently the closest to a Chinese policy on the Arctic. With no authoritative Arctic strategy published by the central government, uncertainty has existed on China’s Arctic policy contributing to skepticism in some Arctic littoral states, in particular in Russia, leading up to the Arctic Council Kiruna meeting. Furthermore, in the absence of a strategy, alarmist voices may have been allowed to shape China’s public debate over its Arctic policy and influencing perceptions in other countries.36 At the same time, Hu Zhengyue, Assistant Minister for Foreign Affairs, has clearly stated that China supports both the legal framework of the Arctic, and China accepted the Arctic littoral states’ sovereign rights when it became a permanent observer of the Arctic Council.37 In fact, one of the most remarkable changes in Chinese foreign policy over the last two to three decades is China joining an increasing number of international institutions and regimes, and as such it is no surprise China has joined the Arctic Council, as a permanent observer. China of course joins international institutions in order to pursue national interests, as most countries do. China has in recent years often been presented as an assertive foreign policy actor, and some point to a possible arms race in the Asia-Pacific region.38 China’s foreign policy has led to an increased uncertainty in its neighborhood, and China and Russia have both 35

Chinese MFA, 2010, ‘China’s View of Arctic Cooperation’. Available at http:// www.fmprc.gov.cn/mfa_eng/wjb_663304/zzjg_663340/tyfls_665260/tfsxw_ 665262/t812046.shtml (accessed on July 21, 2014). 36 Lundestad & Tunsjø, 2014. 37 Ibid. 38 Tan, 2014.

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more than doubled their defense spending the last decade. However, as China still spends 2% of its GDP on defense as it did 10 years ago, and Japan still follows its traditional guideline of spending only 1%, it is difficult to argue for an arms race.39 Furthermore, a report on the Arctic from Japan’s National Institute for Defence Studies in 2011 concluded that ‘It is difficult to imagine that countries such as Russia, the United States, and Canada would not be able to adequately enforce security within their own territorial waters’.40 Today’s China is a global player, with global interests, and Arctic littoral states should prepare for a stronger Chinese presence. China’s growing interest and activism in the Arctic are primarily shaped by scientific considerations, commercial interest in the petroleum, shipping and mineral sector, as well as diplomatic and legal concerns.41 China already contributes to Arctic research,42 and China will be one of the main players if the NSR develops into a commercial viable transportation route, not only in sense of being the world’s biggest exporter, but also due to its shipping and shipbuilding capabilities. China’s leasing of the North Korean port

39

Perlo-Freeman & Solmirano, 2014. National Institute for Defence Studies, 2011, ‘Maintaining the order in the Arctic Ocean’, (Tokyo, The National Institute for Defence Studies and The Japan Times), East Asian Strategic Review, pp. 57–85. 41 Lundestad & Tunsjø, 2014. 42 One of many Arctic research projects with Chinese participation is the Norwegian run AMORA project, which overall goal is to increase the understanding of the surface energy balance of the ice-covered Arctic Ocean. The Norwegian Polar Institute is in charge of the project, working together with scientists from the Polar Research Institute of China, the Dalian University of Technology and other international partners. See NPI, 2009, ‘Kick-off Workshop for the Norwegian-Chinese research project AMORA arranged in Shanghai’. Available at http://www.npolar.no/en/news/2009/2009-12-14-kick-off-workshop-amora. html (accessed on April 14, 2014). 40

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of Rajin in 2008 gives China access to the Sea of Japan, and could potentially play an important role in the use of the NSR.43 One possible area of friction might be the fishing industry, when it becomes possible for the Chinese fishing fleet to sail into the Arctic waters. China now has the largest distant-water fishing fleet in the world, operating in Africa, South America, and Antarctica. It is believed that China under-reports to the UN Food and Agriculture Organisation (FAO) the catch of its distant-waters fleets,44 in particular its catches around Africa.45 Russia’s Coast Guard has on several occasions detained Chinese fishing boats and its crew.46 However, currently there is no sustainable fish stock to harvest in the Arctic Ocean.47 The United States in the Arctic The United States is one of the Arctic littoral countries, due to the State of Alaska. The region was in the Cold War, also important to American military strategy, but the region’s strategic importance for the USA was reduced as the Cold War ended. In the late 2000s, the Arctic started to get more attention in policy circles in the USA. The administration of George W. Bush initiated a review of US Arctic policy and issued a national security and homeland security presidential directive in January 2009. The Obama administration maintains that the 2009 directive continues to represent US Arctic policy, while at the same time it has added several policy statements

43

Jakobson & Peng, 2012. Vidal, 2013. 45 European Parliament, 2012, The Role of China in World Fisheries, Brussels, European Union. 46 Clover, 2012. 47 See FAO, 2013, The State of World Fisheries and Aquaculture 2013, FAO, Rome. 44

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on the Arctic.48 The USA has yet to ratify the UNCLOS, but it considers the main provisions as customary international law, and it does not see a need to develop any new comprehensive legal regime to govern the Arctic. US policy confirms that it has ‘broad and fundamental national security interests’ and ‘fundamental homeland security interests’ in the Arctic.49 US Secretary of Defense C. Hagel recently stated that ‘the Arctic is becoming more important, and regardless of the rate and scale of change, we must be ready to contribute to national efforts in pursuit of strategic objectives in the region’.50 In recent years, the Arctic has been explicitly included in the maritime strategy, the national defense strategy, and the quadrennial defense review of the United States. The unified command plan modified the command structure for the Arctic, sharing the region between the US Northern Command and the US European Command, while leaving the US Pacific Command without regional responsibilities.51 The general view is that ‘US national security interests for the Arctic region reflect the relatively low level of threat in a region bounded by nation states that have not only publicly committed to working within a common framework of international law and diplomatic engagement, but also demonstrated ability and commitment to doing so over the last 50 years.’52 The USA played a constructive behind the scene role securing China, India, Japan, Singapore, and South Korea a seat at the Arctic Council table as permanent observers. USA and China began to hold an annual 48

Lundestad & Tunsjø, 2014. Ibid. 50 US Department of Defense, 2013, ‘Arctic Strategy’, p. 1. Also available at http://www.defense.gov/pubs/2013_Arctic_Strategy.pdf (accessed on April 14, 2014). 51 Conley et al., 2013, p. 9. 52 US Department of Defense, 2011, ‘Report to Congress on Arctic Operations and the Northwest Passage’, p. 8. Also available at http://www.defense.gov/pubs/ pdfs/Tab_A_Arctic_Report_Public.pdf (accessed on April 15, 2014). 49

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dialogue on the law of the sea and polar issues in 2010, as a part of the US–China Strategic and Economic Dialogue. The fifth US– China Dialogue on the Law of the Sea and Polar Issues was held in China in March 2014, with experts from USA and Chinese foreign affairs and maritime agencies exchanging views on a wide range of issues related to oceans, the law of the sea, and the Polar Regions.53 Norway in the Arctic The High North is of great strategic importance to Norway, mainly due to two factors. The first concerns the region’s economic potential. The Barents Sea houses a major share of Norwegian fishery resources, and the region has the potential to become a new source of oil and gas. Accordingly, the High North has traditionally been, and is likely to continue to be, of great importance to Norway’s economy. Secondly, Norway’s High North has a geopolitically important location next to Russia. Historically, relations with Russia, previously as the Soviet Union have been relatively good, even during the Cold War. Yet, Russia remains an unpredictable neighbor with major economic and security interests in the Arctic. Although Norway and Russia share many interests in the north, there are also conflicting views, notably with regard to the basis for Norwegian resources management in the fisheries protection zone and — potentially — on the continental shelf around Svalbard. It remains important for Norway to balance Russia with a firm foot in NATO, at the same time as it nurtures cooperation with its eastern neighbor on many Arctic-specific matters. With the delimitation agreement between Norway and Russia in 2010, Norway has established all its borders, including those in the Arctic. Russia and Norway may have different national interests, but when it comes to preservation and administration of the fishery resources in the 53

US Department of State, 2014, ‘The United States and China Complete Dialogue on Law of the Sea and Polar Issues’. Available at http://www.state. gov/r/pa/prs/ps/2014/04/224280.htm (accessed on April 15, 2014).

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Barents Sea, both nations have the same interest in ensuring that the fish taken out of the sea is within the ecological limits for a sustainable stock. Thanks to good cooperation, Norway and Russia have been able to agree on such a fishery management scheme since the early 1970s. An excellent cooperation between the Norwegian Coast Guard and relevant Russian authorities has been an important conflict management element in this cooperation.54 In 2005, the Stoltenberg government declared the High North a strategic priority of its foreign policy.55 One year later the Norwegian Government launched its High North Strategy.56 Norway has conducted a very active Arctic diplomacy creating arenas with important allies in order to inform about Norwegian priorities, shape the agenda in the High North, position itself as a major player, and gain understanding for its views and interests. The diplomatic efforts that started towards major allies in the mid-2000s were towards the end of the decade broadened to include the Asian countries that sought permanent observer status in the Arctic Council, and Norway has developed Arctic dialogues with several Asian countries. There are several reasons for Norway welcoming a stronger presence of Asian countries in Arctic matters. First, Norway finds it important to engage with new stakeholders at an early stage in order to promote a common understanding of developments in the Arctic. Secondly, Norway believes Asian countries have both the financial means and the expertise in research and technological 54

Skram & Gade, 2013. Soria Moria Declaration, 2005, ‘Platform for the government cooperation between the Labour Party, Socialist Left Party and the Centre Party September 2005’. Available at http://www.regjeringen.no/upload/SMK/Vedlegg/2005/regjeringsplatform_SoriaMoria.pdf) (accessed on February 19, 2014), in Norwegian. 56 Norwegian MFA, 2006, The Norwegian Government’s High North Strategy, Oslo: Ministry of Foreign Affairs. 55

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development to play a greater role in the Arctic than is currently the case.57 The common interest shared by Norway and all the Asian countries in climate change research is one obvious example. Thirdly, the Asian countries in concern are among Norway’s largest and most important trading partners, including in sectors of relevance for the Arctic. Finally, Arctic diplomacy in various forms with Asian countries provide Norway with an additional platform to discuss economic co-operation and other foreign policy issues of common interest with the two emerging giants China and India, and with the three economic powerhouses Japan, Singapore, and South Korea.58 Concluding observations This brief analysis of cooperation and conflict in the Arctic is of course not able to do justice to the full complexity of Arctic issues, but it is still safe to conclude that the Arctic region is a ‘low tension area’. Most territorial disputes are solved. Most of the natural resources, oil and gas, are located in undisputed waters, not in disputed areas. Arctic littoral states have managed to collaborate on matters like fisheries, even during the Cold War. They did so because of shared interests, and they created viable institutions which enhanced stability and helped to prevent disagreements from emerging or escalating. Institutions have contributed to the stability in the Arctic, in particular the UNCLOS. There are outstanding legal claims among coastal states, but with the Arctic being primarily a maritime domain, they agree that the law of the sea provides the applicable legal framework as per the Ilulissat Declaration of 57

Norwegian Government, 2011, ‘The High North. Visions and Strategies’, White Paper No. 7, 2011–2012. Available at http://www.regjeringen.no/nb/dep/ ud/dok/regpubl/stmeld/2011-2012/meld-st-7-20112012-2/4.html?id=697747 (accessed on September 25, 2013). 58 The main sections on Norway’s Arctic policy are taken from Bekkevold & Offerdal, 2014.

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2008, in determining their border disputes and demarcation of their continental shelves. New Asian observers to the Arctic Council have agreed to the same principles. Initial skepticism from some Arctic littoral states towards new Asian stakeholders turned at the Arctic Council meeting in Kiruna in 2013. It is now generally believed that the Asian countries can contribute in a positive way to the research and development in the region. In addition to the Arctic Council as an important meeting place, most countries involved have established bilateral dialogues related to Arctic matters, both among the Arctic littoral states as well as between Arctic littoral states and new Asian stakeholders. Increased presence and activity in the Arctic region and the increasing value of the Arctic maritime economy may lead to the rise of non-traditional security challenges, like human assistance and disaster relief, and search and rescue operations. The Arctic countries recognize that human assistance and disaster relief, search and rescue and maritime domain awareness are insufficient to meet the expected increased human presence.59 Such non-traditional security threats however, often results in increased co-operation among the nations involved, as have been the case in large-scale human assistance and disaster relief operations in Asia in recent years. Most of the countries in concern have for many years already had a close cooperation between their Coast Guards, not only between Norway and Russia, but not least through the North Pacific Coast Guard Forum initiated by Japan in 2000 as a venue to foster multilateral cooperation on matters related to combined operations, exchange of information, illegal drug trafficking, maritime security, fisheries enforcement, illegal migration, and maritime domain awareness. The current membership of the North Pacific Coast 59

Zysk, 2012.

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Guard Forum includes agencies from Canada, China, Japan, Korea, Russia, and the United States.60 The biggest threat to stability in the Arctic is deterioration of the relationship between the three great powers the USA, Russia, and China with possible negative spillover effects on cooperation and stability also in the Arctic. The Ukrainian crisis of 2014 may have security implications for the Arctic, as other Arctic states have frozen most of their official military relations with Moscow, and a long term boycott and the absence of military dialogue could complicate conflict management in the Arctic. References Barnes, J., 2014, ‘Cold War Echoes Under the Arctic Ice: American Naval Exercise Using a Russian Submarine Takes on New Importance’, Wall Street Journal, March 25, 2014. Also available at http://online.wsj.com/news/articles/SB100 01424052702304679404579461630946609454 (accessed on June 14, 2014). Bekkevold, J.I. and Offerdal, K., 2014, ‘Norway’s High North Policy and New Asian Stakeholders’, Strategic Analysis, 38(6), pp. 825–840. Blank, S. and Kim, Y., 2013, ‘The Arctic and New Security Challenges in Asia’, Pacific Focus, XXVIII(3), December, pp. 319–342. Borgerson, S.G., 2009, ‘The Great Game Moves North. As the Arctic Melts, Countries Vie for Control’, Foreign Affairs. Also available at http://www. foreignaffairs.com/articles/64905/scott-g-borgerson/the-great-game-movesnorth, March 25, 2009 (accessed on April 9, 2014). Børresen, J., Gjeseth, G. and Tamnes, R., 2004, Norwegian Defence History, No. 5: 1970 2000, Bergen: Eide Forlag, in Norwegian. Chase, S., 2014, ‘Q&A with Harper: No Previous Government Has ‘Delivered More in the North’’, The Globe and Mail, January 17, 2014. Also available at http://www.theglobeandmail.com/news/national/the-north/ qa-with-harper-no-previous-government-has-delivered-more-in-the-north/ article16387286/?page=all (accessed on March 21, 2014).

60

Canadian Coast Guard, 2013, ‘North Pacific Coast Guard Forum’. Available at http://www.ccg-gcc.gc.ca/e0007869, (accessed on April 15, 2014).

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Claes, D.H. and Moe, A., 2014, ‘Arctic Petroleum Researches in a Regional and Global Perspective’, in Offerdal, K. and Tamnes, R. (eds.), Geopolitics and Security in the Arctic: Regional Dynamics in a Global World, London: Routledge. Clover, C., 2012, ‘Russia Detains 36 Chinese Fishermen’, Financial Times, July 18, 2012. Also available at http://www.ft.com/intl/cms/s/0/2012ee1ed08f-11e1-99a8-00144feabdc0.html#axzz34kB88cLH (accessed on June 15, 2014). Conley, H.A. et al., 2013, ‘The New Foreign Policy Frontier: US Interests and Actors in the Arctic’, (Washington, DC, Center for Strategic and International Studies), Center for Strategic and International Studies Europe Program Report, March 2013. Coyne, C.J. and Mathers, R.L. (eds.), 2011, The Handbook on the Political Economy of War, Cheltenham: Edward Elgar Publishers. Evera, S.V., 2001, Causes of War, Power and the Roots of Conflict, Ithaca: Cornell University Press. Gill, B., 2013, ‘From Peaceful Rise to Assertiveness? Explaining Changes in China’s Foreign and Security Policy under Hu Jintao’, (Stockholm, Stockholm International Peace Research Institute), SIPRI Working Paper. Also available at http://books.sipri.org/files/misc/SIPRI-Hu%20Gill.pdf (accessed on June 14, 2014). Holtsmark, S.G. and Smith-Windsor, B.A. (eds.), 2009, ‘Security Prospects in the High North: Geostrategic Thaw or Freeze?’, (Rome: NATO Defence College Research Division: 14), NDC Forum Paper 7. Holtsmark, S.G. and Tamnes, R., 2014, in Offerdal, K. and Tamnes, R. (eds.), Geopolitics and Security in the Arctic: Regional Dynamics in a Global World, London: Routledge. Ikenberry, G.J., 2000, After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order after Major Wars, Princeton: Princeton University Press. Jakobson, L., 2013(a), ‘Beijing’s Arctic Goals are not to be Feared’, Financial Times, May 19, 2013. Also available at http://www.ft.com/intl/cms/s/0/3dfd6f16bef1-11e2-87ff-00144feab7de.html#axzz34cAPuWd2 (accessed on June 14, 2014). Jakobson, L., 2013(b), ‘China Wants to be Heard on Arctic Issues’, Global Asia, (4), pp. 98–101. Jakobson, L. and Peng, J., 2012, ‘China’s Arctic Aspirations’, (Stockholm, Stockholm International Peace Research Institute), SIPRI Policy Paper No. 34. Also available at http://books.sipri.org/product_info?c_product_id=449 (accessed on July 21, 2014).

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Johnston, A.I., 2013, ‘How New and Assertive is China’s New Assertiveness?’, International Security, 37(4), pp. 7–48. Katakey, R. and Kennedy, W., 2013, ‘Russia Lets China Into Arctic Rush as Energy Giants Embrace’, Bloomberg, March 25, 2013. Also available at http://www. bloomberg.com/news/2013-03-25/russia-cuts-china-into-arctic-oil-rush-asenergy-giants-embrace.html (accessed on June 21, 2014). Lundestad, I. and Tunsjø, Ø. 2014, The United States and China in the Arctic, Polar Record. Also available at http://journals.cambridge.org/action/display Abstract?fromPage=online&aid=9265992&fileId=S0032247414000291 (accessed on June 13, 2014). Perlo-Freeman, S. and Solmirano, C., 2014, ‘Trends in World Military Expenditure, 2013’, (Stockholm, Stockholm International Peace Research Institute), SIPRI Fact Sheet, pp. 1–8. Also available at http://books.sipri.org/ product_info?c_product_id=476 (accessed on June 21, 2014). Riste, O., 2005, Norway’s Foreign Relations: A History, Oslo: Universitetsforlaget. Røseth, T., 2014, Russia s China Policy in the Arctic, Strategic Analysis, 38(6), pp. 841–859. Sennott, C., 2012, ‘The Arctic Circle: Earth’s Final Frontier?’, Global Post, March 27, 2012. Also available at http://www.globalpost.com/dispatches/ globalpost-blogs/groundtruth/arctic-circle-the-final-frontier (accessed on April 9, 2014). Skram, A.I. and Gade, J.G., 2013, ‘The Role of Coast Guards in Conflict Management: The Norwegian Experience’, paper presented at the International Order at Seaworkshop, Washington DC, May 8, 2013. Staalesen, A., 2013, ‘In Remotest Russian Arctic, a New Navy Base’, Barents Observer, September, 17, 2013. Available at http://barentsobserver.com/en/ security/2013/09/remotest-russian-arctic-new-navy-base-17-09 (accessed on April 14, 2014). Stensdal, I., 2013, ‘Asian Arctic Research 2005–2012: Harder, Better, Faster, Stronger’, (Lysaker, Fridtjof Nansen Institute), FNI report 3/13. Tamnes, R., 1991, The United States and the Cold War in the High North, Dartmouth: Aldershot. Tamnes, R. and Eriksen, K.E., 1999, ‘Norway and NATO During the Cold War’, in Prebensen, C. and Skarland, N. (eds.), NATO 50 Year: Norwegian Security Policy with NATO for 50 Years, Oslo: Den norske atlanterhavskomité. Also available at http://www.atlanterhavskomiteen.no/files/atlanterhavskomiteen. no/Tema/50aar/1a.htm (accessed on July 21, 2014), in Norwegian. Tan, A., 2014, The Arms Race in Asia: Trends, Causes and Implications, Oxon: Routledge.

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Vidal, J., 2013, ‘Chinese Fishing Fleet in African Waters Reports 9% of Catch to UN’, Guardian, April 3, 2013. Also available at http://www.theguardian. com/environment/2013/apr/03/chinese-fishing-fleet-african-catch (accessed on June 15, 2014). Yahuda, M., 2013, ‘China’s New Assertiveness in the South China Sea’, Journal of Contemporary China, 22(81), pp. 446–459. Zysk, K., 2009, ‘Russian National Security Strategy to 2020’. Available at http:// www.geopoliticsnorth.org/index.php?option=com_content&view=article& id=84&limitstart=2 (accessed on July 21, 2014). Zysk, K., 2012, Maritime Security: Interests and Rights in the Arctic , paper presented at the International Order at Seaworkshop, IDSA, New Delhi, May 21, 2012. Østreng, W. et al., 2013, Shipping in Arctic Waters: A Comparison of the Northeast, Northwest and Trans Polar Passages. Heidelberg: Springer-Verlag.

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Chapter 5

Analysis of International Arctic Cooperation Mechanisms among the Nordic Countries CHENG Baozhi

In recent years, the issue of strategic policies in the Arctic has become increasingly important in the national strategies of the five Nordic countries. In the year 2011 alone for example, on 28 March, the Icelandic parliament issued 12 guideline-principles for its government in the implementation of Arctic policies. On May 12, 2011, the very day that the Swedish government took its place as the rotating presiding country of the Arctic Council, it officially released the country’s first Arctic strategic document. Sweden was the last of all the eight Arctic countries to announce its Arctic strategies. On August 20, 2011, the central government of Denmark and the autonomous governments of the Danish territories Greenland and the Faroe Islands together issued the Kingdom of Denmark. Strategy for the Arctic 2011–2020. On November 18, 2011, the Norwegian government also issued the white paper The High North — Visions and Strategies which was the third Arctic strategy report officially released by the government since the beginning of the new century. A year earlier, in August 2010, the government of Finland also released for the first time its Arctic strategy, and in October 2013, it made significant updates and amendments to the strategic paper. It is remarkable that the five Nordic countries have issued such a large 83

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number of strategic papers so frequently and in such a short timespan. This also reflects the importance of Arctic affairs in today’s international politics and relations arena. Upon further investigation, one will discover that the Arctic strategy and policy documents released by the Nordic countries are quite similar in form and content, and reflect strong commonalities. Firstly, all five Nordic countries highlight their identity as Arctic countries in their strategic papers, in attempts to take the leading role in Arctic affairs. Secondly, the emphasis of the five Nordic countries’ sovereignty and national interests is a priority in all the Arctic strategies. Thirdly, much attention is paid to the central role of the Arctic Council in Arctic governance mechanisms, and its authority in regional governance is strengthened. Fourthly, there is an emphasis on sustainable development in the Arctic region. This includes the responsible development and rational use of resources in the Arctic, the construction and development of infrastructure in the Arctic region, the development and expansion of Arctic waterways and aviation networks, adaptation to climate change, and other issues. Lastly, active participation in international collaboration is emphasized. Dedication to global, regional and bilateral cooperation, support for various regional and sub-regional international organizations and other international movements playing a greater role in Arctic governance is also mentioned. As for bilateral cooperation, focus on collaborating with other Arctic countries, especially Russia is emphasized. Maintaining a relatively open attitude towards the participation of non-Arctic countries in Arctic governance is also mentioned. The Nordic countries show clear similarities in their political stances on Arctic issues. This is closely linked to the fact that the five countries have formed clear and shared coordination and cooperation channels. In addition to the Arctic Council, the Nordic Council of Ministers and the Barents Euro-Arctic Council, the five

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also hold meetings for military and security cooperation in the Arctic Ocean together. In addition, at North Atlantic Treaty Organization (NATO), with the leading USA and the European Union (EU), the Nordic countries are using the forum to springboard active involvement in Arctic affairs. The great attention that these strong political and military organizations pay to the region’s affairs undoubtedly influences various aspects of the five Nordic countries’ Arctic policies. The Nordic countries’ Arctic cooperation mechanisms of the on non-traditional security issues In the Arctic Council, the Nordic Council of Ministers, the Barents Euro-Arctic Council and the EU, the Nordic countries have achieved a relatively effective collaboration with the Northern Dimension Policy, the Arctic policy framework and other regional arrangements. See Table 1. The Arctic Council The Arctic Council is currently the most important governance structure for Arctic affairs. The Nordic countries are members and play a major role in the council’s successful functioning and the development of its mechanisms. At the same time, the five countries coordinate their Arctic policy stances through the council’s working groups, the Senior Officials’ Meetings and other platforms, setting the agenda and tone for the bi-annual Ministerial Conferences. First of all, Finland made great contributions to the establishment of the Arctic region’s environmental and sustainable development cooperation mechanism. On September 20, 1989, according to the Finnish government’s proposal, the eight Arctic countries sent representatives and held the first session of the Arctic Environmental Protection Consultative Meeting to discuss international cooperation for Arctic environmental protection. On June 14, 1991, the eight

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Table 1. Coordination mechanism

Nordic countries’ Arctic Policies’ regional coordination mechanisms.

Arctic Council

Canada, Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, Russia, Sweden, and the USA. Permanent observers: China, EU, France, Germany, India, Italy, Japan, the Netherlands, Poland, Singapore, South Korea, Spain, United Kingdom as well as nine intergovernmental and interparliamentary organizations, 11 non-governmental organisations and 6 indigeneous people’s organisation as Permanent Participants

Promote cooperation, coordination and interaction on sustainable development and environmental protection among Arctic states with the participation of Arctic indigenous groups

Nordic Council of Ministers’ Arctic Cooperation Project (2009–2011)

The five Nordic countries, Aland Islands (Finland), Faroe Islands (Denmark), Greenland (Denmark)

Raise awareness about climate change, improve the Arctic residents’ quality of life and their social and cultural development level, protect the Arctic’s natural ecology

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Overall purpose

B. Cheng

Members

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Promote social and economic development in the Barents region, enhance the region’s competitiveness, promote integration, good governance, and sustainable development

EU’s Northern Dimension Policy

EU, Iceland, Norway, Russia

Provide a common framework to promote dialogue and specific cooperation projects, promote stability and well-being, strengthen economic cooperation, and enhance economic integration

The EU’s Arctic policy, still gradually taking shape

EU

Strengthening the multilateral-governance mechanisms, such as UNCLOS

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Denmark, EU, Finland, Iceland, Norway, Russia, Sweden

Analysis of International Arctic Cooperation Mechanisms

Barents Euro-Arctic Council

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countries signed the Declaration on the Environmental Protection Strategy in Rovaniemi, Finland. The Finnish government played an active role in the process. The declaration signed in Rovaniemi led to a series of operations for the protection of the Arctic environment — the Arctic Environmental Protection Strategy. On September 16, 1996, the eight Arctic countries met in Ottawa, Canada and announced the establishment of the Arctic Council. The various activities of the Arctic Environmental Protection Strategy were subsequently included as part of its responsibilities.1 Secondly, a positive outcome of the end of the Cold War was that the Arctic Council was able to achieve to a certain extent, substantive cooperation in the region among the Nordic countries, the USA, Canada, and Russia.2 To fulfil the objectives of Arctic environmental protection and sustainable development, the Council established six working groups to carry out work related to environmental protection and sustainable development in the Arctic. These are the Arctic Monitoring and Assessment Programme (AMAP), the Conservation of Arctic Flora and Fauna (CAFF), the Protection of the Arctic Marine Environment (PAME), the Emergency Prevention, Preparedness and Response working group (EPPR), the Sustainable Development working group (SDWG), and the Arctic Contaminants Action Program (ACAP). Specific areas of work include climate change, marine environmental protection, energy development, pollution control, biodiversity conservation, air and sea search and rescue cooperation, and various other issues. As can be seen, the specific projects and works undertaken by the Arctic Council are very well aligned with the Arctic strategic objectives and priority issues of the Nordic countries, with the main focus being non-traditional security issues. This is not a coincidence,

1 2

Koivurova & VanderZwaag, 2007. See Cheng, 2011.

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but due to the inseparable nature of the communication and coordination of policy stances between these countries. Finally, the invaluable contribution of the Nordic countries in enhancing the Arctic Council’s central role in Arctic governance and, the institutionalization of the council cannot be denied. Objectively speaking, the Arctic Council and the Arctic Environmental Protection Strategy have played immense roles in environmental protection in the Arctic, and in improving the international community’s awareness of environmental and sustainable development issues. However, the nature of the Arctic Council as a policy forum and its function of setting non-binding ‘soft laws’ limits the council in taking on a greater role in Arctic governance. Moreover, unlike other agreements the council did not set up a secretariat, and the host country rotates every two years. A secretariat was not established before 2007 when Norway, then serving as the host country reached an agreement with Denmark and Sweden for the three Scandinavian countries to share a secretariat while they served as host countries from 2006 to 2012. The secretariat was located in Tromsø, Norway. This model eventually received the support from all the eight countries and it was decided that a permanent secretariat be set up before Canada took its turn as the rotating host country in 2013. The secretariat was formed with 10 members and one Secretary-General and it is mainly in charge of administrative affairs, information exchange, document translation, financial operations, and staffing assignments. In November 2012, the Secretary-General of the Iceland Ministry of Environment, Magnus Johannesson, was appointed as the first leader of the Arctic Council Secretariat. The Arctic Council Secretariat was formally established in the city of Tromsø in northern Norway in May 2013. It is the secretariat’s responsibility to strengthen the Arctic Council’s work as well as communication and coordination of Arctic affairs.

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The Nordic Council of Ministers The Nordic Council of Ministers was founded in 1971 and is a cooperative forum established by the governments of the five Nordic countries. The member states’ Prime Ministers decided the Council’s scope of responsibilities. In practice the Ministers for Nordic cooperation, and not the respective Prime Ministers are responsible for the cooperation, and the Nordic Committee for cooperation handles the daily affairs of the official Nordic political cooperation. If one looks past the name of the council, the Nordic Council of Ministers is actually made up of several individual ministerial councils. Most of the Nordic ministers in the specific policy areas meet several times a year in their councils. The term of office of the Chairperson of the Council of Ministers is one year, and the five Nordic countries take turns to chair the council. Consensus is required before any resolution adopted by the council is implemented. Before the Cold War ended, the Nordic Council of Ministers avoided discussing security and defense issues publicly at the meetings, and rather chose to discuss cooperation in other areas such as social and welfare policies. With the end of the Cold War and the reinstatement of organizational functions, the Nordic Council of Ministers adopted a greater global perspective. At the close of the Cold War, the Baltic States were the focus of the council’s work but in recent years, the Arctic region is gradually gaining equal importance and has become one of the main work areas of the council. The Arctic Co-operation Programme was established in 1996 to promote collective actions in the northern region. The main goal of this 1996 Arctic Co-operation Programme was to improve the Arctic indigenous peoples’ quality of life, economic and infrastructural conditions by promoting sustainable development at all levels and advocate collective arrangements among the Arctic states. Since 2003, the Arctic Co-operation Programme has been independently set apart from other parallel policies so as to boost the level of commitment of the Nordic

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countries towards Arctic regional peace and sustainable development. With the 1996 program as a basis, the council successively launched three Arctic Co-operation Programmes in 2003, 2006, and 2009. The budget for the program increased from EUR 120,000 in 1996 to nearly EUR 1,000,000 in 2009. From 2009 to 2011, the objectives of Arctic cooperation projects were to raise awareness of climate change in the Arctic, to improve the quality of life for Arctic residents in terms of their social and cultural development, to protect the natural ecology of the Arctic, and to promote the sustainable use of natural resources in the Arctic. The Nordic Council of Ministers has also made use of Arctic cooperation projects to tighten collaboration between the Arctic Council and EU member states in the Barents Euro-Arctic Council.3 A part of the Arctic Co-operation Programme is also complementary to the Nordic Council of Ministers’ Russian project, covering the same geographical area. The Nordic Council of Ministers has also set up a committee of Arctic experts, the Arctic Expert Committee, as consultants and advisors for the refinement, implementation and follow-up of Arctic projects. The Nordic countries have not only made a commitment to hold a common stance on Arctic affairs at the Council of Ministers and in the Parliaments, they have also taken concerted actions at the ministerial level and moved towards having a common Arctic strategy. In June 2009, the Foreign Ministers of the Nordic countries issued a joint statement claiming that individually, the Nordic countries would be limited in their ability to resolve the increasing practical issues in the Arctic of environmental protection, climate 3

The Nordic Council of Ministers provides funding for both the Arctic Council’s and the Barents Euro-Arctic Council’s projects. These projects follow the objectives and purposes of the cooperation projects set up by the Nordic Council of Ministers. The funds amount to approximately EUR 1.2 million a year. The funds have an important impact, especially on the work of the Arctic Council.

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change, and safety and rescue. Therefore, the Ministers unanimously decided to increase cooperation with other relevant international bodies in order to enhance the follow-up of issues addressed by the Arctic Council. As can be seen, the Nordic Council of Ministers has become the Nordic countries’ main mechanism for coordinating Arctic strategies and policies. They are trying to make the cooperation mechanism between the Nordic countries the platform for advancing cooperation of Arctic affairs. Finally, it is worth noting that the Nordic Council of Ministers is a permanent observer of the Arctic Council. From another angle, this reflects the effort of the two bodies in connecting their regional policy within the wider circumpolar Arctic framework, in order to form a consensus among regional institutions and avoid overlapping policies. The Barents Euro-Arctic Council Located to the north of Norway and Russia in the Barents Sea, lies one of the world’s most important marine fishery bases. The sea here is rich in oil resources and holds great economic and strategic value. The Barents Sea is Russia’s northern strategic powerhouse. Murmansk Harbour, the base camp of Russia’s Northern Fleet, is located on the northern Kola Peninsula. During the Cold War, the submarines of the former Soviet Union, the USA, and the other NATO countries often patrolled these waters. To date, this has not changed. In January 1993, in order to improve the longstanding confrontation between the East and the West in the Barents Sea after the Cold War, and to improve mutual understanding and cooperation, the Barents Euro-Arctic Council was established in Kirkenes, Norway, on the initiative of thenNorwegian Foreign Minister Thorvald Stoltenberg. The members of the council include the five Nordic countries, the EU and Russia, while Canada, France, Germany, Italy, Japan, the Netherlands, Poland, UK, and USA collaborate as observers. The council’s

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purpose is to boost economic, environmental, technological, as well as cultural and tourism cooperation in the Barents Sea region.4 In fact its fundamental purpose was, under the circumstances at that time, with the disintegration of the former Soviet Union and Russia as the successor in its place, to promote stability in the Barents region while supporting Russia’s reform process. The focus of the six working groups of the Barents Euro-Arctic Council is related to non-traditional security issues such as environmental protection, tourism and transport. In January 2003, the heads of government of the five Nordic countries and Russia met in Kirkenes to celebrate the 10th anniversary of the establishment of the Barents Euro-Arctic Council. The six heads of state discussed ways to strengthen cooperation among the countries in the Barents Sea, and reached a principle agreement in order to help Russia properly handle the issue of nuclear safety in the Kola Peninsula. According to the agreement, the Nordic countries agreed to together set up an assistance fund to help Russia improve security-controls and management of nuclear facilities. Russia also committed to exempt the import of foreign products, equipment and technology for handling of radioactive substances from tax. Then-Swedish Prime Minister Göran Persson expressed that the agreement was a major breakthrough because the Nordic countries ‘had long been looking forward to contribute to the elimination of nuclear contamination risks on the Kola Peninsula’.5 In addition, the council also decided 4

BEAC, 1993, Declaration on Cooperation in the Barents Euro-Arctic Region, Conference of Foreign Ministers in Kirkenes. Available at http://www.barentsinfo.fi/beac/docs/459_doc_KirkenesDeclaration.pdf (accessed on September 16, 2014). 5 For a long time, the main concern of the Nordic countries and the EU with regards to the Barents regional cooperation was the nuclear safety issue around the Russian Kola Peninsula. During the Cold War, the former Soviet Union set up a large number of military and civilian nuclear facilities on the Kola Peninsula and there were more than 150 nuclear submarines of the Russian Northern Fleet

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at the meeting, to enhance the region’s transportation structure and facilitate travelling, develop cooperation between customs, borders, immigration and other departments, so as to speed up cross-border traffic and to, combat illegal immigration, smuggling and other transnational criminal activities. In December 2008, Russia signed an intergovernmental cooperation agreement with Finland, Norway, and Sweden in Moscow for collaboration in conducting early warning, disaster, and emergency efforts in the Barents Sea and the European Arctic area. This agreement also covered intensifying cooperation in border areas, implementing joint exercises, improving collaboration-efficiency and handling of emergency situations. For an effective implementation of the agreement, the four countries agreed to send representatives and set up a joint committee. The committee would meet annually or convene in times of need, to plan and coordinate cooperation as well as evaluate the implementation of the agreement. The agreement provides a common legal basis for future cooperation between the parties.6 The international Barents-region cooperation resulted in the creation of a unique two-layer structural model. At the same time that the Barents Euro-Arctic Council was set up, an interregional cooperative mechanism was also formed as the Barents Regional Council. The regional council now includes subnational regional entities from 13 member counties or equivalents of the at the Murmansk base. After the fall of the Soviet Union, many of these were abandoned and left to rust, and because Russia was unable to make proper arrangements for this nuclear waste, the coastal states and regions would be endangered in the case of a nuclear leak. A Norwegian environmental agency assessed that there are about 21,000 containers filled with nuclear waste stored near the Kola Peninsula and many have begun to leak. In August 2008, the Russian nuclear submarine Kursk sunk in these waters, and this incident caused great alarm to the international community, raising concern about the danger of nuclear leakage from the submarine. Liu, 2003. 6 Zhang, 2008.

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member states, and is a type of interregional cooperative forum. In addition, the representatives from the region’s three indigenous groups, the Sami, Nenets, and Vepsians have jointly formed a working group offering advice and suggestions to the both the Barents EuroArctic Council and the Barents Regional Council. However, as some of the indigenous communities began doubting their influence on the cooperation process, they chose to become silent observers, and thereby greatly restricted the coverage of this cooperative mechanism. Currently, the cooperation in the Barents region faces several difficulties. One challenge is to improve the living-conditions of the indigenous people while preserving their culture. The urbanizationand industrialization-developments pose a growing threat to the cultural traditions and lifestyles of the indigenous people. The Barents Regional Council is presently taking measures to protect their traditions. For example, radio stations are broadcasting Sami language programs, more books have been translated and published in the Sami language and, several Sami cultural centers have been established. The EU’s Northern Policy and Arctic Policy framework Before its fourth expansion in 1995, the EU rarely got involved in Arctic affairs as it did not directly share borders with the Arctic. Although Denmark, who is part of the EU, has sovereignty over Greenland in the Arctic, Greenland withdrew from the European Community in 1985. After its expansion in 1995, the EU began to intervene in Arctic affairs because after Finland and Sweden joined, the EU’s ties to the Arctic grew closer. As such, it became inevitable for the EU to establish with Arctic countries, especially Norway. After the EU expanded to include Finland and thereby shared borders with Russia, it needed to strengthen its collaboration with the Arctic country Russia. In 1997, Finland came up with the Northern Dimension initiative with the goal of ‘providing a common framework to facilitate Nordic

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dialogue, consolidating cooperation and enhancing stability, prosperity and development’.7 In 1999 the initiative was approved by the European Council and this became the EU’s Northern Dimension Policy. The EU, Iceland, Norway, and Russia are the member participants of this policy, with Canada and the USA serving as observers. Other stakeholders are the Arctic Council, the Barents Euro-Arctic Council, the Nordic Council of Ministers,8 the Council of Baltic Sea States and so on. The policy covers the areas from Greenland and Iceland in the west to the north-western part of Russia in the east, and extends from the Arctic region on the north southwards to the southern coast of the Baltic Sea. There are a total of four partnerships within the Northern Dimension policy-framework. The Northern Dimension Environmental Partnership’s nuclear safety project is an example of cooperation in the Arctic region. The total amount of funding this project towards radioactive waste management and spent fuel storage in the Kola Peninsula and Arkhangelsk region has accumulated to approximately EUR 160 million. The Northern Dimension Partnership in Public Health and Social Well-being was designed to improve and promote the health and welfare of Arctic indigenous peoples. Indigenous peoples from the Barents region Canada and Greenland are already participating in relevant medicalexpertise activities. Through the Northern Dimension Partnership on Culture project, artists, especially indigenous artists, can seek collaborative channels with other performers, publishers, and sponsors. The Northern Dimension Partnership on Transportation and Logistics was started with the purpose of improving transportation and logistics in the areas covered by the Northern Dimension Policy and promoting local economic development. 7

EU, 2014, ‘Northern Dimension’. Available at http://eeas.europa.eu/north_dim/ index_en.htm (accessed on September 16, 2014). 8 Within the Northern Dimension framework, the Northern Dimension partner countries, the Arctic Council and the Barents Euro-Arctic Council hold several coordination meetings. Such partnership can become even more frequent and institutionalized in the future.

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Specific collaboration projects include basic infrastructural projects and cross-border cooperation and cooperatives for transportation security. The collaboration within the Northern Dimension is strongly pragmatic; the main problems handled are ‘soft security’ issues. When the Nordic countries serve their terms as rotating presidents or hosts, they make efforts to expand the influence of the Arctic, but the Arctic is not a core-interest of EU policies. In 2006, the EU, Iceland, Norway, and Russia updated the Northern Dimension Policy. In the updated policy, the Arctic and sub-Arctic regions, including the Barents region, as well as the Barents Sea and Kaliningrad were defined as priority areas. In November 2008, the European Commission issued its first Arctic policy report, emphasizing that the European Commission was very closely linked to the Arctic and that this relationship was important, historically, geographically, economically and scientifically.9 The EU-member states Denmark, Finland, and Sweden have sovereignty rights to territories within the Arctic Circle, and serve as important points of entry for the EU into Arctic affairs. Although Iceland and Norway have not joined the EU, they are members of the European Economic Area, and collaborate according to this agreement with the EU on areas such as environmental protection, science, tourism, and civil protection. Canada, Russia, and the USA are strategic partners of the EU, and they maintain dialogues and collaborative relations on security matters. For this reason, the EU believes that it is necessary and that it has an obligation to actively participate in Arctic affairs through different channels. The EU has advocated the need to promote the development of an Arctic multilateral governance system under the United Nations Convention on the Law of the Sea (UNCLOS), so as to ensure the security and stability of the region, environmental protection and sustainable use of resources. The Resolution on 9

EU, 2014, ‘EU Arctic Policy’. Available at http://eeas.europa.eu/arctic_region/ index_en.htm (accessed on September 16, 2014).

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Arctic Affairs was passed by the EU Council of Foreign Ministers in December 2009 and the resolution ‘Sustainable European Northern Policy’ was passed by the European Parliament in January 2011. They are both elaborations and developments made to the European Commission’s policy document. On July 3, 2012, the European Commission officially issued its latest strategic document Development of EU Arctic Policy: Progress since 2008 and Future Course of Action. In the document, the EU Commission emphasized the need for the EU to invest more in research and knowledge about the Arctic, to contribute to the responsible and sustainable development of the Arctic and step up efforts in holding regular dialogues and consultations with theArctic indigenous communities.10 However, the EU’s economic recovery is currently weak and some member states are deviating from recovery. Thus, the implementationeffects of the EU Arctic Policy remain to be seen. On the whole, EU’s northern extension strategy, i.e. the Northern Dimension, its Arctic policies, supported by the Nordic countries, draws Russia further into the integration-process of Europe, through the Barents cooperation and the Nordic Council of Ministers’ Russia-project. This reduces tension in the Arctic region and promotes regional peace and stability, in line with the vital interests of the Nordic countries. The integration efforts of the Nordic countries towards traditional security issues in the Arctic The Nordic countries have carried out fruitful cooperation on nonmilitary security issues through the aforementioned cooperation mechanisms, on which it relatively easy to find common ground. This comes from the special features of the current Arctic regional governance mechanisms on non-traditional security. Regional 10

For a detailed analysis on the EU’s Arctic Policy, see Cheng, 2013.

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mechanisms such as the Arctic Council are not mandated to discuss military security issues. As for military security, the Nordic countries have historically pursued neutral and self-preserving foreign policies. The Nordic countries’ desire to continue with their neutral foreign policies was affected by the US-instigated Cold War on the Soviet Union, after World War II. Under pressure from the USA, the Nordic countries gradually differentiated their security policies. Denmark, Iceland, and Norway subsequently joined NATO. Finland was heavily influenced by the Soviet Union. Only Sweden, due to its geographical location and relatively strong economy continued with its traditional neutral-arms policy. With Sweden as the central axis, a delicate situation, the so-called ‘Nordic balance’, was formed in the Nordic region.11 This security-mode became the Nordic region’s basic framework for the settling security issues during the Cold War, and it continued on until the late 1980s. NATO-involvement in Arctic affairs Since the end of the Cold War, NATO has been actively involved in global security affairs, and its concern for the Arctic region is no exception. At the Bucharest summit in 2008, the NATO-member states arrived at a consensus on how to improve NATO’s capacity and role in maintaining energy security. Five items were agreed upon: combining information and intelligence, working on transportationsafety, improving international and regional cooperation, working on crisis management, and protection of critical facilities. At the same time, while every country was accelerating arms-mobilization in the competition for more resources, they would commit to abide by the resolution made at the summit and implement measures related to

11

‘Nordic balance’ is a term used commonly in discussing Nordic international relations during the Cold War; it was first coined by Arne Olav Brundtland in 1966. ‘Nordic balance’ became the basic framework of Nordic security during the Cold War. Hu, 2000.

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the five areas mentioned above. On January 28, 2009, then-NATO Secretary-General Jaap de Hoop Scheffer delivered a keynote speech on ‘Security Prospects in the High North’ at a seminar held in Reykjavik, Iceland where he elaborated on NATO’s security-role and the challenges its Arctic policy might face. On the whole, NATO mainly fulfils three safety functions in the Arctic region, namely ensuring navigation safety, peaceful settlement of disputes, and preventing regional military conflicts.12 Since 2008, NATO and the Nordic countries have conducted military exercises in the Arctic Ocean, from the 2008 Loyal Arrow-exercise NATO held in Sweden, the 2010-Operation Nanook held jointly by Denmark and the USA in Canada, to the ‘Baltic Sea Action’-exercise NATO conducted in Estonia and Latvia in the same year. However, there is some degree of uncertainty to the role NATO plays in the Arctic. Five of the eight Arctic countries are members of NATO; Finland, Russia, and Sweden are not. In the process of strengthening military security, law enforcement, and counterterrorism cooperation to ease tensions and build trust in the Arctic, NATO cannot play a too great role. Russia has strongly opposed NATO’s involvement in Arctic affairs. Then-Russian President Dmitry Medvedev expressed serious concern over NATO’s active participation in the Arctic, believing that military factors should not be mixed with Arctic cooperation. At a joint press conference held with then-Norwegian Prime Minister Jens Stoltenberg, Medvedev stated ‘We do not need NATO to 12

NATO has taken some measures in recent years, such as strengthening security cooperation in the Arctic with Canada, Denmark, Iceland, Norway and other countries. The Secretary General of NATO also remarked that in facing global warming, NATO may station troops in the Arctic to prevent competition among major powers for land and resources in the Arctic. NATO, ‘Speech by NATO Secretary General Jaap de Hoop Scheffer on security prospects in the High North, Reykjavik, Iceland, January 29, 2009’. Available at http://www.nato.int/docu/ speech/2009/s090129a.html (accessed on February 1, 2014).

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participate in Arctic affairs because this is part of our shared resources and wealth’.13 He emphasized the prospects of Arctic cooperation ‘must not, under any circumstances, be associated with NATO’s intentions to expand its influence in the Arctic’.14 Due to Russia’s strong opposition, NATO’s involvement in Arctic affairs can only be low-key, and concentrated on less sensitive areas of cooperation such as emergency and disaster warnings and rescue, anti-piracy and -crime, intelligence sharing, and so on. The attempt to integrate Nordic security and defense To meet the challenges in maintaining security in the Arctic the Nordic countries are also trying to find new ways of cooperation, but there are rather grave differences in the countries’ national stands. On February 9, 2009, the five Nordic foreign ministers met in Oslo, Norway to discuss deepening challenges of diplomatic and security cooperation in the Nordic region in light of new circumstances. The meeting mainly discussed the ‘Nordic Foreign and Security Policy Cooperation’-report presented by then-Norwegian Foreign Minister Jens Stoltenberg. The report stated that because of climatic warming leading to environmental change, the countries’ common geographical environment, the high cost of high-tech weaponry and other similar factors, the five Nordic countries need to strengthen and deepen diplomatic and security cooperation with each other.15 The report further proposed that the five Nordic countries improve cooperation in the North Sea and Arctic regions and establish several mechanisms. The creation of a Nordic mari13

People’s Daily, 2011, ‘Russia Warns NATO Against Going Near the North Pole’. Available at http://world.people.com.cn/GB/15716599.html (accessed on February 19, 2014), in Chinese. 14 Ibid. 15 Sing Tao Global Network, 2009, ‘Mixed Reactions from Nordic Foreign Ministers with Regards to Deepening Cooperation?’. Available at http://www. stnn.cc/hot_news/gd_20090210/200902/t20090210_976336.html (accessed on February 1, 2014), in Chinese.

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time-monitoring system to oversee all sea- and land-based activities in the region, the creation of a Nordic marine response taskforce, the creation of a Rescue Coordination Centre and amphibioussquads and rescue-resources suitable for Arctic conditions, the completion of an early-warning and communications satellite system by 2020, and the development of other cooperative issues relevant to the Arctic were all put forward in the report. In March 2010, the five foreign ministers held another meeting in Copenhagen, Denmark and focused discussion on the joint supervision of the Nordic seas, airspace and Arctic issues. In April 2011, the five Nordic countries issued a joint statement to strengthen collaboration and joint actions in disaster response during peacetime, as well as in facing military threats. Just as commented in Russian media, it is hard to conceal the presence of the United States and NATO behind the five Nordic countries’ defense and military collaboration. Earlier on in 2009, the USA had already expressed that they ‘have extensive, fundamental national security interests in the Arctic, and are preparing to defend those interests, whether alone or in cooperation with other countries’.16 Furthermore, they actively seek to win over the Nordic and Baltic countries through NATO, and make them oppose Russia. The USA has even pulled neutral Finland and Sweden into the picture; both countries are indicating interest in joining NATO. This may lead to significant changes in Europe’s political map, and make it seem that Russia stands alone in the ‘battle of the Arctic’.17 Russia remains on guard to this development. 16

White House, 2009, ‘National Security/Homeland Security Presidential Directive on Arctic Region Policy’. Available at http://georgewbush-whitehouse. archives.gov/news/releases/2009/01/20090112-3.html (accessed on February 15, 2014). 17 Eastday.com, 2011, ‘Russia Displeased with England’s Appeal for Northern Europe to Form a Military Alliance Among the Northern Countries’. Available at http://mil.eastday.com/m/20110227/u1a5747441.html (accessed on January 12, 2014), in Chinese.

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In April 2010, Russia made some concessions and accepted Norway’s principle of the median line. They agreed to divide the 175,000 square kilometers of disputed waters in the Barents Sea into two substantially equal parts, and thereby ended the Barents Sea demarcation dispute between the two countries. On one hand, this reflects Russia is giving tit for tat, but on the other hand it also indicates that in the new Arctic political struggle, Norway seized the opportunity and came out on top. However, it is currently still too early to determine the effects of the agreement. Thus, it can be seen that in the traditional military-security field, there is a bleak prospect for the Nordic countries to attempt forming mini-version of NATO. Nevertheless, in the future the five countries still have room for cooperating on low-sensitivity security issues like maritime search and rescue, and joint law enforcement. Concluding remarks: Lessons for Asian newcomers Simply put, the Nordic countries have achieved relatively effective cooperation in non-traditional security policies, the Northern Dimension Policy, Arctic policy framework and other regional arrangements covering areas extended to the north, through the Arctic Council, the Nordic Council of Ministers, the Barents EuroArctic Council, and the EU. In the area of traditional security policies the prospects are bleaker, due to Russia’s alarm and opposition towards NATO’s intervention in Arctic affairs and the integration of Nordic defense. This is closely related to the current non-traditional security features of the Arctic governance mechanisms.18 As newcomers to the Arctic political arena, when China, India, Japan, South Korea, Singapore, and other Asian countries participate in Arctic affairs, they should draw as much as possible from the approach of the Nordic countries have taken in establishing multiple mechanisms of international cooperation, and actively develop new 18

Wang, 2011.

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platforms for conducting collaborations in the Arctic policy arena. For example, they could look into including issues of Arctic cooperation in the ASEAN+319 mechanism. Given that the mutual political and military strategic trust among the East Asian countries needs to be improved, relevant cooperation could be undertaken beginning with areas such as scientific research, training of search and rescue capabilities, early-warning and emergency response, construction of basic infrastructure, and so on. Steady progress can be made subsequently extending from these. At the same time, they ought to pay attention to non-governmental cooperation mechanisms as well as two-track diplomacy. For example, the North Pacific Arctic Conference serves as an effective bridge for communication and collaboration of policies between Asian countries and Arctic experts and scholars. References Cheng, B., 2011, ‘The Construction and Completion of Arctic Governance Mechanisms: Laws and Policies’, International Review, 4, in Chinese. Cheng, B., 2013, ‘The EU’s Arctic Policy and the Possibility of its Cooperation with China’, Peace and Development, (20), 3, in Chinese. Hu, D., 2000, ‘Adjustments in the Early Post-War Nordic National Security Policies — On the Formation of the Nordic Balance’, Europe, (18), 2, in Chinese. Koivurova, T. and VanderZwaag, D., 2007, ‘The Arctic Council at 10 Years: Retrospect and Prospects’, University of British Columbia Law Review, 40(1), pp. 121–194. Liu, Z., 2003, ‘The Uneven Path to Cooperation in the Barents Sea’, People’s Daily, January 21, 2003. Also available at http://www.people.com.cn/GB/ guoji/24/20030121/911597.html (accessed on February 1, 2014), in Chinese. Wang, C., 2011, ‘Discussion on the Non-Traditional Security Features of the Regional and International Arctic Regime — Using the Arctic Council as Example’, Ocean University of China Newsletter (Social Sciences Edition), 3, in Chinese. Zhang, H., 2008, ‘Russia and the Nordic Countries Sign the Arctic Cooperation Agreement’, December 14, 2008, Science and Technology Daily, in Chinese. 19

The 10 ASEAN-countries with China, Japan, and South Korea.

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Part 2

Economic Development

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May 2, 2013

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BC: 8831 - Probability and Statistical Theory

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PST˙ws

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Chapter 6

International Use of the Northern Sea Route — Trends and Prospects1 Arild Moe

Over the last few years considerable interest has been shown in the potential for Trans-Arctic shipments via the Northern Sea Route (NSR) (see Figure 1). The purpose of this chapter is to review actual international use of the sea route and discuss if there are trends that can tell us something on further developments. International use of the NSR for Trans-Arctic voyages was for a long time held back by exorbitant transit — or icebreaker escortfees. There were hardly any transits on the NSR. However, starting 2009 Russian authorities gave Atomflot — the icebreaker fleet — permission to offer discounts to attract customers, and in late August 2009 the German company Beluga Shipping sent two cargo ships from South Korea via the Bering Strait westwards on the NSR to the Ob Bay where they delivered 44 heavy lift modules destined for a power plant. A second, full transit journey — and the first with a foreign carrier taking cargo between non-Russian ports — was organized by the Norwegian logistics company Tschudi, in September 2010. A bulk carrier took 41,000 tons of iron ore from 1

The chapter contains sections from, but also expands on, elements from the authors’ article, Moe, 2014. 107

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b2036_Ch-06.indd 108 Formal boundary of NSR Area Outer limit of Russian 200 nm exclusive economic zone Outer limit of Russian 12 nm territorial waters Marine delimitation lines Selected NSR route alternatives

Figure 1.

Map of the Northern Sea Route.

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THE NORTHERN SEA ROUTE (NSR)

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Number of transits

1.4 1.2 1 0.8 0.6 0.4 0.2 0

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2013

Figure 2. NSR transit traffic 2010–2013, in million tons of cargo and in numbers.2

the Norwegian port Kirkenes close to the border with Russia to a Chinese port.3 These journeys heralded a new era in the international use of the NSR and in the following years transits have increased drastically — in relative terms. From four transits in 2010 traffic increased to 71 in 2013.4 Cargo volumes also grew from 2010 to 2012, but fell slightly in 2013 (see Figure 2). It is, however, essential to understand what the numbers actually show. ‘Transits’ as understood by the Russian authorities who report the numbers, include all sailings that traverse the most challenging part of the NSR, along the coast of East Siberia. Thus, voyages from the Ob Bay and eastwards are included, and so are journeys from the west to Pevek in the Far East, even if they do not sail the full length of the NSR. 2

All the charts presented in this chapter are based on numbers from the Northern Sea Route Information Office. Available at http://www.arctic-lio.com/ unless otherwise noted. 3 Tschudi, 2010, ‘Historic Sea Route Opens Through the Arctic to China’. Available at http://www.tschudiarctic.com/page/206/Northern_Sea_Route (accessed on March 26, 2014). 4 The numbers quoted here and in the chapter are taken from or calculated on the basis of information from the Northern Sea Route Information Office, unless otherwise noted.

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A. Moe 50 45 40 35 30 25

Within Russia

20

International

15 10 5 0 2011

2012

2013

Figure 3. NSR transit voyages 2011–2013, within Russia or international transits.

Origin and or destination may well be Russian ports. Thus, transit is not the same as international transit, whereas oftentimes in the foreign press the terms are mixed. For the purpose of representing actual activity on the NSR the term as used by Russia makes sense, but as an indicator of commercial interest it says little. Most of the sailings are actually between Russian ports. In 2011, 41 transits were reported, of them 16 involved a foreign port, the rest was between Russian ports. Whereas a total of 46 transits were reported for 2012, 27 were journeys between foreign ports or between a foreign port and a Russian port. In 2013, 71 transits were reported, but only 28 journeys had destinations or departures outside Russia, (see Figure 3). The journeys with both departure and destination in Russia are dominated by ships supplying settlements along the coast with the government’s Severny Zavoz ‘Northern deliveries’ program, and the voyages can hardly be termed commercial in a normal sense. This kind of traffic has taken place most years

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after the Second World War. At its highest point, in 1992, 22 vessels transported some 226,000 tons of cargo.5 The number of vessels for subsequent years is unavailable, but the supply system broke down and traffic fell drastically in the 1990s, in 1998 deliveries from the west to eastern settlements amounted to 162,000 tons.6 Over the last 10 years traffic has picked up again, and, in 2011 five voyages with diesel fuel between western Russian ports and towns and settlements in Russian Far East were reported. In 2012 this had increased to 11, and in 2013 there were 21 such transports. In total, in 2013 about 235,000 tons of cargo was transported in ‘domestic transit’ distributed over 31 voyages. The fuel transports form a base-load in the domestic transit. But there are also ‘new’ cargoes in the domestic transit. In 2011 there were four refrigerator ships taking frozen fish from Kamchatka to St. Petersburg, one in 2012 and zero in 2013. A striking development is the nine voyages with general cargo in 2013, eight of which took cargo from west Russian ports to the Russian Far East (see Figure 4). Judged on the background of the last three years’ traffic, however, there is not a stable cargo pattern, suggesting that the new shipments are a reflection of short term possibilities in the markets and freight conditions rather than a determined effort to use the NSR. These cargoes do not have to be sent via NSR, they could find other markets and also in some cases, other means of transportation, such as rail and air. That being said, the heterogeneous ‘general cargo’ category will probably grow in correspondence with new industrial development along the coast of Eastern Siberia and the Far East. For some of these projects there is no alternative to the NSR. 5

Arktik-TV, 2014, ‘Man — Icebreaker’. Available at http://www.arctic-tv.ru/news/ glavnye-sobytiya-dnya/chelovek---ledokol (accessed on March 14, 2014), in Russian. 6 Ragner, 2000, p. 13.

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A. Moe 25 20 15 10

2011

5

2012 2013

0

Figure 4. Number of NSR domestic transit voyages 2011–2013, by cargo.

If we now look more closely on the international transits, defined as voyages with port of departure or destination outside, or both, outside Russia, we see that most of the voyages emanate from ports in Western Russia, typically Murmansk and Arkhangelsk,7 as depicted in Figure 5. But after a peak in 2012, sailings from these ports fell and the numbers in 2013 were below the 2011 level. Among the destinations, Europe stands out in 2012 and 2013, whereas China and South Korea have fallen down from the relatively high level of 2011, as shown in Figure 6. The dominant cargo for international transit has been hydrocarbons, particularly gas condensate, as seen in Figure 7. Typically this is produced by the company Novatek at its fields in West Siberia and brought by rail to a port in the White Sea, Vitino, but also to Murmansk, and shipped to world markets. In 2011 there were nine such voyages going eastwards, and seven in 2012. However, by 2013 the number fell dramatically. Only two shipments 7

Journeys with departure or destination within Russia are by some sources classified as ‘destinational’ — sailings between the Arctic and international markets. See e.g. Arctic Marine Shipping Assessment 2009 Report, Arctic Council, 2009.

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14 12 10 8 6

2011

4

2012

2

2013

0

Figure 5. departure.

Number of NSR international transits 2011–2013, by port of

12 10 8 6 2011 4

2012

2

2013

0

Figure 6.

Number of international NSR transits 2011–2013, by port destination.

with gas condensate were sent eastwards from Murmansk. The explanation is the opening of a plant for processing of stable gas condensate and a sea terminal at Ust-Luga in the Baltic Sea in the summer of 2013. This means that the products to a larger extent than in the previous two years will be directed towards western

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A. Moe 14 12 10 8 6

2011

4

2012

2

2013

0

Figure 7.

Number of international NSR transits, by composition of cargo.

markets.8 There will probably be occasional shipments eastwards from Vitino in the years ahead, and in 2013 two were in fact sent eastwards from Ust-Luga, but the overall picture is that this traffic will decrease. Nevertheless the total number of hydrocarbon transports remains stable since shipments of other hydrocarbons than gas condensate have increased. Whereas 2011 and 2012 were dominated by tankers taking hydrocarbons out of Russia, 2013 saw several journeys with petroleum products from Asia to Europe and also some from Europe to Asia without visiting a Russian port. The first voyage with a liquefied natural gas (LNG) carrier took place in 2012 and a second one in 2013, both taking gas from Norway’s Snow White field to Japan. Even if altogether the volumes are small, it is interesting to note that oil products go both ways on the NSR, indicating that the sea route is useful in taking advantage of price differentials between Pacific and European markets. The major bulk cargo is iron ore with three, four, and three voyages respectively in 2011, 2012, and 2013. All departed from Murmansk and had China as their destination. 8

Chernov, 2013.

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As seen in Figure 7, many voyages are ballast and repositioning. On the one hand such voyages are a natural part of ship movements along the route, reflecting ship-owners relocating their vessels in the most effective way. It is, however, also a cause of concern when the share is as high as here. The high share of ships in ballast is an indication of lack of return cargo, which subtracts from the commercial attractiveness of shipping along NSR. Yamal LNG The Yamal LNG project depends on extensive use of NSR — year round. For this reason the project is seen as crucial for the further development of NSR. This project will extract natural gas from the Tambeyskoe group of fields on the eastern side of the Yamal peninsula, build an LNG factory and port at Sabetta and ship out the product via the Northern Sea Route. The project is expected to reach a plateau level of 16.5 million tons of LNG per year. Primary markets are in North-East Asia, but deliveries to the Atlantic market in the winter months are also foreseen. A factor complicating development of a business plan was that Gazprom by law holds a gas export monopoly, which it vehemently protects. After a prolonged battle, Novatek, as well as Rosneft, was given the right to export LNG.9 9

Russian Presidential Executive Office, 2013, ‘Instructions from the President of the Russian Federation. Available at http://kremlin.ru/assignments/19437 (accessed on March 14, 2014), in Russian. The decision was later written into law, operative from 2014. Hines & Marchenko, 2014. The permission to export, which is granted selectively, is for markets beyond the reach of Russian pipeline (Gazprom) gas. Thus a deal was concluded with Fenosa to supply 2.5 million tons annually to Spain. ‘Yamal LNG and Gas Natural Fenosa Sign Long-Term LNG Supply Contract’, press release from Yamal LNG and Gas Natural Fenosa, October 31, 2013. Available at http://www.gasnaturalfenosa.com/en/press+room/news/1285338 473668/1297159852041/yamal+lng+and+gas+natural+fenosa+sign+longterm+lng+supply+contract.html (accessed on July 25, 2014). By December 2013 Novatek reported that 70% of the project’s output had been contracted. Novatek, 2013, ‘Final Investment Decision Made on Yamal LNG Project’, Novatek press

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This was probably a condition for the project’s realization and a final investment decision was made in December 2013, with overall capital expenditures estimated at USD 26.9 billion.10 The project was developed by the independent Russian gas company Novatek, owning 80%, in collaboration with the French Total, owning 20%. In June 2013 it was announced that China National Petroleum Corporation (CNPC) would buy a 20% stake in the project from Novatek, coupled with contracts for gas deliveries. The deal was closed in January 2014.11 Also in that month an intergovernmental agreement was reached between Russia and China where the Russian side guaranteed favorable tax conditions until 2045 and the Chinese committed to buy three million tons per year.12 Construction of the port in Sabetta, where the Russian government contributes substantially, started in July 2012 and front-end engineering design work of the project was completed in 2012. An option to build 16 ice-strengthened carriers was won by Daewoo of South Korea in 2013. The LNG carriers ordered are designed to cut through 1.5 meters of ice with a continuous speed of five knots. They shall be able to go through 2.1 meters of ice independently, with less release, December 18, 2013. Available at http://novatek.ru/en/press/releases/index. php?id_4=812 (accessed on July 25, 2014). 10 Novatek, 2013, ‘Final Investment Decision Made on Yamal LNG Project’, Press release from Novatek, December 18, 2013. Available at http://novatek.ru/ en/press/releases/index.php?id_4=812 (accessed on July 25, 2014). 11 Novatek, 2014, ‘NOVATEK Closes Sale of 20% Interest in Yamal LNG to CNPC’, Press release, January 14, 2014. Available at http://novatek.ru/en/press/ releases/index.php?id_4=826 (accessed on March 14, 2014). 12 Official Russian legal information web portal, ‘Agreement between the Government of the Russian Federation and the Government of the Peoples’ Republic of China on cooperation in the sphere of realization of the project ‘Yamal LNG’ of 13 and 20 January 2014’. Available at http://pravo.gov.ru:8080/page. aspx?91153 (accessed on March 26, 2014), in Russian.

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speed. The ships will be sold to shipping companies selected by Yamal LNG.13 Contract for the first carrier, to be financed by and operated by Sovcomflot, was signed in March 2014.14 There is no disagreement that small icebreakers to keep the Port of Sabetta open will be needed, and also that heavy, including nuclear, icebreakers will be required to lead the LNG carriers out along the Yamal peninsula. There seems, however, to be conflicting positions regarding the role of icebreaker escort for the longer hauls. Yamal LNG has argued that the new LNG carriers can sail without the escort of nuclear icebreakers most of the time.15 This position contrasts with statements from Atomflot, who maintains that the escorting of LNG carriers from Yamal will form a stable demand for icebreaker services and thus revenues in the years ahead.16 Atomflot estimates that there will be some 200–250 port calls annually in Sabetta by LNG carriers when the project is fully developed.17 Escorting of vessels in winter months of the construction phase 13

Novatek, 2013, ‘Yamal LNG Names Tender Winner Among Shipyards and Signs Agreement to Build LNG Tankers’, Press release, July 4, 2013. Available at http:// www.novatek.ru/en/business/yamal/southtambey/ (accessed on March 14, 2014). 14 WMN Staff, 2014, ‘DSME to Build 1st ARC7 Ice-Class Tanker for Yamal’, World Maritime News, March 17, 2014. Available at http://worldmaritimenews. com/archives/106699/dsme-to-build-1st-arc7-ice-class-tanker-for-yamal/ (accessed on March 14, 2014). 15 Larionova, 2013. Sovcomflot seems to share Atomflot’s opinion, namely that (nuclear) icebreakers still will be needed, although this is expressed in more indirect terms. See Russian Presidential Executive Office, ‘Stenographic report from meeting between General Director Sergey Frank and President Vladimir Putin 6 August 2013’. Available at http://kremlin.ru/news/19002 (accessed on March 14, 2014), in Russian. 16 In the words of Atomflot’s general director Yamal LNG is ‘an anchor customer’ for Atomflot. OilCapital.ru, ‘Atomflot plans conclude a contract about servicing the Yamal LNG project for 40 years’, December 3, 2013. Available at http://www. oilcapital.ru/industry/226226.html (accessed on July 25, 2014), in Russian. 17 ‘Into the Arctic with new technologies’, interview with Atomflot’s deputy director Mustafa Kashka, in Russian, Strana Rosatom, No. 45, December, 2013.

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starting 2014 will also be a substantial task, some three to five vessels were expected each month.18 Atomflot has announced that it will sign a long-term agreement with Yamal LNG.19 It also intends to enter into an agreement with the oil company Gazprom Neft for escorting tankers lifting oil from the Novy Port field further south on the Yamal Peninsula, estimated production is 8 million tons annually.20 What the agreements will include is not clear and it is reasonable to expect that a debate on how much icebreaker capacity will be needed along the sea route will continue in the years ahead. Conclusion The number of commercial transits is still very limited. It is difficult to draw clear conclusions on the interest in NSR transit based on these numbers alone, but it seems that much of the traffic has been driven by shipping companies availing themselves of short term opportunities, rather than reflecting long term strategies for increased usage of this Arctic transport corridor. A case in point is the transportation of gas condensate from ports in the Barents Sea and the White Sea to East Asian markets, a major cargo on NSR in 2011 and 2012, which was radically reduced when the producer built a new terminal on the Baltic Sea and found it more profitable to send more of the condensate westwards. Also the Available at http://www.strana-rosatom.ru/pdf/rsa125.pdf (accessed on July 25, 2014), in Russian. 18 ‘Atomflot plans to conclude a contract about servicing the Yamal LNG project for 40 years’, Neft Rossii, December 4, 2013. Available at http://www.oilru.com/ news/389192 (accessed on March 14, 2014), in Russian. 19 Ibid. 20 ‘Into the Arctic with new technologies’, interview with Atomflot’s deputy director Mustafa Kashka, in Russian, Strana Rosatom, No. 45, December, 2013. Available at http://www.strana-rosatom.ru/pdf/rsa125.pdf (accessed on July 25, 2014), in Russian.

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historic voyage with iron ore from Kirkenes in Norway to China in 2010 seems to have reflected a short term opportunity, rather than a long term strategy, ever since the ore has been sold to Europe. Indeed, shipping companies maintain that it is the international freight market for different segments of cargo and the availability of ice strengthened vessels that have been the decisive factor for voyages that have taken place so far. They bear little evidence of international shipping committing itself to large scale use of the NSR in terms of investments. It seems that for the Russian authorities Yamal LNG’s importance lies more in its role as generator of traffic for NSR than as a revenue earner. The government is offering substantial tax concessions for the production and sale of LNG, but at the same time expects that the project will utilize and pay for extensive icebreaker services. The hope is that this traffic will constitute a considerable and stable source of revenue that can be used to maintain the icebreaker fleet, and help cure the constant financial headache associated with NSR infrastructure. Exactly how this calculation will be made up is not known, but a convincing scheme for Yamal LNG will undoubtedly have implications beyond this particular project and may make other potential users more willing to consider investments in fleets dedicated to use on the NSR. Obviously though, as discussed elsewhere, there are also several other factors that will influence such decisions.21 References Chernov, V., 2013, ‘Ust-Luga: Gas attack’, Port News, June 20, 2013. Available at http://portnews.ru/comments/print/1625/?backurl=/comments/ (accessed on March 14, 2014).

21

Moe, 2014.

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Hines, J. and Marchenko, A., 2014, ‘Russia Selectively Liberalizes Gas Export Law for LNG’, Oil and Gas Journal, 12(1). Available at http://www.ogj. com/articles/print/volume-112/issue-1/general-interest/russia-selectivelyliberalizes-gas.html (accessed on March 14, 2014). Larionova, T., 2013, ‘A Hard Nut’, Transport Rossii, September 12, 2013. Available at http://www.transportrussia.ru/biznes-territorii/krepkiy-oreshek. html (accessed on March 26, 2014), in Russian. Moe, A., 2014, ‘The Northern Sea Route: Smooth Sailing Ahead?’, Strategic Analysis, 38(6), November–December, pp. 784–802. Ragner, C.L., 2000, Northern Sea Route Cargo Flows and Infrastructure — Present State and Future Potential’, (Lysaker, Fridtjof Nansen Institute), FNI Report 13/2000, 2000.

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Chapter 7

A Comparative Study of the Administration of the Canadian Northwest Passage and the Russian Northern Sea Route ZOU Leilei and HUANG Shuolin

Navigation and shipping on the Arctic seaways is no longer a distant future idea. Except for the central Arctic sea route which has been predicted to be the last to be opened for navigation as it means travelling through regions covered with ice accumulated over the years, commercial shipping in the Northwest Passage (NWP) and the Northern Sea Route (NSR) has been put forward on the agenda. As the de facto administrators for these two Arctic sea routes, hereafter referred to as the ‘Arctic Passage’, including both the NWP and the NSR, Canada, and Russia share many similarities in their administration-modes of the sea routes. This is because the challenges and opportunities the two countries face in Arctic sea route administration are largely similar. Russia is the largest Arctic country and possesses the longest Arctic coastline and has evident geographical advantages. The development of the Arctic region and the navigation of the Arctic seaways impacts and holds great significance for the two countries in terms of politics, society, economics, and military. Currently, Canada and Russia are the administrators of the Arctic sea routes, and they are the only Arctic countries to develop and implement domestic laws on Arctic seaways administration. The 121

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international community is still in dispute over the two countries’ sovereignty claims to the Arctic sea routes. Nevertheless, there are differences between Canada and Russia’s Arctic sea route management, and this comparative study reveals the distinctive political, social, economic, and even ideological characteristics between the two countries’ administrative measures. Taking a comparative perspective and conducting an in-depth analysis of the two countries’ sovereignty claims over the sea routes, the differences in their economic interests, attitudes towards the prospects of commercial shipping in the Arctic, as well as the administrative measures in terms of military strategies and environmental protection, is shown. The purpose of this comparative study of Canada and Russia’s Arctic sea route administration initiatives is to help the international community better respond to the open navigation of the Arctic sea routes in the future. The current status of the Northwest Passage and the Northern Sea Route Before we set out on the comparative study of the NWP and the NSR, it is important to first understand the navigational conditions, the significance of the sea routes, and the current navigational situation, to better comprehend the impact that navigation in the NWP and the NSR will have on the international community in the future. Why the Arctic Passage matters The NWP stretches from the North Atlantic Ocean’s Davis Strait and Baffin Island in the east westwards to the Canadian Arctic Archipelago, goes along Alaska’s northern offshore straits, passes by the Bering Strait and finally reaches the Pacific Ocean. Once it is navigable, the NWP can replace the traditional Far East–North American route. The traditional route spans across the North Pacific through the Panama Canal, and is the cargo shipping route in the Pacific with the largest cargo load. The NWP not only provides faster shipping routes, it will also relieve the traffic overload at the Panama Canal.

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The NSR begins at the Shetland Islands at the western end of Russia and extends eastwards along the coastal straits of Russian Arctic Ocean until the Bering Strait. Most of the NSR waters are Russian-controlled seas. When the NSR becomes a fully navigable commercial shipping route, it can replace the Far East–Northwest Europe route via the Suez Canal, the traditional shipping route with great amounts of cargo and extensive occasions of piracy. In general, in comparison to the key traditional routes passing by the Panama Canal or the Suez Canal, the NWP and the NSR have a few advantages in common, namely the economic benefits of a shorter voyage, the capacity to for large cargo vessels’ passage, and overload-relief of the traditional routes.1 Therefore, full-scale commercial navigation in the NWP and NSR will change the world’s shipping route map, and has the potential to drive economic and industrial development in coastal regions and countries along these two Arctic sea routes. Furthermore, trade revolved around the Arctic region, which depends on shipping between Europe, Asia, and the United States will prosper. In comparison, one of the reasons why the international community will pay closer attention to the prospects of the navigation in the NSR is the opportunity to avoid the politically fragile and insecure environment around the Suez Canal. Another important reason is that the opening of NSR will shorten traditional shipping routes by a reduction of 25% to 55%. Compared with the NWP, traditional shipping routes can be shortened by 20%. Thus, the potential commercial value of the NSR seems greater.2 As a ‘near-Arctic’ country,3 navigation on the Arctic sea routes is of great significance to China. Zhang Xia from the Polar Research Institute of China (PRIC) assesses that the opening of the Arctic 1

Wang & Shou, 2012, pp. 180–182. Zhang et al., 2009. 3 Lu, 2010. 2

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Passage will change the industrial outlook in the coastal regions of China, as well as bring forth changes in the mode of economic development. It may also especially usher in new developmental opportunities for the Yangtze Delta and the surrounding areas of the Bohai Bay port. As for the northeastern regions of China which connects to North Korea in the east and shares borders with Russia in the north, Zhang is hopeful that the Arctic Passage will inspire subsequent development in other traditional coastal areas.4 The benefits that open navigation of the Arctic Passage will bring, have drawn the attention of the international community. However, undeniably, the harsh natural environment of the Arctic puts greater pressure and more stringent demands on the vessels, seasons, costs, personnel, and technologies and so on. These demands offset the advantages of sailing in the Arctic Passage to a certain extent. Conditions for commercial shipping We are now at a rudimentary stage of the Arctic Passage as the new shipping express route connecting Asia both to the United States and to Europe. In the summer of 2009, two German commercial ships become the first foreign vessels to sail through the NSR. The two carriers were not ice-breaker vessels. This to a certain extent marked the start of a new international sea route suitable for navigation. According to partial statistics, in the summer of 2011, more than 30 commercial vessels sailed through the Northeast Passage. By the summer of 2012, it had doubled to more than 60 vessels, and the navigation period was extended from the past two to three months a year to five months, from mid-July to early December. On December 6, 2012, a commercial ship departed from the Norwegian port of Hammerfest, sailed across the NSR to Yokohama Harbor in 4

Zhang et al., 2009, pp. 86–93.

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Japan, and became the latest cargo ship to sail across the NSR. According to the Canadian Broadcasting Corporation’s website, in September 2008, a Canadian commercial ship successfully completed a sailing trip from Montreal to the western region of Nunavut without a piloting ice-breaker vessel. The Canadian Coast Guard assessed it as ‘the first commercial navigation across the Northwest Passage’.5 As of yet, there has not been commercial shipping of considerable scale in the NWP in contrast with the Northeast Passage. Furthermore, some of NWP straits will still not be suitable for navigation. However, as the Arctic ice melts and with the improvement of seaway facilities, it may only be a matter of time before the NWP is cleared for international shipping and navigation. Comparative study of the Canadian and Russian Arctic sea route administrations A comparative study of the Canadian and Russian Arctic sea route administrations provides insights into the two countries’ similarities and differences in attitudes towards sovereignty claims, the potential economic benefits, and the navigational prospects of the Arctic sea routes. Their actions of Arctic sea route administration reflect distinctive characteristics in the two countries’ current sea route policies and trends. Sovereignty claims over the Arctic Passage In the Arctic, Russia is the largest country with the longest Arctic coastline. Thus, Arctic interests are of obvious importance to the country. Moreover, as Russia has always held a strong political position, it has also taken on a relatively tough attitude in Arctic affairs, particularly with regards to important matters such as 5

CBC News, 2008, ‘First Commercial Ship Sails Through Northwest Passage’. Available at http://www.cbc.ca/news/canada/north/1st-commercial-ship-sailsthrough-northwest-passage-1.715493 (accessed on September 24, 2014).

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sovereignty claims. Consistently with its attitude, Russia has always defended its Arctic sovereignty rights with a powerful military force. As the Russian economy slowly recovers, it is also increasingly building up its military in the Arctic. In December 2013, the Russian President Vladimir Putin instructed the Ministry of Defense to boost Russia’s military presence in the Arctic in order to safeguard national interests and security. To convey its firm stance on Arctic matters to the international community, Russia has continually conducted military exercises in the Arctic, and strengthened the construction of both computer hardware and software to ensure Arctic military security. In this way, it is sending a message to the outside world that Russia will not hesitate to utilize all its forces, including the military, in order to defend its sovereignty and national interests in the Arctic. In order to gain full control and management of the NSR, Russia is willing to pay all costs, even to go beyond the provisions of international law. For example, before the release in 2013 of the Rules of Navigation in the Water Area of Northern Sea Route,6 in which the legal definition of the NSR water areas are as being in the Russian Arctic Ocean waters, its territorial seas and the exclusive economic zone (EEZ), the then-Soviet Union had unilaterally declared that its domestic Arctic law was applicable to the broad area beyond 200 nautical miles of Russia’s EEZ, including the Arctic high seas.7 This meant that foreign vessels sailing in international waters near Russia’s EEZ were subject to Russian domestic law. 6

The Northern Sea Route Administration, 2013, ‘Rules of Navigation in the Water Area of Northern Sea Route. Unofficial translation’. Available at http:// www.nsra.ru/en/pravila_plavaniya/ (accessed on September 24, 2014). 7 Decree of the Union of Soviet Socialist Republics on the economic zone, February 29, 1984, Chinese translation; Edict on Intensifying Nature Protection in Areas of the Far North and Marine Areas Adjacent to the Northern Coast of the USSR, Chinese translation.

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Notwithstanding, the international community believes that although the most part of the NSR are Russian-controlled waters, some of the sea route pass through the high seas.8 Despite this, the Soviet Union claimed Arctic waters under its ‘historic rights’ in its 1960-Frontier Law.9 This line was continued in the important Arctic strategic document Principles of State Policy of the Russian Federation in the Arctic for the Period up to 2020 and Beyond. Here it is stated that any attempt to change the sovereign nature of the NSR shall be deemed as a threat and challenge to Russia’s national sovereignty.10 There are numerous examples of Russia’s tough attitude to sovereignty claims of the NSR. In order to restrict international transits or innocent passages of the NSR, Russia unilaterally implemented a strict ‘mandatory reporting’ system11 on foreign vessels passing through the NSR. Even in the case where icebreaking and pilotage services were not needed, vessels were obligated to accept the services and pay the fees.12 Russia also made an Arctic contaminants list via domestic legislation.13 The list 8

Roach & Smith, 1996. Edict of 5 August, 1960 (USSR), ‘Statue on the Protection of the Sate Frontier of the USSR’, No. 34, text 324, Chinese translation. 10 The Security Council of the Russian Federation, 2008, ‘Principles of State Policy of the Russian Federation in the Arctic for the Period up to 2020 and Beyond’. Available at http://www.scrf.gov.ru/documents/98.html (accessed on September 24, 2014), in Russian. 11 Regulations for Navigation on the Seaways of the Northern Sea Route, adopted in 1990. Available at http://www.arctic-lio.com/docs/nsr/legislation/Rules_of_ navigation_on_the_seaways_of_the_Northern_Sea_Route.pdf (accessed on September 25, 2014). 12 Federal Law No. 155-FZ on Internal sea waters, territorial sea and contiguous zone of the Russian Federation, 1998, Article 14, July 31, Chinese translation. 13 Edict on Intensifying Nature Protection in Areas of the Far North and Marine Areas Adjacent to the Northern Coast of the USSR, 1984; Federal Act on the exclusive economic zone of the Russian Federation, 1998. Available at http:// www.un.org/depts/los/LEGISLATIONANDTREATIES/PDFFILES/RUS_1998_ Act_EZ.pdf (accessed on September 25, 2014). 9

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included items beyond that of the internationally accepted list, and it was later criticized as going beyond international standards. Russia removed the immunity system for foreign public vessels,14 violating the provisions of the United Nations Convention on the Law of the Sea (UNCLOS). All these unilateral moves reflect the hardliner attitude that Russia takes on sovereignty and control of the NSR. Contrary to Russia’s tough political stance and reliance on military power in claiming sovereignty over the NSR, Canada is showing to be more refined in its administration of Arctic affairs. Even though Canada is also an important Arctic country, it demonstrates its importance to the Arctic region by paying more attention to areas such as environmental protection, and the promotion of social and economic development. Canada tends to seek for a more flexible approach within the international law framework to lay claims to its sovereignty in the Arctic, in view of its political, economic, and military realities. Although, in recent years its stance on sovereignty over the NWP has become clearer and it has carried out more measures in the NWP.15 In 1969, the American oil tanker Manhattan disregarded the Canadian government’s claim that the NWP belonged to Canada and sailed through the NWP. With their sovereignty over the seaways being challenged, the Canadian government introduced the Arctic Waters Pollution Prevention Act (AWPPA) in 1970 to strengthen their administration of the NWP in the name of environmental protection. Furthermore, to obtain international acceptance of the AWPPA as a customary law, the government of Canada used diplomatic relations. Canada succeeded in reflecting the AWPPA concepts in UNCLOS so that it was covered under Article 234 about ice-covered areas. Relying on strategic unilateralism, the Canadian 14 15

Chircop et al., 2014, pp. 291–327. Zou & Fu, 2014.

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government made its sovereignty claims over the NWP indirectly within the framework of international law. Canada and Russia essentially share similar desires to claim sovereignty over the Arctic Passage. However, apart from the unilateralism, the two countries’ take different approaches in making those claims. Yet, under the situation of international peace and harmony, both Canada and Russia should dispose their unilateralist tendencies and adopt a collaborative attitude to strengthen international cooperation between Arctic and non-Arctic countries. The two countries should actively communicate and cooperate with the Arctic Council, the International Maritime Organization (IMO), the United Nations, and other international organizations to resolve disputes democratically and effectively. Trade-offs between economic interests and sovereignty claims to the Arctic Passage While dealing with disputes over sovereignty rights, both Canada and Russia are also well aware of the potential economic benefits that come with open navigation of the Arctic Passage. Given strong international demand for transit passage and innocent passage through the Arctic Passage, in addition to that international law is unable to resolve sovereignty issues in the Arctic, it is hard rights in the short term to conclude on the matter of Arctic sovereignty rights. In this situation, the administrative measures Canada and Russia take to govern the Arctic Passage reflect the different attitudes of the two countries. When it comes to Russia, sovereignty over the seaways seems like a ‘done deal’ because of its powerful military and hardliner political style. Russia seems more eager to tap into the substantial economic potential that comes from navigation of the Arctic. Under the Soviet Union open navigation of the NSR was restricted by natural conditions and never on the agenda. However, as the prospects

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of NSR transits became brighter, coupled with the rising political confidence of Putin’s Russian government, Russia began to actively promote international navigation on its Arctic seaways, and even used it as one of its strategies for economic recovery. The opening of the NSR will promote development in the Russian Far East region. The region will also benefit from the vitality and flourishing development in Northeast Asia. Russia’s economic-oriented position to NSR-administration is evident in its mandatory-fee system. According to the 1990 Regulations for Navigation on the Seaways of the Northern Sea Route, any vessel sailing in the NSR, whether in the EEZ or internal waters, had to accept and was required to pay for ice-breaking and pilotage services, regardless of whether or not the actual situation requires such services.16 The costs of the icebreaker service fees are high and only applied to foreign vessels. The Russian domestic system’s over-emphasis on the economic benefits that it gains from the seaways has drawn widespread international criticism. Between economic interests and sovereignty claims, Russia seems keener on obtaining the economic benefits that come from developing the NSR than Canada, which seems more concerned about its sovereignty rights of the NWP. This may be associated with the different political environments of the two countries. The United States firmly supports the position that the Arctic seaways are suitable for transits and not only so, it is the leading country of the country-group which supports this argument. As Russia is the political opponent of the United States, ‘confrontation’ is the main theme in their bilateral relations, while the political and economic status of Canada determines its alliance with its neighboring USA. Thus, Canada is most certainly paying great attention to the 16

Regulations for Navigation on the Seaways of the Northern Sea Route, adopted in 1990. Available at http://www.arctic-lio.com/docs/nsr/legislation/Rules_of_ navigation_on_the_seaways_of_the_Northern_Sea_Route.pdf (accessed on September 25, 2014).

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opposing stand of the United States on the issue of sovereignty of Canada’s NWP; sovereignty claims have become one of the ultimate goals in their management of the NWP. The AWPPA is an important Canadian domestic legislation for the prevention of marine pollution in the Arctic seas. Furthermore, the importance of this law is also reflected in its strict environmental-protection management of the seaways through which Canada seeks to fulfill its sovereignty claims over the sea routes. Contrary to Russia’s enforcement of the mandatory-reporting system, Canada only had a voluntary registration for foreign vessels passing through the NWP before the year 2010. It was only in 2010 with the implementation of the Northern Canada Vessel Traffic Services Zone Regulations that mandatory reporting was enforced.17 The establishment of the mandatory-reporting system reflects the positive attitude that Canada holds about its sovereignty of the seaways, and also indicates the degree of importance that Canada places on this issue. According to the Canadian Oceans Act, Canada only charges associated ships navigating in the Arctic seas the actual costs incurred after service is provided and these fees do not cover the costs of search and rescue services provided to stranded vessels.18 As can be observed, mandatory reporting is the common ground between Canada and Russia, but mandatory fees are characteristic only to Russia. Nevertheless, there are significant differences between the two countries’ mandatory-reporting systems. Canada adopts the friendly and cooperative attitude where one applies and gains passage. To date, there have not been any cases where access was not granted after application. According to data released by the NSR Administration, Russia had already rejected more than 70 17

Government of Canada, 2010, Northern Canada Vessel Traffic Services Zone Regulations. Available at http://laws-lois.justice.gc.ca/PDF/SOR-2010-127.pdf (accessed on September 25, 2014). 18 Government of Canada, 1996, Oceans Acts. Available at http://laws-lois.justice. gc.ca/PDF/O-2.4.pdf (accessed on September 25, 2014).

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navigation applications by the end of September 2013.19 This also shows that Canada’s mandatory-reporting system is a way of declaring sovereignty and is not very significant in seaway management, whereas Russia asserts its identity as the ‘sovereign owner’ by forceful management of the waterways. Sovereignty does not seem to be the most important issue on their minds; exploitation of the economic potential of the waterways is the pressing matter. Arctic seaways navigation prospects from the Canadian and Russian perspective In recent years, Canada and Russia have both drawn up their national Arctic strategies. The attitudes and future policies of the two countries towards the Arctic navigation can be explored from the descriptions of their national Arctic strategies. In 2009, Canada released Canada’s Northern Strategy20 stating that it is difficult for the NWP to be a safe and reliable shipping channel in the near future, expressing cautiousness and pessimism towards the opening of the NWP. Although the strategy also acknowledged that the opening of the NWP would enhance social and economic development, as well as international shipping trade, it pointed to that the conditions are not yet suitable for navigation. On the other hand, Russia promulgated the Principles of State Policy of the Russian Federation in the Arctic for the Period up to 2020 and Beyond in 2008,21 where 19

Northern Sea Route Administration, 2013, ‘Refusal to Give Permission for Navigation on the NSR’. Available at http://www.nsra.ru/ru/otkazu/ (accessed on September 25, 2014), in Russian. 20 Government of Canada, 2009, Canada’s Northern Strategy: Our North, Our Heritage, Our Future. Available at http://publications.gc.ca/site/eng/330644/ publication.html (accessed on September 25, 2014). 21 The Security Council of the Russian Federation, 2008, ‘Principles of State Policy of the Russian Federation in the Arctic for the period up to 2020 and Beyond’. Available at http://www.scrf.gov.ru/documents/98.html (accessed on September 24, 2014), in Russian.

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the importance of Arctic maritime traffic to their nation is underlined and a firm determination to develop basic waterways infrastructure is expressed, affirming their confidence in opening the NSR. President Putin publicly declared in 2013 that Russia would be building the NSR into a world-class route on par with traditional channels such as the Suez Canal, the Panama Canal and other important shipping lanes. The Russian government’s attitude towards the NSR is more positive and proactive in comparison to the attitude of the Canadian government, which is relatively more conservative and cautious. The profit-focused mandatory-fee system implemented on the NSR was heavily criticized by the international community. In order to effectively promote the rapid growth of the NSR as a competitive international route, Russia has relaxed its previously stringent mandatory-fee policy.22 In an amendment federal law23 instituted in 2013, Russia replaced the 1990-regulation on mandatory fees with the Rules of Navigation in the Water Area of Northern Sea Route.24 The 2013-rules of navigation clearly specify the required conditions for ships to sail independently. If the vessels meet the required ice-class standards, and obtain ice- and seasonal conditionspermits, the ships can opt out of the previously mandatory icebreaking and escorting services. As such, the mandatory fees may now ironically be renamed ‘selective-mandatory fees’, and the 22

Zhang et al., 2014, pp. 269–275. The Federal Law No. 132, on amendments to specific legislative acts of the Russian Federation related to governmental regulation of merchant shipping in the water area of the Northern Sea Route, adopted on July 28, 2012 came into force on January 27, 2013. See Portnews, 2013, ‘RF Ministry of Justice Registers Regulations for Navigation in Northern Sea Route’s Water Area’. Available at http://en.portnews.ru/news/158671/ (accessed on September 25, 2014). 24 The Northern Sea Route Administration, 2013, ‘Rules of Navigation in the Water Area of Northern Sea Route. Unofficial Translation’. Available at http:// www.nsra.ru/en/pravila_plavaniya/ (accessed on September 24, 2014). 23

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international community can also observe that Russia seems to be modifying its aggressive profit-oriented attitude to a more open and cooperative one. As the prospects of navigation in the Arctic Passage become brighter, Russia is also paying close attention to improving sea route infrastructure, provide services such as ports, navigation, safety, communications, search and rescue which commercial shipping in the Arctic requires. Effectively equipping the NSR, Russia can assume the responsibilities of administrating an international sea route. Russia’s Arctic strategy document Principles of State Policy of the Russian Federation in the Arctic for the Period up to 2020 and Beyond clearly demonstrates its determination to strengthen Arctic infrastructure. The central government of Russia dominates Russia’s moves in Arctic affairs, and as a powerful government, its determination is more easily translated into action. Moreover, appropriate support services to improve the seaways are necessary for implementation of the economy-oriented NSR policies. In addition, as a traditional maritime power, Russia possesses great marine fleets and nautical manpower. Because the Russian Arctic seaways have always been closely associated with its domestic shipping network, its existing operational port services are better than Canada’s. With further improvement and reconstruction, Russia should be able to meet the ancillary services required for a functional of commercial shipping route in the Arctic relatively quickly. Due to Canada’s cautious and pessimistic attitude towards navigation in the NWP as expressed in 2009-Canada’s Northern Strategy, and the fact that so far, there has not been commercial navigation of scale in the NWP, it is evident that Canada is not ready for full-scale commercial shipping in the NWP. The Canadian government has an ambitious Arctic infrastructure plan, which to include, among other things, the construction of a deep water port, ice-breaking patrols, and patrol aircrafts. These investments were

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first mentioned in the 2008-Canada’s First Defense Strategy.25 The 2009-Canada’s Northern Strategy reiterated the importance and emphasis on infrastructure construction mentioned in Canada’s First Defense Strategy. However, the biggest problem with this is that it is only on paper, but not followed up with actions. The determination for an Arctic presence that the Canadian strategic documents stressed has so far been limited to political words; no subsequent actions to demonstrate the will have followed. In contrast with the concentration of power and authority shown by the central government of Russia, the government of Canada seemingly has almost completely decentralized the authority on Arctic affairs to the local governments. Currently, it is very difficult to make improvements of the services and navigational facilities of the seaways and this has become a hindrance for future commercial navigation in the NWP. Canada and Russia’s waterways administration from a military-strategic perspective The economic role of the Arctic Passage is undisputed, but the Arctic Passage also concerns political and military security for both Canada and Russia. During and after the Cold War, the Arctic region was an area of East–West military camp rivalry, with the two countries Russia and the United States. To a certain extent the historical militarization of the Arctic, as well as its military strategic significance exacerbate sovereignty disputes and stringent managements of the Arctic region. The confrontation between the two great powers Russia and the United States is a matter of international stability. Although they are now at peace, Russia has never taken matters of national security 25

Government of Canada, 2008, Canada’s First Defense Strategy. Available at http://www.forces.gc.ca/assets/FORCES_Internet/docs/en/about/CFDS-SDCDeng.pdf (accessed on September 25, 2014).

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lightly. The United States has not yet signed the UNCLOS. One reason could be that the convention might affect its aspirations to influence the seas as part of its great-power policies. The seaways around Russia’s NSR are the most forward military confrontation ground between Russia and the United States. Russia’s tough stance towards sovereignty of the sea route is to a certain extent, a means of preventing its Arctic neighbor the United States from doing as it pleases in Russia’s backyard. Therefore, Russia strictly implemented the mandatory-reporting system for foreign vessels passing through the NSR. Russia rejected the diplomatic immunity of foreign public vessels, whether they were academics, politicians, or legal professionals, in all the waters of the NSR, regardless of whether the vessel was in internal waters, territorial seas or the EEZ. Ensuring political and military security is one of the important root factors behind Russia’s strict implementation of NSR policies. As for Canada, depending on the United States which is stronger than itself, to maintain the country’s political and military security is a natural choice. Only in a time of world peace has Canada have the resources to be concerned about seaways sovereignty. However, it needs to tread carefully to exert a certain amount of force in its sovereignty claims, to maintain the sensitive balance between the interests of the United States and its own. This is also the reason why Canada makes its sovereignty claims in the name of environmental protection. Thus, apart from its strong-handed sovereignty claims Russia is committed to exploiting its interests on the Arctic seaways; while in settling the sovereignty-challenge Canada is weak, leaving economic interests to take the back seat. The Environmental perspective of Canadian and Russian administration of the Arctic Passage The original intention of UNCLOS Article 234 on ice-covered areas, was protection of the fragile environment and ecosystem of

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the ice-covered areas in the EEZs, granting special rights to the coastal states to develop domestic laws in order to prevent, reduce and control the marine pollution and contamination by vessels in ice-covered areas within the EEZ.26 In general, the domestic laws of coastal states are more stringent than universal international laws. This is evident by contrasting the regulations stated in Canada’s AWPPA and those of the IMO’s International Convention for the Prevention of Pollution from Ships (MARPOL). The AWPPA stipulates that tankers that sail in the NWP must discharge zero oil and sewage, and waste dumping is not allowed.27 Annex 1 of the MARPOL permits oil and sewage discharge from ships within a certain limit. Moreover, although Annex 5 of the MARPOL prohibits the dumping of plastic waste, it allows the dumping of packaging and wrappers 25 nautical miles away from land, as well as the dumping of waste paper, glass, rags, and metal waste 12 nautical miles away from land.28 The Canadian domestic legislation has higher standards than that stated in the IMO convention. In view of Canada’s good practice of strict environmental protection measures and legal safeguarding the Arctic waters, the IMO appointed Canada in 1991 as the leader to a technical working group responsible for drafting special rules for navigation in polar waters, in full preparation for the development of the Guidelines for Ships Operating in Arctic Ice-covered Waters.29 Russia’s relevant measures and laws for environmental protection in the Arctic Seas are a stark contrast to Canada’s strict regime. 26

UNCLOS, Article 234. Government of Canada, Arctic Waters Pollution Prevention Act, 1970, the Revised Statutes of 1985 can be found at http://laws-lois.justice.gc.ca/PDF/A-12. pdf (accessed on September 25, 2014). 28 IMO, the International Convention for the Prevention of Pollution from Ships, MARPOL, 1973/78. 29 Guo, 2009. 27

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Although controlling marine pollution is one of the main themes of Russia’s Arctic policies, its ubiquitous polluter-pays principle in dealing with marine pollution seems to drain the efforts to prevent marine pollution. Although no specific data standard is given in Article 61 of the 2013 ‘Rules of Navigation in the Northern Sea Route Water Area’, it was clearly stated that ships sailing through the NSR must be equipped with oil tanks of sufficient volume to collect residual oil generated during the voyage across the NSR, and the ships must also be equipped with sufficient storage tanks to collect waste, as well as possess adequate supplies of fuel and fresh water to avoid the need for replenishment along the way. There are even requirements for ballast vessels.30 However, the polluter-pays system which is widespread in Russia’s Arctic laws relevant to environmental pollution, as well as the strict mandatory-fee system makes the international community think that Russia has the intention to rise at the expense of others in terms of economic benefits and environmental protection. Given the aim to achieve maximum profits from the navigation of the Arctic Passage, environmental protection standards are not Russia’s primary concern. Conclusion Although Canada and Russia both claim sovereignty of Arctic sea routes, they approach the matter in different ways. Russia focuses on the economic potential of the NSR and is full of confidence for the future navigation of the seaways. Its administrative measures actively promote the development of the seaways into an important international navigation channel. Canada on the other hand, due to its various constraints, pays closer attention to its sovereignty claims of the NWP. Because of its cautious attitude towards 30

The Northern Sea Route Administration, 2013, ‘Rules of Navigation in the Water Area of Northern Sea Route. Unofficial Translation’. Available at http:// www.nsra.ru/en/pravila_plavaniya/ (accessed on September 24, 2014).

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navigation of the seaways, it has not been effective in developing the basic infrastructure and facilities for the sea route. In addition, the two countries also differ in the importance placed on political and military security, and environmental protection in their administrative measures. As globalization continues, the international community will call for the relevant countries to implement a standardized international law system in the administration of the Arctic Passage, and ask that relatively uniform domestic maritime legislation and policies be developed to ensure that relevant international laws have common standards, as far as possible.31 One of the ways to regulate Arctic Passage administration is to strengthen communication and cooperation with international organizations which have the advantage of being aligned with international standards of diplomacy, development, and coordination. Fortunately will the Polar Code which the IMO has developed, soon be officially announced and enforced. The Polar Code will provide comprehensive guidelines for navigation in the Polar Regions, and unlike the 2002-Guidelines for Ships Operating in Arctic Ice-covered Waters32 drawn up by the IMO, this code will be enforced as the mandatory standard for navigation in the polar regions. For administrative regulations in the Arctic to be operable and widely recognized internationally, as well as to truly protect the Arctic environment, the international community calls for relevant countries to implement seaways management which is internationally standardized. As the attention of the Arctic Passage gradually shifts from the possibility of the sea-routes operation to more technical requirements

31

Liu & Yang, 2009, pp. 1–5. IMO, 2002, ‘Guidelines for Ships Operating in Arctic Ice-Covered Waters’. Available at http://www.gc.noaa.gov/documents/gcil_1056-MEPC-Circ399.pdf (accessed on September 25, 2014). 32

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needed in the navigation across the seaways and the impact of navigation-related human activities on the Arctic marine environment, scientific, and technological research and innovation on marine environmental protection and maritime safety will become top priorities, as well as improving the relevant legal systems. Canada has established a strategic partnership with Russia because of their similarities in Arctic geopolitical and socioeconomic factors. But to date, the strategic partnership between the two countries is limited to regional cooperation under the Arctic Council’s cooperative framework, and international cooperation in the development of the IMO’s Polar Code. Given that the two countries are comparable in many aspects of Arctic sea route administration, in the future the two countries could further their cooperation and draw on each other’s experiences. As a ‘near-Arctic’ country and a potential navigator of the Arctic Passage, the benefits that navigation in the Arctic Passage could bring to China’s foreign-trade transportation are very important to China. However, China is also acutely aware of that the two countries’ distinct approaches to seaways administration bring controversy and restrictions to the future navigation of the Arctic Passage. For example, China’s research vessel Xuelong had to pay for ice-breaking and escort services when it went on its fifth Arctic expedition and travelled through the NSR in 2012. All Arctic countries require that other countries develop and carry out collaborations in the Arctic on the premise that they accept the Arctic countries’ sovereignty in the Arctic. China should state clearly that Arctic countries will have to settle sovereignty disputes via internal consultations, and that the Chinese government respects the rights of those countries awarded sovereignty after consultations. At the same time, China enjoys the relevant Arctic rights conferred to it by international law.

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References Chircop, A., Bunik, I., McConnell, M. and Svendsen, K., 2014, ‘Comparative Perspectives on the Governance of Navigation and Shipping in Canadian and Russian Arctic Waters’, Ocean Yearbook, 28, pp. 291–327. Guo, P., 2009, International Studies on Arctic Passage Affairs, Beijing: Ocean Press, in Chinese. Liu, H. and Yang, F., 2009, ‘Research on Arctic Environmental Law Issues from the Perspective of International Law’, Ocean University of China Newsletter (Social Sciences Edition), 3, pp. 1–5, in Chinese. Lu, J., 2010, Arctic Geopolitics and China’s Response, Beijing: Current Affairs Publishing House, in Chinese. Moe, A., 2014, ‘The Northern Sea Route: Smooth Sailing Ahead?’, Strategic Analysis, 38(6), November–December, pp. 784–802. Roach, J. and Smith, R., 1996, United States Responses to Excessive Maritime Claims (2nd edition), The Hague: Mijhoff. Wang, Y. and Shou, J., 2012, ‘The Impact of Navigation in the Arctic ‘Northeast Passage’ on China’s Shipping Industry’, International Trade, October, pp. 180–182, in Chinese. Zhang, X., Tu Jingfang, J., Guo, P., Sun, K. and Ling, X., 2009, ‘Evaluation of the Economic Potential of the Arctic Shipping Routes and its Strategic Significance to China’s Economic Development’, China Soft Science Magazine, Part 2, pp. 86–93, in Chinese. Zhang, X., Tu, J., Qian, Z., Wang, Z. and Yang, H., 2014, ‘From Mandatory Icebreaker Guiding to the Permit Regime: Changes to the Northern Sea Route in New Russian Law’, Polar Research, 26(2), pp. 269–275, in Chinese. Zou, L. and Fu, Y., 2014, ‘Canadian Administration of the Northwest Passage and the Favourable and Restraining Factors in its Sovereignty Claims’, Pacific Journal, 22(2), pp. 1–7, in Chinese.

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Chapter 8

Governance and Ownership of the Arctic Ocean: Living Resources and the Continental Shelf Njord Wegge

The United Nation’s Convention of the Law of the Sea (UNCLOS) provides the basic legal regime for the Arctic Ocean. Within the boundaries of this legal framework, important political processes are playing out, not least those pertaining to the delimitation of the coastal states’ extended continental shelves, as well as the regulation of living marine resources. These are areas where the Arctic states, as well as other stakeholders such as China, Japan, and the European Union (EU) have important interests. The efforts toward delimiting the continental shelf and the regulation of the living resources of the Arctic Ocean beyond 200 nautical miles (nm) from the coast, represent processes where both international law as well as scientific research play into the political process, creating a complex and composite whole worthy of further investigation. Research questions, method and structure of article This chapter seeks to investigate the interplay between law, science, and politics in the case of the Arctic Ocean. Through investigating

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two cases — (1) the delimitation of the extended continental shelves, and, (2) the process of establishing a future management system for the marine living resources in the high seas of the Arctic Ocean — I will investigate how issues of ownership and management issues are being settled. Concretely I ask ‘does politics matter’? In other words, is it likely that the (preliminary) outcomes in the two cases can be explained by the application of science, technocracy, and strict interpretation of international law alone, or do issues such as power resources, geography, processes of bargaining, or political entrepreneurship matter as well? Finally I ask, what are the implications for the Asian states, given the dynamic unfolding in the politics of the Arctic Ocean? I will start out by briefly investigating the key legal framework pertaining to the two processes. These include on the one hand the basic provisions found in the UNCLOS, but also later, complementary legislation such as the 1995 UN Fish Stocks Agreement. My empirical data is primarily based on official documents from Arctic and non-Arctic states, as well as protocols from official meetings. I have also acquired empirical insight from interviews with governmental representatives and non-governmental organizations (NGOs), as well as other experts with insight and competence in the cases under investigation. Finally, my analysis will build on secondary material such as journal articles and journalist work relevant to the issues under investigation.

The basic legal framework The UNCLOS is the main legal framework pertaining to the Arctic Ocean. UNCLOS applies globally, and while there in some circles has been a debate whether or not a ‘special legal regime’ is needed for the Arctic, the prevailing view is that the UNCLOS is a sufficient framework for the Arctic Ocean. This view has been cemented by the Arctic Ocean coastal states, Canada, Denmark/Greenland,

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Norway, Russia, and the USA — the Arctic Five — in their Ilulissat declaration of 2008. The UNCLOS ensures the Arctic states a 12 nm territorial sea outside their baselines. Within this area the coastal states have extensive regulatory powers including absolute rights over fish and seabed resources. Between 12 and 200 nm the coastal states have fewer rights but are entitled to jurisdiction over the area. Within this zone the coastal states also own the seabed resources in the continental shelf and can establish an exclusive economic zone (EEZ) where the ownership of all living marine resources is granted to the state.1 Beyond 200 nm the coastal states may, in accordance with the criteria in UNCLOS Article 76, be entitled to an extended continental shelf. At the same time, the coastal states are not entitled exclusive rights over the living resources in the sea column above this extended shelf, as the sea beyond 200 nm has status as high seas or international waters. If the coastal state is entitled to a continental shelf beyond 200 nm, it has the right to exploit resources from it. At the same time, a special set of rules applies to the utilization of resources on the extended continental shelves including the duty to pay taxes to the International Seabed Authority (ISA). ‘Payments and contributions are to be made annually by the Outer Continental Shelf (OCS) State at the rate of 1% on the value or volume of all production, commencing on the sixth year of production, increasing by 1% per year until the rate reaches 7% on by the 12th year, and thereafter remaining at 7%’.2 The ocean floor beyond the extended continental 1

Byers, 2013, p. 6. ISA, 2010, ‘Non-Living Resources of the Continental Shelf Beyond 200 nautical miles: Speculations on the Implementation of Article 82 of the United Nations Convention on the Law of the Sea’, (Kingston, Jamaica, ISA) International Seabed Authority Technical Study No. 5, p. X. Also available at http://www.isa. org.jm/files/documents/EN/Pubs/TechStudy5.pdf (accessed on August 4, 2014). 2

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shelves is called ‘the Area’. The resources of the Area are considered a common heritage of mankind, and are managed by the ISA, an intergovernmental organization established by the UNCLOS.3 As living organisms easily move across different states’ EEZ, as well as between the EEZ and the high seas and back, the UNCLOS alone is not a sufficient framework in the practical regulation of migrating maritime species. As no coastal states have jurisdiction, nor exclusive ownership of living resources beyond 200 nm, the need for regulating stocks which straddle across more than one state’s EEZ and in the high seas has been recognized. Similarly the ‘free rider’ problem has also been acknowledged — if some coastal states pose strict regulations on a fish stock within their EEZ, while all other states can fish the same stock just outside the 200 nm line, the UNCLOS alone proves to be an inadequate regime for managing high-seas fisheries.4 The most important regulatory measure specifically addressing the migratory nature of fish stocks came with the 1995 UN Fish Stocks Agreement. The agreement is a part of the UNCLOS but did not enter into force before December 11, 2001. The Fish Stocks Agreement ‘sets out principles for the conservation and management of [straddling and highly migratory] fish stocks and establishes that such management must be based on the precautionary approach and the best available scientific information’.5 The agreement also put forward the fundamental principle ‘that States should cooperate to ensure conservation and promote the objective of the optimum 3

Ibid., p. IX–X. Churchill, 1999, p. 301. 5 UNCLOS, 1998, ‘The United Nations Convention on the Law of the Sea (A historical perspective)’, Essay originally prepared for the International Year of the Ocean. Available at http://www.un.org/depts/los/convention_agreements/ convention_historical_perspective.htm (accessed on August 4, 2014). 4

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utilization of fisheries resources both within and beyond the exclusive economic zone’.6 The UNCLOS and the 1995 UN Fish Stocks Agreement also provide the basis for the establishment of regional fisheries management organizations (RFMOs) through which high seas fisheries are to be managed. RFMOs should be open to all states with a real interest in the fishery which is being regulated.

Empirical investigation Case 1: The delimitation of the extended continental shelves The process of delineating the outer parts of the continental shelf in the Arctic Ocean on behalf of the Arctic Five is well underway. Also, the process of delimiting the shelf between the Arctic Five has well begun. As described earlier, the UNCLOS enables all coastal states a continental shelf of 200 nm. Beyond 200 nm a coastal state might also be able to claim an extended continental shelf as long as this area can be viewed as a natural prolongation of that country’s continental shelf in accordance with Article 76 in the Convention. In order to claim an extended shelf the state must submit their claim, based on scientific investigations of the topography of the seafloor and its geology, including the thickness of the sediments. The claims are to be posed to the UN Commission on the Limits of the Continental Shelf (CLCS) within 10 years after the state’s ratification of the UNCLOS. In areas where coastal states might have overlapping claims to the continental shelf, delimitation between the involved states needs to be agreed upon by the states themselves as this is not under the competence of the CLCS. Norway submitted its scientific documentation on its extended continental shelf, and was the first Arctic state to receive approval

6

Ibid.

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from the CLCS in 2009. These claims are final and binding.7 The USA is one of the Arctic Five, but it has not ratified the UNCLOS and is hence not entitled to submit a claim to the CLCS. In December 2001 Russia made a submission to the CLCS. The claim included large parts of the Lomonosov and Medeleev Ridges, as well as the North Pole. However the CLCS demanded additional scientific evidence backing Russia’s claim and Russia has in recent years continued scientific investigation of its extended shelf. According to recent reports, improved documentation will be submitted to the CLCS in the spring of 2015.8 Denmark/Greenland ratified the UNCLOS on November 16, 2004 and is obliged to submit their claim of an extended continental shelf before the same date in 2014. Denmark is expected to include the North Pole in its claim and is expected by several observers to have strong scientific evidence supporting its claim on this symbolic point.9 Canada ratified the UNCLOS in December 2003 and was expected to submit its claim for an extended continental shelf in the Arctic Ocean in December 2013. Nevertheless, according to several reports in the Canadian media, supported by interviews conducted by the author, the claim prepared by Canadian scientists did not originally include the North Pole, and was therefore not ‘accepted’ by Prime Minister Stephen Harper.10 To fulfill the obligations concerning the 10-year deadline after ratification, Canada presented only ‘preliminary information’ concerning the 7

CLCS, 2009, ‘Summary of the Recommendations of the Commission on the Limits of the Continental Shelf in Regard to the Submission Made by Norway. Available at http://www.un.org/depts/los/clcs_new/submissions_files/nor06/nor_ rec_summ.pdf (accessed on July 21, 2014). 8 Staalesen, 2014. 9 Mazo, 2014, pp. 61–70. 10 Ibid, p. 61.

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outer limits of the continental shelf in the Arctic Ocean. To submit only preliminary information was in accordance with Article 4 of Annex II of the Convention, and with decision SPLOS/183, adopted at the 18th meeting of States Parties to the Convention.11 Yet, the possibility of submitting only preliminary information was an arrangement intended for developing states, even though no explicit prohibition has been given for developed states to use this opportunity. While the Canadian government partly argues that Canada selected this option due to great workload and insufficient scientific data from the Arctic Ocean sea floor, it seems more than likely that the decision was politically motivated, to enable the government to potentially ‘improve’ the data in accordance with Canadian interests. Foreign Affairs Minister John Baird spoke on the issue on the Canadian Broadcasting Corporation on December 9, 2013, explaining Canada’s approach the following way: ‘We have asked our officials and scientists to do additional work and necessary work to ensure that a submission for the full extent of the continental shelf in the Arctic includes Canada’s claim to the North Pole’.12 The following day President Vladimir Putin of Russia, in a TV broadcast, told his minister of defense to ‘devote special attention to deploying infrastructure and military units in the Arctic’ — a statement that was interpreted to be a response to the Canadian action the day before.13 Yet, it remains to be seen if Canada’s final submission, now postponed for several years, will be changed in a way that is not in accordance with objective qualities of the seafloor.

11

Canada, ‘Preliminary Information Concerning the Outer Limits of the Continental Shelf of Canada in the Arctic Ocean’, Submitted to the CLCS, December 6, 2013. 12 CBC News, 2013, ‘Canada’s Claim to Arctic Riches Includes the North Pole’. Available at http://www.cbc.ca/news/politics/canada-s-claim-to-arctic-richesincludes-the-north-pole-1.2456773 (accessed on July 21, 2014). 13 Mazo, 2014, p. 61.

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Case 2: The management of living resources in the high seas of the Arctic Ocean Today living resources in the high seas of the Arctic Ocean are not regulated. The lack of regulation has been recognized among politicians, scientists, and environmental organizations, and in the last few years the Arctic Five have met regularly in order to discuss the potential future management of this ocean.14 With the USA as the driving force, political meetings as well as meetings with Arctic fisheries experts have been arranged since 2010. In accordance with its leading role on this topic, stemming from the initiatives from the Alaskan Senators Ted Stevens and Lisa Murkowski, the USA has even signed into law an obligation to ‘initiate international discussions and take necessary steps with other Nations to negotiate an agreement for managing migratory and trans-boundary fish stocks in the Arctic Ocean’.15 Today no one knows for sure how many fish potentially exist in the central parts of the Arctic Ocean, not to mention what is likely to be the case in years to come. Estimates assume that no stocks of commercial interest currently exist, with the potential exception of the polar cod.16 But as the ice cover is shrinking due to global warming, the conditions for maritime life in the ocean are also in flux. So far the Arctic Five have agreed on most issues pertaining to a potential management arrangement of the high seas of the Arctic Ocean, and with the meeting in Nuuk, February 24–26, 2014 a consensus was reached that ‘there is no need at present to develop any additional RFMOs or arrangement for this area’.17 14

Hoel, 2014. US Senate, 2008, ‘S.J.Res. 17 (110th)’. Available at https://www.govtrack.us/ congress/bills/110/sjres17/text (accessed on July 21, 2014). 16 Hollowed et al., 2013, pp. 355–370. 17 Naalakkersuisut, ‘Chaiman’s Statement (2014): Meeting on Arctic Fisheries Nuuk, Greenland, February 24–26’. Available at http://naalakkersuisut.gl/en/ Naalakkersuisut/Press-Statements/2014/02/Arktisk-hoejsoefiskeri (accessed on August 4, 2014). 15

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Yet, while there is not much disagreement on the urgency of establishing a potential management organization concerning the high seas of the Arctic Ocean, disagreements exist with respect to who should be entitled to decide the future of this remote ocean, as well as when or where to potentially open fisheries if deemed sustainable. On the one hand, one finds the remaining three Arctic states, Finland, Iceland, and Sweden, all displaying dissatisfaction with the group of the Arctic Five meeting at the cost of the Arctic 8 — the entire group of Arctic States. Iceland in particular has expressed great dissatisfaction with being excluded. On the other hand one also finds the EU, and in particular the European Parliament, voicing opinions on the issue, arguing for areas of permanent preservation in the central parts of the Arctic Ocean, especially in the areas around the North Pole.18 These opinions are not shared by the Arctic Five. As the five Arctic coastal states found it appropriate to lead the process on the future management of the living resources of the Arctic Ocean, the opinions of other engaged actors have only been considered to a lesser extent.19 Finally, as the high seas of the Arctic Ocean might also be of interest to other high seas fishing nations such as China, Japan, and South Korea, these are other stakeholders that potentially could have an interest in voicing their opinions in the Arctic Five meetings. According to the Chairman’s statements from the Nuuk meeting in 2014, the engagement of non-Arctic Five actors is likely to happen soon.20

18

European Parliament, 2014, ‘Resolution of 12 March 2014 on the EU Strategy for the Arctic (2013/2595(RSP))’. Available at http://www.europarl.europa.eu/ sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2014-0236+0+DOC+XML+ V0//EN (accessed on August 4, 2014). 19 Naalakkersuisut, 2014, ‘Chaiman’s Statement (2014): Meeting on Arctic Fisheries Nuuk, Greenland, February 24–26’. Available at http://naalakkersuisut. gl/en/Naalakkersuisut/Press-Statements/2014/02/Arktisk-hoejsoefiskeri (accessed on August 4, 2014). 20 Ibid.

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Discussion and implications for Asia In this article I ask if ‘politics matter’ in the processes of establishing the ownership of the extended continental shelves in the Arctic Ocean as well as in the process of potentially establishing a management system of the living resources in the high seas of this northernmost ocean in the world. The investigation uncovers a mixed picture where international law, geography and natural sciences, as well as political opportunism and entrepreneurship seem to have played a role. With respect to the process of establishing the outer limits of the continental shelf it is particularly in the symbolic area around the North Pole, where ‘politics’ may have played out at the cost of ‘strict’ science and law. In this respect both Russia’s early submission of 2001 as well as the Canadian decision to only submit preliminary information on its extended continental shelf to the CLCS, indicate that political considerations might have overruled science and the strict interpretation of international law. Also in the process toward regulating the living resources of the High Seas of the Arctic Ocean, political entrepreneurship and tactics seems to have played a significant role with respect to deciding who the legitimate actors are. Additionally one can identify that geography appears to matter profoundly in establishing legitimacy for the leadership of some actors in the process. By grasping the initiative, the Arctic Five have been in the position to make key decisions, regardless of concerns by other actors such as the EU. While the UN Fish Stocks Agreement emphasizes that ‘states should cooperate to ensure conservation and promote the objective of the optimum utilization of fisheries resources both within and beyond the exclusive economic zone’ and that a potential RFMO should be open to ‘all states with an interest in the fishery concerned’, the Arctic Five has indeed used their favorable geographic position in combination with their general

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powerful position in international relations to take the lead, in spite of some critical responses from other states such as Iceland or the EU.21 When asking what the implications are for the Asian states, one aspect certainly concerns their right to utilize potential resources in the high seas, as well as resources in the deep sea beds of the Central Arctic Ocean. If these processes are left to the Arctic Five to decide alone one could be concerned about the rights and interest of the non-Arctic Five countries. However, as the relevant nonArctic Five actors are likely to be engaged in the management process on living resources very soon, and as there is no evidence that the Arctic Five will not follow final recommendations from the CLCS, an equally important aspect is probably the Arctic region’s function as a model for how disputes are managed and solved where overlapping political interests are handled in a peaceful way. If the Arctic states as well as the EU are able to sort out their differences, this might serve as an example to follow in resembling conflicts in East Asia, including conflicts in the South and East China Seas. References Byers, M., 2013, International Law and the Arctic, Cambridge: Cambridge University Press. Churchill, R., 1999, ‘The Law of the Sea (3rd edition), Manchester: Manchester University Press / Juris Publishing.

21

Churchill, 1999; UNCLOS, 1998, ‘The United Nations Convention on the Law of the Sea (A historical perspective)’, Essay originally prepared for the International Year of the Ocean. Available at http://www.un.org/depts/los/ convention_agreements/convention_historical_perspective.htm, 2014/1998; Naalakkersuisut, 2014, ‘Consensus Among the Five Arctic Coastal States to Protect the Central Arctic Ocean Against Unregulated Fishery’. Available at http://naalakkersuisut.gl/en/Naalakkersuisut/Press-Statements/2014/02/Arktiskhoejsoefiskeri (accessed on August 4, 2014); Wegge, 2015.

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Hoel, A.H., 2014, ‘Fish, Fisheries and Fisheries Management in the Arctic Ocean’, Barents Observer, March 11, 2014. Available at http://barentsobserver. com/en/opinion/2014/03/fish-fisheries-and-fisheries-management-arcticocean-11-03 (accessed on July 21, 2014). Hollowed, A., Planque, B. and Loeng, H., 2013, ‘Potential Movement of Fish and Shellfish Stocks from the Sub-Arctic to the Arctic Ocean’, Fisheries Oceanography, 22(5), pp. 355–370. Mazo, J., 2014, ‘Who Owns the North Pole?’, Survival, 56(1), pp. 61–70. Staalesen, A., 2014, ‘Putin Readies Arctic Territorial Claims’, Barents Observer, April 7, 2014. Available at http://barentsobserver.com/en/arctic/2014/04/ putin-readies-arctic-territorial-claims-07-04 (accessed on July 21, 2014). Wegge, N., 2015, ‘The Emerging Politics of the Arctic Ocean: Future Management of the Living Marine Resources’, Marine Policy, 51, pp. 331–338.

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Chapter 9

Arctic Mining: Asian Interests and Opportunities Iselin Stensdal

Mining is today a global industry, in terms of locations, trade, and output value. In 2012 mining products, including iron and steel was the fifth largest valued merchandize traded, making up 7% of the world’s trade.1 The unevenness of mineral endowments from country to country in combination of different mineral-consumption patterns and scarcity of minerals vital to modern life, makes mining and mineral-trade flows worth keeping an eye on. The three Asian countries China, Japan, and South Korea are among the world’s largest economies, and also among the largest mineral consumers. More than 30 different minerals are extracted in the Arctic region, such as copper, gold, nickel, and zinc, which all are imported to the Asian countries in substantial amounts. Ostensibly there should be many areas with overlap between the two areas’ supply and demand. As of 2014 however, the Arctic region makes up a minuscule part of the Asian countries’ outward foreign direct investments (FDI) in mineral industries. Where does Asian demand overlap with Arctic production 1

WTO, 2013, International Trade Statistics 2013, Geneva: WTO, p. 59. Also available at http://www.wto.org/english/res_e/statis_e/its2013_e/its13_toc_e.htm (accessed on July 7, 2014).

155

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of minerals? Are there Asian interests for Arctic mining? Given the small share Arctic mineral extracting projects make-up of the Asian countries’ FDIs, which factors may influence future opportunities? By minerals I refer to mineral raw materials, excluding oil and gas, restricting this survey to extraction and not further processing. Demand: Asian mineral import and FDIs Asia is here limited to China, Japan, and South Korea. There are considerable differences between the mineral endowments of these countries. China is a top-producing country of many important minerals, such as aluminum, iron and steel, lead, rare-earth elements (REEs), tin, and zinc. Japan and South Korea’s mineral productions are much smaller. Japan produces some dolomite and silica, while South Korea produces significant amounts of lead, silver, and zinc. In common though, there is the need to import minerals as the countries’ consumptions exceeds domestic productions. In terms of output value, production of transportation vehicles and machines or electronic devices is among the largest industries for all three countries, all industries which require minerals in their productions. However, there are also differences — rail- and aircraft-production is large in China whereas automobile production is an important industry in Japan and South Korea. China’s mining industry is in itself important to the economy, along with chemical and textile production. Given the fairly similar industry- and export-products, one could anticipate that the countries also are interested in securing access to the same minerals. China imported in 2011 more than 40% of its consumed chromium, cobalt, copper, iron ore, manganese, nickel, platinum group metals (PGMs), and potash. Being the second largest steel-manufacturing after China, bauxite, copper, and iron ore are the top-three imports for Japan. Japan also imported most of its consumed gold, silver and zinc in 2011. In the same year South Korea imported copper, iron ore, manganese, and tin. There are some variations in the imports, but important to all three countries are imports of copper, iron ore, molybdenum, nickel, REEs, tin,

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and zinc. Not all minerals are equally important for the three countries and companies in the countries; for example, South Korea is the only country which considers uranium as a strategic mineral. Korean Daewoo owns a minor part of a joint-venture holding the Kiggavik uranium project in Arctic Canada. Several minerals, like iron ore are extracted in many places all over the world. Other minerals are produced in a few locations, like nepheline syenite, produced almost exclusively in Arctic Norway and Russia. China produces about 95% of the world’s REEs. The 17 minerals making up the group of REEs are for example used in hi-tech equipment and green technologies. South Korea imports 100% of its consumed REE, and Japan also imports most of its needed REE. That there are no or few known substitutes for these minerals, adds to the scarcity of REEs.2 In order to secure supply of the minerals in demand, the Asian countries have chosen similar strategies. Each country has a designated government entity to manage a national stockpile of chosen minerals. Furthermore, the countries emphasize research and development in the mineral sector to counter future mineral scarcity. The Chinese government has for example worked on restructuring the mineral industry to improve both pollution challenges and domestic supply. The Japanese and Korean governments are focusing on enhancing recycling capabilities. Furthermore, and of importance also to the world markets, are the three countries’ outward FDI. Asian FDIs are both undertaken by state-owned organizations as well as private businesses.3 Korea Resource Corporation (KORES) is state-owned, and through its restructuring in 2008 it envisioned becoming among the world’s top 20 mining companies by 2020. Since 2008 it has made FDIs in the Asia-Pacific region, America, as well as in Africa and Europe, predominantly in copper, but also in gold, iron ore, and zinc 2

Hayes-Labruto et al., 2013, p. 55; USGS, 2013a, 2013b, 2013c. I here define a company to belong to that country where its headquarters are located. 3

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projects. Japan Oil, Gas and Metals National Corporation (JOGMEC), also Japan’s stockpiling agency, is investing abroad, in addition to providing support for Japanese companies investing abroad in production of nationally important minerals. Between 2012 and 2013 Chinese companies reached USD 5.9 billion in outward FDIs in metals. The Asia-Pacific region was the largest recipient of the FDIs.4 The Asian countries’ mineral actors are actively seeking projects outside their own countries. In common, the Asian countries’ companies have invested abroad in companies producing or developing iron ore, nickel, and copper. Gold, lead, silver, and zinc are also minerals Asian companies have invested in recent years. As we shall see, the Arctic region has several minerals to offer which match the need of the Asian countries. Supply: Arctic mineral production The Arctic region5 produces on a global scale, significant amounts of palladium, platinum, cobalt, and nickel.6 Mineral production in 4

Heritage Foundation, 2014, ‘The China Global Investment Tracker’. Available at http://www.heritage.org/research/projects/china-global-investment-tracker-interactive-map (accessed on February 10, 2014); KORES, 2014, ‘Businesses’. Available at http://eng.kores.or.kr/views/cms/eng/bu/bu01.jsp (accessed on February 10, 2014); Wübbeke, 2012(a), pp. 18–22. 5 The Arctic region is here defined as the circumpolar areas of the Canadian territories Nunavut, the Northwest Territories and Yukon, Denmark’s Greenland, the Finnish the regions of Lapland and Northern Ostrobothnia, Norway’s counties Finnmark, Nordland, and Troms as well as territory of Svalbard, the Russian Arkhangelsk, and Murmansk Oblasts, the Republic of Karelia and Komi and Nenetsia Autonomous Territory (Northwest Federal District), the Autonomous Territories of Khantia-Mansia (Yurga) and Yamalia (Ural Federal District), the Taimyr and Evenk Okrugs of the Krasnoyarsk Krai (Siberian Federal District), as well as Chukotka Autonomous Territory, Kamchatka Krai, Magadan Oblast and the Sakha (Yakutia) Republic (Far East Federal District), Sweden’s counties Norrbotten and Västerbotten and the state of Alaska in the case of USA. Iceland and the Faroe Islands are here excluded, due to very slim mineral production there. 6 Lindholt, 2006, p. 30.

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the Arctic region has a long history, reaching back to the 1600s. Today there are large varieties between the different Arctic regions’ mining circumstances. The Scandinavian Arctic and the northwestern part of Russia are mature regions by virtue of mining operations being integrated into the larger economy, as well as having well-established electricity and infrastructure access. Frontier regions on the other hand, like Alaska, the Canadian Arctic, Greenland, and Russia’s Siberia are characterized by development of new mining projects, often in remote areas with limited connecting infrastructure.7 The mineral endowments in the Arctic region also vary considerably; from the Russian Arctic which is most wellendowed with a global-scale production, to the Norwegian Arctic with the comparatively lowest mineral production. How important the mining industry is to the local Arctic economy varies from almost 20% of regional gross product in the Canadian Arctic to 0.5% in the Norwegian Arctic. Though small in a national economic context, the Canadian Northwest Territories diamond production is a cornerstone of the territory’s economy. On Greenland, a largescale mining project could be of great importance to the economy. In the Russian Arctic, the mineral production’s value is dwarfed by the output from the oil and gas-industry.8 The industry structures of mineral production also varies between the Arctic jurisdictions from hundreds of private companies in Alaska to the dominance of two large companies in the Swedish Arctic, one of which is stateowned. The most commonly extracted minerals in the Arctic region are copper, gold, lead, silver, and zinc. Incidentally, these are all in Asian demand. Copper is widely produced in the Arctic, in Alaska, the Canadian, Finnish, Russian and Swedish Arctic. In addition to existing production, advanced exploration projects for copper are 7 8

Haley et al., 2011, pp. 18–30. Glomsrød et al., 2009, pp. 37–66.

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found in Alaska, the Canadian and Norwegian Arctic. Gold is extracted in all of the Arctic jurisdictions in this survey except on Greenland and Norway, and there are also exploration projects for gold in all jurisdictions. Moreover, there was a limited gold production earlier in the 2000s on Greenland. Gold makes up more than 40% of the total mineral production’s economic output in Alaska. Iron ore is produced in the Norwegian, Russian and Swedish Arctic; Sweden produces more than 90% of the iron ore in the EU, all production occurs in the Arctic part of the country. The iron ore project on Baffin Island in Nunavut is one of the most advanced development projects in the Canadian Arctic, and on Greenland, London Mining’s Isua iron ore project may start production in the coming years. Nickel production is predominantly Russian. The MMC Norilsk Nickel Group is the world’s largest producer of nickel with a global production share of 20%. There are also nickelexploration activities in the Canadian and Finnish Arctic. Also for palladium and other PGMs, the Russian Arctic is the go-to-place. Again, the MMC Norilsk Nickel Group is also the world’s largest palladium producer, and among the top-platinum producing companies worldwide. PGMs are also extracted in the Finnish Arctic, where there also are exploration projects for PGMs underway. As for REEs, there is no production yet, but several exploration projects in Alaska, the Canadian, Finnish, and Russian Arctic. Silver on the other hand, is widely produced in the Arctic, often in combination with other minerals such as gold. Silver mines can be found in Alaska, the Canadian, Finnish, Russian and Swedish Arctic. Zinc is extracted in Alaska, the Canadian, Finnish, and Swedish Arctic. Alaska is home to one of the world’s largest zinc mines, both in terms of output and reserves, the Red Dog zinc and lead mine.9 In short, there are certainly overlaps between what Asian countries need, have deemed of interest and import and what exist 9

Athey et al., 2013; Stensdal, 2016.

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of productions and opportunities in new developing projects in the Arctic of minerals the Asian countries need and Asian companies have invested in abroad before. Is there an Asian interest for mining in the Arctic? How can we determine ‘interest’ for minerals extracted in the Arctic? For the purpose of this chapter we can understand interest on a three-level hierarchal scale, as described in Table 1. Table 1. Typology of Asian interests for minerals produced in the Arctic. Types of interest Non-interest/ unawareness Passive interest Active interest

Manifested through No contact, no attention to or no knowledge of developments Taking note of news, following from a distance, buying futures at exchanges Buying directly from Arctic seller, signing Memorandum of Understandings with Arctic partners, obtaining exploration licenses in the Arctic, funding projects, buying assets in the Arctic, entering joint ventures with assets in the Arctic

So far the active Asian interest according to this scale is limited. Some assets have been bought: in 2011 China National Bluestar bought Elkem, a world-leading company for production of solargrade silicon and special alloys for the foundry industry. As part of the acquisition was a quartzite mine in Finnmark, Arctic Norway.10 Since 2009, the Japanese Sumitomo Metal Mining Company Ltd. and Sumitomo Corporation have owned and operated the Pogo gold mine in Alaska’s Eastern Interior area. In the Kiggavik uranium project in Canada’s Nunavut Korean DAEWOO Corporation owns,

10

Elkem, 2011, ‘Orkla sells Elkem to China National Bluestar’. Available at https://www.elkem.com/en/news/item/Orkla-sells-Elkem-to-China-NationalBluestar/ (accessed on October 29, 2013).

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as mentioned, 1.7% of the joint venture.11 China Investment Corporation, China’s sovereign wealth fund, bought in May 2012 a 5% stake in the Russian Polyus Gold. The company’s operations are largely outside Arctic Russia, but it has one development project in Magadan Oblast. There, the Natalka project has proven and probable gold reserves of 31.6 million ounces.12 Of licenses, the China-based China-Nordic Mining Company Ltd. has an exploration license on Greenland at Carlsberg Fjord in East Greenland valid until 2016.13 One example of Asian buyers buying from Arctic sellers is the Russian Polymetal’s extracted gold from the Arctic Mayskoye deposit. The gold was in 2013 sold through contracts with Chinese buyers.14 As for investments, the junior development company, London Mining, has discussed with Chinese investors to its Isua iron project near Nuuk, Greenland. The company negotiated with Sichuan Xinye Mining Investment Co. between 2011 and 2012, but no deal was reached.15 China Development Bank has since shown interest in funding the project, but as of September 2014 there were no written agreement or signed consolidated deal on the project.16 In May 2014 Australian Ironbark Zinc signed a Memorandum of 11

AREVA, 2013, ‘Kiggavik Project’, http://us.areva.com/EN/home-992/arevaresources-canada-kiggavik-project.html (accessed on December 6, 2013). 12 Belton, 2012; Polyus, 2012, ‘Development projects’. Available at http://www. polyusgold.com/operations/development_projects/ (accessed February 18, 2014). 13 BMP, 2014, ‘List of Mineral and Petroleum Licences in Greenland. September 16, 2014’. Available at http://bmp.gl/images/stories/minerals/list_of_licences/ list_of_licences.pdf (accessed on September 17, 2014). 14 Polymetal Int. PLC, 2013, ‘Mayskoye. Overview’. Available at http://www. polymetalinternational.com/operations-landing/mayskoye/overview.aspx?sc_ lang=en (accessed on December 10, 2013). 15 Caixin, 2013, ‘China’s Arctic Mining Adventure Left Out in the Cold’. Available at http://english.caixin.com/2013-11-26/100609820.html, November 26, 2013, (accessed on February 20, 2014). 16 NRK, 2013, ‘Wishes for Chinese to Greenland’. Available at http://www.nrk. no/verden/onsker-kinesere-til-gronland-1.10947614, March 14, 2013 (accessed on September 18, 2013), in Norwegian.

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Understanding with China Non-Ferrous Metal Company’s Foreign Engineering and Construction (CNF) on the Citronen zinc project in Northern Greenland. The Memorandum of Understanding states that CNF will design, construct and operate the mine, obtain 70% of the needed funding, have ‘futures option, and has the option of buying up to 19.9% of the project at a later stage.17 As of September 2014, Ironbark only holds an exclusive exploration license, however, and has yet to obtain the necessary exploitation license for production. All in all, the Asian active interest for the Arctic is minimal compared to the investments and active interests elsewhere. The Asian share of all mineral investments in the Arctic region is miniscule. Greenland is the Arctic location on which Asian interest has gained most attention. Given that commodities markets are global, it is plausible that the Asian passive interest for the Arctic is larger than the active interest. However, due to the nature of passive interest, it is harder to discern. One indication that Asian actors are keener to follow the Arctic mining industry is the increased Asian media coverage of the Arctic. Because of the Asian countries’ position as large mineral consumers and importers, in combination with the Arctic gaining more worldwide attention as a resource-rich region, one can assume that more active Asian interest for the Arctic mineral extractive industries is likely in the future. There are several factors that can impact on future opportunities for Asian actors’ active interest. Factors influencing future opportunities The most decisive factor for potential Arctic active interest is raw mineral prices. The price of a given mineral on the world market 17

Arctic Journal, 2014, ‘Ironbark Zinc in new partnership with China’s NFC to progress Citronen’. Available at http://arcticjournal.com/press-releases/557/ironbark-zinc-new-partnership-chinas-nfc-progress-citronen (accessed on May 10, 2014).

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determines the feasibility of Arctic production and supply to the market. Over the last decade some minerals’ prices have risen, such as iron ore, largely stemming from Asian demand growth. Such price increases can make Arctic mineral projects economic viable or production more attractive. Production costs in the Arctic can be heightened because of the harsh climatic conditions there. Some areas in the Arctic are well connected to the region’s infrastructure. Other areas might have rich deposits in the ground, but are in remote locations and a potential new project would also need to spend funds on building the needed logistic-system to support manpower and transport of the minerals. Transportation costs vary from location to location, but should Arctic sea routes become commercially viable, it would likely enhance prospects for further mineral extraction where sea routes could be put to use. Furthermore, the transaction costs of dealing with the local government and complying with local regulations can be of importance to new projects. Generally, the Arctic governments are well-esteemed among the mining businesses themselves. Another transaction cost for the mineral producers is gaining the social acceptance in the local community. On this aspect there is so far mixed experiences in the Arctic. Both in Alaska and Fennoscandia are there examples of how local Arctic communities and also environmentalists not located in the Arctic oppose new mining projects. On Greenland however, the situation might be different, being in need of new capital to develop the island’s economy. The local government’s mining agency is actively seeking foreign partners to start mineral production on Greenland.18 Another factor which can influence future opportunities is strategic actions. Sometimes companies chose to enter a market 18

Fraiser Insititue, 2013, ‘Survey of Mining Companies 2012/2013’, Fraiser Institute Annual Survey, (Vancouver, the Fraiser Institute), pp. 11–12; Heikkinen et al., 2013, pp. 1–13.

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which in a short-term perspective does not return profits. Such positioning can be a longer-term strategy. For governments, actions towards mineral extraction can be strategic in several ways. In all of the Arctic strategy documents the Arctic countries have published except the US one, mineral extraction is listed as an important industry for the future economic development of their respective Arctic jurisdictions. Mineral extraction can be strategic in another respect. Some minerals are crucial to a country’s economy. The Asian economies’ industries are for example dependent on mineral resources in the production. Minerals can also for example be vital to defense machinery and the like. Both the USA and the European Union (EU), and also other countries have complied lists of strategic or critical minerals which are of great national importance. Adding to this situation is the uncertainty of how large reserves and amounts of different minerals exist. A lack of accurate knowledge about the total amounts of minerals available, makes it more difficult to plan ahead to secure access of wanted minerals. Consequently, many governments have taken strategic actions to hedge against the risk of future supply shortages. Actions include increased mapping and exploration domestically, stockpiling, increased research, and development on mining, focus on recycling and contracts to secure supply from abroad. There are overlaps between which minerals are considered important by Asian governments and what is produced in the Arctic. REEs provide a recent example of how many governments are seeking to diversify and secure supply of minerals of national importance.19 The factors influencing opportunities can be either drivers or barriers, depending on the circumstances. The Arctic governments’ decisions are one example: they can both facilitate FDI such as the Greenlandic solicitation for investment, and constrict foreign involvement in the extractive industries. Further 19

Stensdal, 2016; Wübbeke, 2012(b).

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complicating the picture is that mining actors are a mix of private businesses, governmentally-owned enterprises, local communities, and governments. Concluding remarks: More to come? In the global raw minerals markets the three Asian countries are major actors. There are considerable differences among them, but they all import significant amounts of minerals which is also extracted in the Arctic region. Nevertheless, the correspondence between Asian demand and Arctic supply has so far not been sufficient for Asian mining actors to take an active interest in the Arctic on a large scale. Assuming that Asian companies in the future will increase their active interest for Arctic mining, factors such as world-market mineral prices and transportation costs will be important. Which minerals are in need will also be of importance. As such, the Arctic region offers dozens of minerals in production and minerals in deposits which can be explored. Handled correctly, future developments can benefit local communities, the Arctic countries, and Asian actors. References Athey, J., Harbo, L., Lasley, P. and Freeman, L., 2013, ‘Alaska’s Mineral Industry, 2012’, Alaska Division of Geological and Geophysical Surveys Special Report, (Anchorage, Alaska Division of Geological and Geophysical Surveys). Belton, C., 2012, ‘Polyus Sells 5% Stake to China Fund Unit’, Financial Times, May 1, 2012. Available at http://www.ft.com/intl/cms/s/0/7fb6361c-93ab11e1-baf0-00144feab49a.html#axzz2vrCzVeAi (accessed on May 14, 2014). Glomsrød, S., Mäenpää, I., Lindholt, L., McDonald, H. and Goldsmith, S., 2009, ‘Arctic Economies Within the Arctic Nations’, in Glomsrød, S. and Aslaksen, I. (eds.), The Economy of the North 2008, Oslo: Statistics Norway, pp. 37–66. Haley, S., Szymoniak, N., Klick, M., Crow, A. and Schwoerer, T., 2011, ‘Social Indicators for Arctic Mining’, ISER Working Paper, (Anchorage, University of Alaska Anchorage).

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Hayes-Labruto, L., Schillebeeckx, S., Workman, M. and Shah, N., 2013, ‘Contrasting Perspectives on China’s Rare Earths Policies: Reframing the Debate Through a Stakeholder Lens’, Energy Policy, 63, pp. 55–68. Heikkinen, H., Hannu, I., Lépy, E., Sarkki, S. and Komu, T., 2013, ‘Challenges in Acquiring a Social Licence to Mine in the Globalising Arctic’, Polar Record, First View, pp. 1–13. Stensdal, I., 2016, Mining the Arctic: Status Quo, forthcoming. USGS, 2013a, ‘Minerals Yearbook, JAPAN’. Available at http://minerals.usgs. gov/minerals/pubs/country/2011/myb3-2011-ja.pdf (accessed on February 10, 2014). USGS, 2013b, ‘2011 Minerals Yearbook, REPUBLIC OF KOREA’. Available at http://minerals.usgs.gov/minerals/pubs/country/2011/myb3-2011-ks.pdf (accessed on February 10, 2014). USGS, 2013c, ‘Minerals Yearbook, CHINA’. Available at http://minerals.usgs. gov/minerals/pubs/country/2012/myb3-2012-ch.pdf (accessed on February 10, 2014). Wübbeke, J., 2012(a), ‘China’s Mineral and Metals Industry: On the Path towards Sustainable Development?’, Pacific News, 38, July/August, pp. 18–21. Wübbeke, J., 2012(b) ‘Three Worlds of Natural Resources and Power’, in Fels, E., Kremer, J.-F. and Kronenberg, K. (eds.), Power in the 21st Century: International Security and International Political Economy in a Changing World, Berlin: Springer-Verlag, pp. 97–115.

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Asia in the Arctic

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Chapter 10

Japan’s Arctic Policy Development: From Engagement to a Strategy Fujio Ohnishi

Although Japan had some footprints in the Arctic in the past, its involvement in the Arctic before the millennium can be seen as a period of independent projects rather than a governmental external policy with goals and a strategy. However, the big ice-melt in the Arctic Ocean prompted several governmental ministries to begin making their agendas relevant to the changing Arctic developments.1 By sketching the formulating process of defining the Arctic interests in the ministries, I have argued in a previous study that Japan’s approach to the Arctic region transformed from involvement to engagement.2 However, the previous studies mentioned earlier mainly focused on the policy formulation process before 2013. Since 2013, Japan’s Arctic policy has been undergoing an important transformation. This chapter presents an ongoing process of Japan’s Arctic policy development. In the first section it summarizes the several marked activities up to the 1990s, which can be considered the

1 2

Tonami & Watters, 2012, pp. 93–103. Ohnishi, 2014, pp. 21–23. 171

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period of products of individual projects throughout public and private sectors. The second section examines the period after the millennium in which the Japanese ministries started to take due consideration of Arctic issues. By considering these processes, especially in the period after the millennium, it suggests that Japan’s Arctic policy is developing from engagement to a more coherently coordinated strategy. The period of individual projects: Activities in the Arctic until the 1990s3 The Svalbard Treaty The first marked involvement dates back to the Svalbard Treaty signed in 1920. As one of the 14 high contracting parties to the treaty, Japan holds certain legal rights and obligations, including rights of fishing and hunting in the territories and the territorial waters (Article 2), liberty of access and entry (Article 3), the establishment of an international meteorological station (Article 5), and the same treatment of nationals of the signatory countries as the nationals of Norway, ‘with regard to methods of acquisition, enjoyment and exercise of the right of ownership of property, including mineral rights, in the territories specified in Article 1’ (Article 7). In practice, these rights are difficult to execute unilaterally, but they can be executed in accordance with the relevant Norwegian jurisdiction. Recently, some conflicts have been renewed among signatory parties, as to the interpretation of the Svalbard Treaty’s applicability regarding the exclusive economic zone (EEZ) and continental shelf around Svalbard.4 The Ministry of Foreign Affairs (MoFA) of Japan had not formulated its position toward the treaty; however, present 3

The description in this section is based on the author’s previous article. See, ibid., pp. 22–23. 4 Pedersen, 2011, pp. 120–135.

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and future developments in terms of resource exploitation and shipping in the Arctic will increase the area’s strategic importance for Japan. Arctic research and observation Japan’s second important involvement in the Arctic is in the field of science. Japan has engaged in polar science for more than half a century. This long-standing interest has naturally prompted research in the Arctic. The 1987 Murmansk speech by then Soviet Union President Mikhail Gorbachev changed the political atmosphere of international relations in the Arctic, suggesting, as one of six concrete proposals, the coordination of scientific research in the Arctic, which led to a dramatically increased interest regarding Arctic research. This increased interest resulted in the establishment of the International Arctic Science Committee (IASC), an active and major non-governmental organization promoting Arctic research. The establishment of the IASC, in turn, affected Japanese researchers in natural science. The Japanese government founded in 1973 the National Institute of Polar Research (NIPR), an inter-university research institute, which in turn established the Arctic Environment Research Center (AERC) in 1990. The AERC opened a research station at Ny-Ålesund on Svalbard in 1991, in collaboration with the Norwegian Polar Institute. Joining the IASC from 1991, the NIPR began to engage in a variety of national and international research activities in the Arctic. While the NIPR focused on terrestrial fields of research, the Japan Agency for Marine-Earth Science and Technology (JAMSTEC) began marine research in collaboration with the United States. The JAMSTEC conducted its first research cruise with the oceanographic research vessel Mirai (Future), in 1998. Since then, invaluable observational studies have resulted from more than 10 Arctic expeditions by the JAMSTEC.

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International Northern Sea Route Program (INSROP) A third important involvement in the Arctic was also given impetus by Gorbachev’s proposal regarding the opening of the Northern Sea Route (NSR). ‘To examine all the possibilities of the NSR, an international commercial sea lane, Japan’s then-named Ship and Ocean Foundation (now called the Ocean Policy Research Foundation (OPRF), aided by the Nippon Foundation, in collaboration with partners from Norway and Russia, carried out the International Northern Sea Route Program (INSROP) from 1993 to 1999’.5 The INSROP was an international project of close collaboration among the partner countries, with 390 participating researchers from 14 countries ‘pursuing the multidisciplinary study of the NSR’.6 Phase 1 of INSROP was carried out from 1993 to 1995, and phase 2 from 1997 to 1998.7 In connection with the INSROP, an experimental voyage via the NSR was performed with the Kandalaksha, a Russian ice-breaking cargo vessel, from Yokohama, Japan to Kirkenes, Norway. During the trip, an on-board research team, composed of 18 experts and specialists from Japan, Russia, and Canada, made various observations and measurements, affording them a good opportunity to deepen their understanding of natural conditions and ship performance through the NSR.8 In advance of the establishment of the Arctic Regional Hydrographic Commission in 2010, the INSROP pioneered charting of the shipping route in the Arctic. Kalaallit Nunaat Marine Seismic (KANUMAS) project The fourth example of Japan’s involvement in the region can be found in Japan’s participation to the Kalaallit Nunaat Marine 5

OPRF, 2013, ‘Examples of Major Studies and Research and Development Implemented in the Past: INSROP’. Available at https://www.sof.or.jp/en/activities/ index6.php (accessed on July 22, 2014). 6 Ibid. 7 Ibid. 8 Ibid.

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Seismic Project (KANUMAS) from 1990 to 1996. The KANUMAS project was a seismic reconnaissance survey in the northern parts off the eastern and western coasts of Greenland. A governmental oil agency, Japan National Oil Corporation now called Japan Oil, Gas and Metal National Corporation (JOGMEC), joined it as a member of the major oil companies such as BP, Exxon, Shell, Statoil, and Texaco. The carried partner and operator was Nunaoil, Greenland’s national oil company and an active partner in all exploration and exploitation licenses in Greenland. These oil companies hold a preferential exploration position in the areas covered by the seismic surveys.9 This participation contributed further success as described in the next section. The aspects of Arctic policy of Japan after the millennium The impact of climate change on the Arctic and the speed at which the ice has been melting in summer seasons have been repeatedly reported by the media in Japan. An incident that caused some alarm was Russia’s planting of its national flag on the seabed under the North Pole in August 2007. One of Japan’s national newspapers reported the event as the beginning of a ‘resource race’.10 In short, the changing Arctic affected several government ministries, which began looking more carefully and making their agendas relevant to environmental global impacts and to potential economic development in the Arctic region. Ministry of Education, Culture, Sports, Science and Technology (MEXT) The Ministry of Education, Culture, Sports, Science and Technology (MEXT) has taken a primary role for Japan’s Arctic policy since the 9

GEUS, 2005, ‘Exploration History’. Available at http://www.geus.dk/DK/ archive/ghexis/Sider/expl-his.aspx (accessed on July 22, 2014). 10 Komaki & Mizuno, 2007.

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1990s. Although it is not necessary to distinguish MEXT’s works in the 1990s with those a decade later, a demarcation between these two periods might be seen in the establishment of the Earth Observation Facilitation Committee in February 2005. Under this committee, the Working Group of Arctic Research Examination was appointed to make Arctic research and observation more organizational and effective. In August 2010, the Working Group submitted an interim report suggesting establishment of Consortium for Arctic Environmental Research. The report also urged to facilitate research and observation on impacts of climate change in the Arctic. In February 2011, the Working Group was taken over by a newly established sub-committee under the Earth Observation Facilitation Committee, which is called the sub-committee of Arctic Strategic Research. Based on the suggestions in the interim report, there were the two important developments. Firstly, the Japan Consortium for Arctic Environmental Research was founded as a platform for coordinating the Arctic research activities of Japan in May 2011. Secondly, in the course of a governmental initiative for facilitating green innovation and environmentally friendly technologies, the Earth Observation Facilitation Committee also initiated the Green Network of Excellence in June 2011, under which a five-year Arctic Climate Change Research Project was funded for the period from 2011 to 2015. The NIPR and JAMSTEC were approved as the managing organizations of the project. Ministry of Foreign Affairs (MoFA) The MoFA is one another ministry which takes a primary role for the Arctic policy. Its first significant agenda was to obtain the observer status within the Arctic Council. In April 2009, Ms. Seiko Hashimoto, Senior Vice Minister of MoFA, formally mentioned Japan’s application to the observer status of the Arctic Council at

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the ministerial meeting of the Antarctic Treaty–Arctic Council Joint Meeting in Washington, DC, US. In July 2009, the MoFA officially submitted its application to the observer status to the Arctic Council. Before and after this application, the MoFA started to arrange intersectional responses within the ministry.11 In September 2010, the MoFA established the Arctic Task Force. In line with its effort toward realization of the observer status, Mr. Shuji Kira, Senior Vice Minister of MoFA, attended a meeting between the Arctic Council’s Swedish Chair and the Council’s observers and ad hoc observers at Stockholm, Sweden in November 2012. For facilitating the Arctic diplomacy, the MoFA appointed Mr. Masuo Nishibayashi, Ambassador of Cultural Exchange, to be concurrently appointed in charge of the Arctic affairs in March 2013. As a result of these efforts, Japan was admitted an observer status of the Arctic Council at the Eighth Ministerial Meeting of the Arctic Council in Kiruna, Sweden in May 2013. In September 2013, Mr. Kunio Toshikata, Ambassador in charge of International Cooperation for Countering Terrorism and International Organized Crime, was appointed to be in charge of Arctic affairs. Ministry of Land, Infrastructure and Transport (MLIT) The Ministry of Land, Infrastructure and Transport (MLIT) has been interested in the idea that commercialization of the NSR will change a pattern of shipping between East Asia and Europe. As an initial step, the MLIT set up a board in order to examine the NSR’s feasibility and logistics for Japanese shipping companies, including ports in the northern part of Japan. Since setting up of the board, the MLIT has been conducting these examinations.12

11 12

Personal interview with MoFA official, February 7, 2014. Personal interview with MLIT official, March 28, 2014.

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One of puzzles for the MLIT was sober attitudes of the Japanese shipping companies, many of which consider the NSR to be of less economic viability, at least for a short term. Without demands from shippers, shipping companies would never take into account of utilization of the NSR. In this sense, a real challenge for the MLIT was general lack of awareness among Japanese shippers about economic potentials in the Arctic. In order to improve this situation, the MLIT established the Public–Private Coordination Meeting in May 2014. Headquarters for Ocean Policy at the Prime Minister’s Office In April 2013, Prime Minister Shinzo Abe held the 10th meeting of the Headquarters for Ocean Policy at the Prime Minister’s Office and decided the Basic Plan on Ocean Policy, in which the Arctic Ocean was focused as one of the key maritime areas. This is the second plan since the Ocean Basic Act was enacted in 2007 but it was the first time that the Arctic Ocean was incorporated as an ocean the government needs to consider. The basic plan, designated goals, and measures had to be taken in relation to activities in the Arctic Ocean. The basic plan notes increase of global awareness on the global impact of climate change in the Arctic Ocean and on validity of sea routes.13 It also notes that in Japan there are expectations for facilitation research and observation and for changes of marine transport such as reduction of transport costs. As the critical issues, the basic plan recognizes security of marine transport, promotion of research and observation, protection of environment, and facilitation of international collaboration and cooperation. The basic plan affirms to take measures in the course of (1) enrichment of scientific 13

Headquarters for Ocean Policy, Basic Plan on Ocean Policy, official document presented at the 10th meeting of the Headquarters for Ocean Policy, the Prime Minister’s Office, Tokyo, April 26, 2013, in Japanese.

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knowledge and (2) wholesome development of maritime industries.14 Under the second basic plan, the Headquarters for Ocean Policy set up an inter-ministerial liaison working group for various issues related to the Arctic Ocean in July 2013. As discussed in the next section, while the second basic plan was not all about the Arctic Ocean, it is the first time for official engagement at the cabinet level and also signifies that Japan’s Arctic policy has entered into a new phase. Ministry of Economy, Trade, and Industry (METI) In the sphere of business, there was a significant success in line with the KANUMAS project. Mainly in order to implement a preferential exploration position held by the JOGMEC, the Greenland Petroleum Exploration Co. Ltd. (GreenPeX) was established by several Japanese leading companies in May 2011.15 JOGMEC announced in February 2012 that it approved equity financing to the GreenPeX (JOGMEC, 2012). These efforts bore fruit when the GreenPeX was successfully awarded exploration licenses at the Unimmak and Nerleq oil fields by the Government of Greenland in December 2013. There is also one another course in the METI’s engagement. While it was not necessarily an Arctic specific attempt, it strengthened its Arctic wing through facilitating exchange of Russian and Japanese business communities. As a first step, the METI set up the Public–Private Coordination Meeting for Promoting Japan–Russia Relationship in order to facilitate bilateral cooperation in October 2013, in which they focused on the Far East and East Siberia. This was one of the results from a joint statement on the Development of 14

Ibid. JOGMEC, 2013, ‘Successful Award of Exploration Licenses offshore Greenland’. Available at http://www.jogmec.go.jp/english/news/release/ news_10_000011.html (accessed on July 22, 2014). 15

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Japanese–Russian Partnership, which was reached at the Japan– Russia summit meeting on April 29, 2013. At the end of the same year, Mr. Toshimitsu Motegi, Minister of METI, visited the Russian Federation. During his visit, Minister Motegi had meetings with Mr. Alexei Ulyukayev, Minister of Economic Development, Mr. Alexander Galushka, Minister for the Development of the Russian Far East, and Mr. Alexander Novak, Minister of Energy, respectively. The main object of his visit was to further advance the projects and other initiatives which were discussed at the Summit Meeting in April 2013.16 In line with this effort, the METI organized the Japan–Russia Investment Forum at Tokyo in March 2014, with 450 Russian business leaders and same number of Japanese. Topics included cooperation in the field of (1) urban environment, (2) automotive industry including its supporting industries, (3) local municipal economic exchange, (4) agricultural business, (5) medical services, (6) the small and medium enterprises, and (7) economic zone and industrial.17 Advancement and prospects of Japan’s Arctic policy In general, external policy means pursuit of goals and actions to achieve them based on national resources. Judging from this definition, observers can find an obvious shift in a mode of Japan’s Arctic policy. Before the Basic Plan on Ocean Policy was decided, ministerial activities were more wide-ranging and active compared to 16

METI, 2013, ‘Minister Motegi Visited Russia’. Available at http://www.meti. go.jp/english/press/2013/1227_01.html (accessed on July 22, 2014). 17 Russian–Japanese Organization for Trade and Investment Promotion, 2014, ‘Preliminary Results of the 6th Japan–Russia Investment Forum’. Available at http://www.jp-ru.org/6forum/kekkagaiyou.pdf (accessed on July 22, 2014), in Japanese.

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those in the 1990s, but rather own-made by each ministry and less coherent as there were no inter-ministerial arrangements in their activities. This situation has changed. As an external policy, Japan’s Arctic policy turned to be better coordinated toward more coherent and strategic instrument under the Basic Plan on Ocean Policy, in which two pillars of Japan’s Arctic policy arguably appeared. The first pillar is reinforcement of Arctic research and observation toward examination of impacts of climate change on the Arctic Ocean. The second is the pursuit of business opportunities for marine industries in the Arctic. The latter practically means to draw benefits from both exploitation of offshore resources and commercial utilization of the NSR. The foundation of those two pillars traces back to the projects up to the 1990s as discussed in the first section. In terms of the second pillar, however, the current scope under the basic plan is limited to marine industries and thus not shedding lights over terrestrial business. In other words, potentials for business development in the Arctic are not fully explored. In order to excavate benefits from potential business opportunities in the Arctic region, the Japanese government needs more comprehensive policy including not only offshore industries but also onshore ones. Considering terrestrial areas within the Arctic Circle, there is a need to correspond, mitigate, and adapt the regional impacts of climate changes, as observed in the 2011 ‘Snow, Water, Ice, and Permafrost in the Arctic’ report.18 Japan’s advanced technologies in the field of cooling earth innovation would be useful to support sustainable development for indigenous societies in the Arctic. In this regard, the current attempts of the METI are expected to be 18

AMAP, 2011, ‘Snow, Water, Ice and Permafrost in the Arctic (SWIPA): Climate Change and the Cryosphere, (Oslo, AMAP), pp. 1–538.

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maintained and to be expanded to include business in the Arctic terrestrial areas. For that purpose, Japan’s Arctic policy needs its own policy full-fledged platform based on the current two pillars of Japan’s Arctic policy. References Komaki, A. and Mizuno, T., 2007, ‘Momentarily’, Ashahi Newspaper, August 22, 2007, in Japanese. Ohnishi, F., 2014, ‘The Process of Formulating Japan’s Arctic Policy: From Involvement to Engagement’, in Hara, K. and Coates, K. (eds.), East Asia– Arctic Relations: Boundary, Security and International Politics, Waterloo: Center for Governance Innovation, pp. 21–31. Pedersen, T., 2011, ‘International Law and Politics in US Policymaking: The United States and the Svalbard Dispute’, Ocean Development and International Law, 42(1–2), pp. 120–135. Tonami, A. and Watters, S., 2012, ‘Japan’s Arctic Policy: The Sum of Many Parts’, in L. Heininen (ed.), Arctic Yearbook 2012, Akureyri: Northern Research Forum, pp. 93–103.

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Chapter 11

India’s Arctic Attention Uttam Sinha

India’s engagement in the Arctic has been part of an enduring commitment to scientific research and technical cooperation in the Polar Regions, starting with the Antarctica in the mid-1950s. Observers often describe India’s approach as a ‘knowledge-power interface’ and a ‘reassuring catalyst for critical post-colonial engagement’.1 India has consistently raised the ‘Antarctica question’ at the UN leading to greater democratization of the Antarctic Treaty System and has articulated strongly albeit with mixed international responses, the ‘common heritage of mankind’.2 India’s policies characterize its broader foreign policy approach as marked by pragmatism as well as cautious idealism. As a rising and visible power, responsibility is an important element of India’s self-image. Its world view is no longer confined to the conventional geopolitical location inherited by the colonial powers or defined by the Western approaches of the Cold War days. India today is constantly reassessing and rethinking its role in the new global 1

Chaturvedi, 2013, pp. 50–69. Press Information Bureau, Government of India, 2007, ‘XXX Antarctic Treaty Consultative Meeting (ATCM) in New Delhi’. Available at http://pib.nic. in/newsite/erelease.aspx?relid=27286 (accessed on July 21, 2014).

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geopolitical space. Both the poles are an important part of that reorientation and a movement towards a ‘global knowledge commons’. In May 2013, China, India, Japan, Singapore, and South Korea, five Asian countries with significant comprehensive power, were admitted as permanent observer members of the Arctic Council. What possible interests could these countries, some of them located near or on the equator, have in the far and away Arctic? This chapter provides a quick preliminary view of the Arctic interest among the Asian countries and then observes, in specific, India’s approach. It makes the argument that the Arctic attention is set to excite the Indian scientific and strategic community both in terms of precautionary policies that the Arctic geophysical changes is prompting and in terms of likely business and commercial opportunities. However, India’s approach given its geography is nuanced differently from the other Asian observer members. Asia and the Arctic The inclusion of the Asian countries as observers is a manifestation of the rising global significance of the Arctic ice melt and the Asian factor in Arctic affairs will become important. There has been intense debate within the Arctic Council on whether or not the countries outside the eight Arctic states should have anything to do with the Arctic. The Arctic policy of the Asian countries is in its early stages but all of them see opportunities in improving their regional and global profile by engaging in the Arctic. The rapid development in the Arctic will further prompt these countries to define and sharpen their foreign policy objectives. The Asian countries objectives will not necessarily converge and will have different orientation. India’s approach, for example, at this early stage of policy formulation has an ecological perspective and the impact of climate change as observed in the Arctic.

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The opening of the Northern Sea Route (NSR) will clearly bring great gains for China, Japan, and South Korea. Further, the growing unrest in Egypt and the volatile situation in West Asia, will make the NSR a viable and stable alternative. The advantage, however, is negligible for India. For the former countries, the route will also link them to the resource rich Northern Russia. China’s energy and mineral resources pass through the Malacca straits and a shorter sea route, like the NSR, will ease its Malacca dilemma. In the coming years, China is likely to step up its export to Europe and beyond via the NSR and, importantly, import natural resources including hydrocarbons from the Arctic region. The development in the Northern region is expected to redefine China–Russia relationship with both emerging as formidable powers in the Arctic. For Singapore, an influential maritime actor, interest in the development of international maritime policy in the Arctic is particularly high. Given its competence in port infrastructure and marine engineering, it would like to take a leap in the development activities up North. Shippers and traders based in Singapore are likely to cash in on the increasing trade between Asia and Europe using the NSR. For Japan, the key drivers of its Arctic policy will be the changing balance of power in the Arctic with the rise of Russia and China and the diversification of its imports through the NSR, particularly fossil fuels and liquefied natural gas (LNG) from Russia. This is significant given that Japan has had to shut its nuclear power plants after the Fukushima accident. A report by Japan Institute for International Affairs has recommended that the Japanese government should set up an Arctic affairs office within the cabinet office to coordinate Japan’s Arctic affairs.3 3

The Japan Institute of International Affairs, 2013, ‘Arctic Governance and Japanese Diplomatic Strategy’, pp. 1–97. Available at http://www2.jiia.or.jp/pdf/ resarch/H24_Arctic/09-arctic_governance.pdf, in Japanese. For a review of the report in English, see http://www2.jiia.or.jp/en/pdf/research/2012_arctic_ governance/002e-executive_summery.pdf (accessed on July 21, 2014).

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India and the Arctic The Arctic is not alien to India. Lokamanya Tilak, a legendary revolutionary and scholar propounded the ‘Arctic home of the Aryans’ in his book The Arctic Home in the Vedas in 1903. Tilak stated that the Aryans originated in the Arctic region, journeyed southwards and later divided into two branches. One branch went to mainland Europe while the other branch came to India. Tilak’s book is a priceless work on Vedic history establishing India’s ancestral connect to the Arctic.4 Later as part of the colonial British Empire, India was party to the 1920-Spitsbergen Treaty, commonly called the Svalbard Treaty that defined Norway’s sovereignty over the Arctic archipelago of Svalbard. However, the attention, intensification, and prioritization have been recent over the rapid geophysical changes in the Arctic. The Arctic is now an important geographical categorization in India’s global policies. It must also be stressed that recent Arctic ascendency in the policy domain stems directly from the strengthening of India’s climate change linked with economic and scientific positions in global world affairs. Polar research in India has been an offshoot of its ocean thinking. For India, the sea and its coastline have been vital. The sea has a great influence on the physical and meteorological conditions and realizing the significance of its vast sea coast, India set up the Department of Ocean Development (DOD) in 1981 with an aim of creating a ‘deeper understanding of the oceanic regime, the development of technology and technological aids for harnessing of resources and understanding of various physical, chemical, and biological processes’.5 Prime Minister Indira Gandhi showed particular interest in scientific and technology endeavors and considered it critical to India’s 4

Sinha, 2013, p. 23. Ministry of Earth Sciences, Government of India, ‘Ministry of Earth Sciences’. Available at http://dod.nic.in/dodhead.htm (accessed on July 21, 2014). 5

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development, global standing and knowledge contribution. Advancement in nuclear and atomic research, space development and subsequently polar research got the necessary political boost and sustained capital flow. The DOD was established as a focal point to promote institutional capability in the ocean areas, where India had little knowledge and scant experience. Also it was reasoned that the complexity of the ocean science would require a broad-based interdisciplinary approach. The DOD thus became the central agency to help proper and speedy ocean development programs and put India in the forefront of nation with domain expertise and to closely cooperate with both developing and developed countries in a ‘spirit of understanding of the concept that the oceans are a common heritage of humankind’.6 One of the programs of the DOD was the ‘Antarctic expedition and Polar science’. The DOD was the nodal center to monitor and study the Antarctica and by 1983 India had set up a permanent research station. India was not the original signatory to the Antarctic Treaty which came into force in 1961 but by virtue of its ‘conducting substantial research activity there’,7 acceded to the Treaty on August 19, 1983 and is entitled to participate in the Consultative Meetings.8 It is also a member of the Scientific Committee on Antarctic Research (SCAR), Standing Committee on Antarctic Logistics (SCALOP), a party of the Convention on Conservation of Antarctic Marine Living Resources (CCAMLR), and is the founder member 6

Ibid. The Antarctic Treaty, Article IX(2), 1959. Available at http://www.ats.aq/documents/ats/treaty_original.pdf (accessed on July 21, 2014). 8 Ministry of Earth Sciences, Government of India, ‘Scientific Research in Antarctica’. Available at http://dod.nic.in/antarc1.html (accessed on July 21, 2014); Ministry of Earth Sciences, Government of India, ‘Ministry of Earth Sciences’. Available at http://dod.nic.in/dodhead.htm (accessed on July 21, 2014). 7

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of the Asian Forum for Polar Sciences.9 India has also been an original votary of the Protocol on Environmental Protection to the Antarctic Treaty, and ratified it in April 1996. Interestingly, the roots of the Indian missions to the Antarctic actually lie in the joint ISRO–Hydrometeorological Center of Russia agreement. The conceptualization of India’s polar approach is interesting. While India’s attachment to the Arctic has been through its racial memory, suggesting the Arctic was the home of the Aryan race, and colonial participation, being part of the British Overseas dominion in the Svalbard Treaty of 1920. The Antarctic, on the other hand, has been a scientific investment — the laboratory of India’s polar research, gradually giving it the capability and capacity to engage in the Arctic. The two poles have now become critical in understanding and deciphering environmental concerns including atmospheric pollution, understanding in forecasting weather patterns and importantly the circulation pattern of the ocean system. Truly, polar science is greatly contributing to the knowledge and understanding of the complex and interlinked global problems. India’s Arctic attention The Arctic for India, as explained, is primarily a destination for scientific research expeditions and understanding that mainstreams science in responsible development of the region — what can be referred to as an ‘ecological’ perspective. But any serious look at the Arctic cannot ignore the fact that because of the meltdown the Arctic has given way to an extremely active geopolitical space. An immediate impression is that India’s geoeconomic ascendancy readily converges with the opportunities that the geophysical changes in the Arctic presents. According to the Organization for Economic Cooperation and Development (OECD) report in April 2012, India has passed Japan as the world’s third largest economy in purchasing 9

Ibid.

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power parity (PPP) terms.10 High rate of industrial development causes the strong growth of demand on raw materials in particular hydrocarbons. India’s primary energy use is projected to increase at a sustained rate of 5.8% annually to meet the GDP growth rate of 9% through 2031–2032.11 As forecasted by the International Energy Agency (IEA), India will be the second country after China to stimulate the global demand till 2030 — it will be responsible for 15% growth of global demand for energy and be the third country in the world in the utilities consumption. As a ‘planetary power’, a phrase these days used to describe China and India, in terms of resource need and ecological impact, India might seek partners in the economic development of the Arctic region for its own fast growing economy. However, this cannot be interpreted as redrawing the geoeconomic map of growth and development in the Arctic. India has neither the intention nor the desire or even the wherewithal to do so. At this stage the ecological appreciation is greater in terms of climate change risks and vulnerability than the realpolitik imperatives to explore the opportunities of hydrocarbons explorations in the Arctic. That said, three reasons can be identified for India’s Arctic attention. This is not only because India is now an observer in the Arctic Council and hence having legitimate interest but importantly because India, as an active global player, has normative positions and considered voice in world affairs. The first of these attentions relates to the geopolitical considerations, which is dynamic and changeable and in many sense unique in the Arctic. Each country irrespective of its size or political influence has an impact in the Arctic pertaining to the issue 10

Banerji & Shah, 2012. Planning Commission of India, 2014, ‘Power and Energy’. Available at http:// planningcommission.nic.in/sectors/index.php?sectors=energy (accessed on July 21, 2014). 11

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at stake. Some of these issues are settled multilaterally while others are resolved bilaterally. The Arctic region, with advanced and highly developed countries, simultaneously witnesses clashes of interest and collaborations and where allies can turn adversaries and vice versa. Arctic’s strategic value will only amplify, whether it is resource exploration and extraction or new emerging transport routes. This will, in spite the fact that tensions have remained historically low, create a new set of political disagreement and resultant high politics. The race for resources inevitably leads to shove and push, making the Arctic potentially an area of competition and contestation. On the other hand, opening of shipping routes are likely to foster new cooperation and stimulate regimes and mechanisms. Whether the region experiences competition or cooperation or simultaneously both, India has to be alert to the fluctuating geopolitical changes. The Arctic’s political temperature may heat up in different ways. The immediate reasons could be the discussion on ‘who’ shall extract the oil when the ice thins and possibly disappears? ‘How’ will the new marine delimitation lines be drawn? ‘Who’ will control the new sea passage? And maybe at some stage a bigger question on ‘who’ owns the Arctic will be raised?12 India cannot be oblivious to the debate. Likewise India would need to update and understand the issue of conflicting continental shelf claims as well as the difference in opinion between the USA and Canada on the issue of international waters and internal waters. Russia, one can argue, will be a key player in the Arctic. The attention on Russia for India is important as it is India’s longstanding traditional partner. For India, Russia is a critical player and a counterweight to any ‘balance of power tilting westwards’. Sino-Russian relations and possible changes in Russian foreign policy orientation due to the rise of China will also be important for India in understanding the wider strategic framework 12

Sinha, 2013, p. 23.

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in the Arctic. If Moscow decides to build closer ties with the West as a result of China’s rise, this would counterbalance China’s interest in the Arctic. If, on the other hand, Beijing invests toward closer relationship with Moscow, then this could advance Chinese engagement in the Arctic.13 India will also have to observe closely the other Asian countries Arctic orientation. For example, Beijing has already started somewhat articulating a ‘commons’ position, i.e. no nation has sovereignty over the Arctic and the resources there are for all to exploit and use. The second Arctic attention for India is the legal consideration. It must be remembered that the Arctic Ocean is a semi-enclosed ocean surrounded by land and like all high seas is governed by the United Nations Convention on the Law of the Sea (UNCLOS). The Antarctica, a geographical contrast, is a landmass surrounded by an ocean. UNCLOS which was adopted in 1982 and came into force in 1994, did not envisage a special regime for the Arctic — the Arctic Ocean was no different from any other oceans. However, under Article 234 it gave the Arctic coastal states special regulatory and enforcement rights to reduce and control vessel source marine pollution within the limits of the exclusive economic zone (EEZ). So while there are norms and regulations, differences may emerge on the interpretation of the existing laws because of the geophysical changes in the Arctic. UNCLOS provides the universal regime for all matters relating to ocean affairs and the law of the sea. It serves as the basis for the development of regional and national ocean policies, as well as the development of related regional and international instruments.14 Therefore, for India to be actively 13

Ibid. This emerged from a discussion in the AsiArctic conference on September 23, 2013, at the Institute for Defense Studies and Analyses (IDSA), New Delhi. See IDSA, 2013, ‘The Geopolitics of the Arctic: Commerce, Governance and Policy’. Available at http://www.idsa.in/event/TheGeopoliticsoftheArctic (accessed on July 21, 2014).

14

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involved in the Arctic it is vital to understand what exactly is the legal regime under the Convention and what issues are indeed critical and whether the Convention provides an adequate framework for dealing with those critical issues especially the legal regime that applies for navigation in new shipping routes and those that governs the exploitation of the vast oil and gas resources.15 All Arctic states with the exception of the USA are parties to UNCLOS and all including the USA agree that the legal regime contained in the UNCLOS applies to the Arctic as well. However, while laws exist, they regularly clash with sovereignty. The Arctic too may witness claims and counter-claims before being settled. India with its long polar research experience, active involvement with the law of the sea negotiations for over 50 years, and experience in deep sea exploration is uniquely placed to contribute effectively on several scientific projects management as well as logistics of expeditions. The third Arctic attention for India refers to the resource finds. The Arctic, it is said, holds the largest remaining untapped gas reserves and undeveloped oil reserves. It is dubbed as the final frontier for energy development. Much of these potential reserves lie offshore, in the Arctic’s shallow shelf. One often gets the impression that the Arctic’s oil and gas finds will be the answer to the world’s energy thirst. It is though forgotten that many known reserves are not exploited because of their inaccessibility — short productive period and low temperatures. Any oil and gas development will require building massive infrastructure through areas that are ecologically sensitive. Not surprisingly, Royal Dutch Shell’s exploration and drilling efforts during the summer season of 2012 in the Chukchi Sea fell behind expectations. Likewise, Cairn Energy’s high investments in exploratory wells in Greenland’s coast have made no commercial discovery. 15

Ibid.

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The other resources in the Arctic are the vast minerals. The Arctic region of Russia is probably the most developed and has vast deposits of nickel, copper, coal, gold, uranium, tungsten, and diamonds. According to Part XI of the UNCLOS Convention,16 India is recognized as the first pioneer investor in the survey and evaluation of polymetallic nodules in the Central Indian Ocean outside national jurisdictions. In March 2002, India entered into a 15-year exploration contract with the Authority for exploration for polymetallic nodules in the Central Indian Ocean.17 The Authority has also adopted the Regulations on Prospecting and Exploration for Polymetallic Sulphides in the Area and the Regulations on Prospecting and Exploration for Cobalt-Rich Crusts. This experience India can carry to the Arctic in respect of the exploration and exploitation of the resources of the area beyond the limits of national jurisdiction. It goes without saying that oil and gas extraction in the Arctic is inherently dependent on commercial profitability. With technical difficulties brought about by location challenges, weather hazards and unresolved maritime boundary disputes, the cost of Arctic oil production, according to IEA, will be very high. On the gas front, following a sudden boom in the US domestic shale gas production and with price levels falling rapidly, the natural gas from the High North will not probably be competitive also keeping in fact the difficulties in extraction. There is also strong environmental concerns vis-à-vis the development of Arctic resources. The 1989 Exxon Valdez oil spill in Alaska and the more recent Deepwater Horizon accident in the Gulf of Mexico in 2010 are reminders of the potential hazards and ecological consequences of drilling activities. 16

UNCLOS, Part XI, 1982. Available at http://www.un.org/depts/los/convention_ agreements/texts/unclos/closindxAgree.htm (accessed on July 21, 2014). 17 International Seabed Authority, 2013, ‘Contractors’. Available at http://www. isa.org.jm/en/scientific/exploration/contractors (accessed on July 21, 2014).

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Oil and gas companies operate on profit and it is not yet clear what that profit margin is for the companies to venture dangerously out in the Arctic. The initial euphoria over the oil and gas finds have given way to ground reality to the point that the Arctic new status as the ‘new energy province’ is being questioned. Striking a balance between economic interests and lowering environmental risks will be a challenge but crucial to the resource management and governance. Given the current situation it is unlikely that Arctic will emerge as a major contributor to global energy resources.18 The fourth Arctic attention concerns the sea routes. As expressed earlier, given the various physical difficulties and the global economic downturn, extraction of oil and gas will be low key thus making the Arctic more an active shipping route rather than an oil and gas production zone. With the Arctic meltdown, while new shipping routes will open up, the rights of states for various types of passage (innocent, transit, archipelagic, or free passage) are already set out in UNCLOS. However, practical modalities and implementations have to be worked out. It is in this light that the Polar Code needs to be developed. India has had a credible participatory role in the Antarctic Treaty System and it is reasoned that this could serve as a model for the Arctic too particularly on how cooperation and coordination can be effectively put in practice, both for scientific work and logistics of expeditions. India’s policy in the Arctic In the backdrop of rapid changes — geophysical, geopolitical and geoeconomic — what should be India’s interest and role in the Arctic? To begin with, India has a long record in polar research in the Antarctica. India actively participated, often described as a leading voice in the ‘post-colonial engagement with the Southern Polar 18

Østhagen, 2013.

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Region’, in the democratization of the Antarctic Treaty System. India’s involvement with the Arctic is recent and is likely to be the least contentious. As mentioned, India is now an observer in the Arctic Council but even before this diplomatic formalization, it has had scientific association with the Arctic region. In 2008, India set up a research station, Himadri, in the Svalbard islands and is among the 10 countries that have a research facility. About 40 Indian scientists have worked at the station in the last six years and it is planned to upgrade the station to around the year research. Also as part of a bilateral understanding with Norway, two scientists from the National Centre for Antarctic and Ocean Research (NCAOR), Goa will be pursuing doctoral and investigating at the High North Research Centre for Climate and the Environment (Fram Center) in Tromsø. Studying and monitoring the Arctic is critically important for India. Scientific evidences help in framing climate policies, and forms an important part of India’s climate diplomacy. India may be physically far from the Arctic region; but the impact of the melting ice on global weather system makes it vulnerable to Arctic changes, and thus, these need to be carefully understood and studied further. For example, questions that need further scientific investigation are: What will be the impact of the release of vast amounts of methane gas when the Arctic ice melts? What will be the impact of such a release on the stability of the monsoon system on which billions depend in South and Southeast Asia? While the Arctic for India might seem to be a commitment to scientific research and technical cooperation and not so much on its strategic radar, contemporary developments in the region present some commercial opportunities that cannot be ignored. India will not be a major gainer from the shipping routes or drilling and exploring the Arctic sea. It can, however, contribute human skilled resources for increased economic activities in the Arctic countries. The Indian Navy can also provide assistance in search and rescue as well as pollution control activities. India and Russia

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have long standing naval cooperation some of which is based in Russia’s North. The historical connect and understanding with Russia needs to be upgraded in the Arctic context. Commercially India can also look towards developing its maritime industry due to the boost in Arctic shipping. As economic opportunities develop, India should not be apologetic about incorporating economic wellbeing into its Arctic policy though of course its immediate articulation will be scientific understanding and learning, ecological protection, promoting sustainable use of resources in the Arctic region. Arctic and Asia: A scientific enterprise The climate looms large in discussions on the Arctic and the HimalayaTibet in Asia, where the impact of global warming will have significant ramifications in terms of competition for resources and managing the fragile ecosystem. The Arctic and the Himalaya–Tibet are possibly the most environmentally strategic areas of the world. There are immediate areas of convergence on issues such as resource use, sustainability and global governance both in the Arctic and Himalaya–Tibet. The Arctic is one of the original poles, while Himalaya–Tibet has recently become to be regarded as the ‘Third Pole’. In both places protecting the ecology should be high priority. The ecological footprint in the Arctic is heavy, with emissions accounting for up to 45% of black carbon and 25% of all mercury.19 The glaciers of the Himalaya– Tibetan Plateau contain one of the largest reservoirs of snow and ice outside the polar regions and are a source of many major Asian rivers. Retreating glaciers, melting permafrost and degrading ecosystems with monsoon variability are the consequences of ongoing regional and global climate warming. Consequently, shrinking glaciers will 19

‘New initiatives could improve EU–Arctic Relations’, 2011, ‘Overseas Territory Review’, April 14, 2011. Available at http://overseasreview.blogspot.com/2011/04/ new-initiatives-could-improve-eu-arctic.htm (accessed on July 21, 2014).

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result in the decrease of water runoff in the long-term. In the shortterm earlier water runoff from glaciers when combined with seasonal rains can result in flood conditions. The Arctic and the Himalaya–Tibet, though geographically distant, are interconnected and share similar concerns. Fluctuations in the glaciers of the Himalaya–Tibetan Plateau are the result of environmental changes on a local, regional, and global scale. On the other hand, the melting of the Arctic is likely to result in sea-level rise and alter the stable patterns of ocean currents resulting in unpredictable weather cycles. Scientists reason that the Himalaya– Tibetan Plateau is not only a key component of Asian monsoon evolution but that the fluctuations on the Tibetan glaciers have a significant impact on the climate system in the Northern Hemisphere and on the entire earth on various temporal and spatial scales.20 Studies have also shown a significant co-relationship between the Arctic Oscillation (AO) and the autumn–winter snow depth on the Tibetan Plateau.21 Scientists believe that the AO is causally related to weather patterns in areas thousands of miles away, including many of the major population centers of Europe and North America. National Aeronautics and Space Administration (NASA) climatologist James Hansen explains the mechanism by which the AO affects weather at points so distant from the Arctic: ‘When the AO index is positive, surface pressure is low in the polar region. This helps the middle latitude jet stream to blow strongly and consistently from west to east, thus keeping cold Arctic air locked in the polar region. When the AO index is negative, there tends to be high pressure in the polar region, and greater movement of frigid polar air into middle latitudes’.22 20

Hasnain, 2014. Lü et al., 2008, p. D14117. 22 Hansen et al., 2010. 21

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Before the late 1970s when the AO was in its inter-decadal negative phase, the snow depth over the Tibetan Plateau increased in autumn and then decreased in the following winter. Now the AO has been in a positive phase since the early 1980s, and consequently snow depth has decreased. Furthermore, sediments taken from the bottom of Kiang Lake on the Tibetan Plateau suggest that changes in wind patterns, which are clearly caused by global warming, are making the area dustier.23 According to the American Geophysical Union, this trend could accelerate the melting of crucial glaciers in the Himalayas and affect already imperiled water supplies. The increase in dust particles in the Tibetan plateau was at one time attributed to over-grazing and increased activity by local people. Scientific observation has now revealed that dusty periods coincide with the AO being in a ‘positive phase’. As a result of this positive phase, the Tibetan plateau is exposed to stronger winds in the summer. The link between dust levels and the AO, while not exact, does indicate that a dustier atmosphere can accelerate the melting of the glaciers in the Himalayas. Common science tells us that as dusts settles on white ice, it makes it darker thus absorbing radiation and accelerating melting. Dust also warms the air above, enhancing monsoon circulation patterns which could affect rain and alter rainfall patterns. As the Arctic melt raises above the sea level, the Tibetan glacier melt will increase the flow to many rivers, from the Yangtze, which irrigates more than half of China’s arable land, to the Indus river system, which is critical to the agricultural heartlands of India and Pakistan. Ongoing studies suggest that 40% of the plateau’s glaciers could disappear by 2050. Studies also indicate that full-scale glacier shrinkage is inevitable and will lead to ecological catastrophe. The impact of warming on the Tibetan glaciers and its direct relation to river flows creates an opportunity for the downriver 23

Kintisch, 2011.

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countries in South and Southeast Asia to raise common concerns and draw China into a regional dialogue and joint study on the climate change impact on the glaciers and precipitation patterns. In the Arctic Council, China and India as key observers can initiate a study on the snow, water, ice, and permafrost of the two regions. The findings of such studies will help both the countries to prepare preventive polices in the region. Downriver countries dependent on the rivers from Tibet should also advocate the establishment of a new ecological regime for the protection and sharing of the Tibetan Plateau. In the case of the Arctic as well, similar questions can be raised. As has been noted, ‘should five countries, which, as an accident of geography, form the Arctic rim, have the right to play with the world’s ecological future in pursuit of their economic interests?’24 There are also common concerns and changing realities for both the Arctic and Tibet that need to be addressed, particularly with regard to whether the resources of the Arctic (oil and gas) and Tibet (freshwater) can be regarded as ‘global commons’25 or as the ‘common heritage of mankind’.26 While no two issues can be the 24

Saran, 2011. In the latter part of the 20th century, the term ‘commons’ has expanded to include intangible resources such as the internet, open-source software, and many aspects of culture. The term ‘global commons’ is more recent and has several meanings: those resources that are shared by all of humanity, such as the sky, the oceans, or even the planet itself; the sum of various local and regional commons across the world; and a philosophical position suggesting that humankind has both a right and a responsibility to steward the wise use of the earth for all living species, as well as for future generations. See United Nations Institute of Training and Research, 2012, ‘Introductory e-Course to the Global Commons’. Available at http://www.unitar.org/event/introductory-e-course (accessed on July 21, 2014). 26 The concept of the common heritage of mankind was first articulated in 1970, when the UN General Assembly adopted a Declaration of Principles governing the seabed and ocean floor. Now this concept includes outer space, the legal status of lunar minerals, geostationary orbit, radio-frequencies used in space communication, 25

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same and one should be cautious of drawing parallels. Moreover, many states would contest the principle of ‘global commons’ or ‘common heritage’ based on sovereignty and territorial jurisdiction. However, it is an interesting thought process in an age of global governance and preventive policies. Conclusion The Arctic today is in an antithetical situation where, on the one hand, there are strong and important economic interests, and on the other, a need for climate protection and resource governance. In both cases, there is need for further research and findings, data collection, and clearer information to strengthen policy approach. The Asian countries are not untouched with the changes in the Arctic and are taking a strategic view of the Arctic affairs. Except for India, and to some extent Singapore, the other Asian countries’ interests are tied strongly with the immediate economic developments in the Arctic region particularly through the opening of the NSR, which presents a golden opportunity. In the years to come the Far East Asian countries involvement with the Arctic will only increase. But there is a downside which cannot be ignored. The melting of the Arctic sea ice can result in adverse impact on the key global oceanic and atmospheric currents. While in the short run economic opportunities are arising, it is not clear whether in the long run the rapid melting of the Arctic ice is a positive development. Asian countries should, therefore, coordinate in mitigating the likely adverse impact of the Arctic sea ice melt.

solar energy, low earth orbits and Lagrange points, the internet, etc. The Arctic according to non-Arctic Asian countries is rightly called the ‘common heritage of mankind’. See Col. P.K. Gautam, 2011, ‘The Arctic as a Global Commons’, IDSA Issue Brief, September 2, 2011. Also available at http://www.idsa.in/system/files/ IB_ArcticasaGlobalCommon.pdf, (accessed on July 21, 2014).

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References Banerji, D. and Shah, R., 2012, ‘India Overtakes Japan to Become Third-Largest Economy in Purchasing Power Parity, The Economic Times, April 19, 2012. Also available at http://articles.economictimes.indiatimes.com/201204-19/news/31367838_1_ppp-terms-india-s-gdp-power-parity (accessed on July 21, 2014). Chaturvedi, S., 2013, ‘Indian Foreign Policy and Antarctica: Towards ‘PostColonial’ Engagement?’, in Brady, A (ed.), The Emerging Politics of Antarctica, Oxon: Routledge, pp. 50–69. Hansen, J., Ruedy, R., Sato, M. and Lo, K., 2010, ‘If It’s That Warm, How Come It’s So Darned Cold? Available at http://www.columbia.edu/~jeh1/ mailings/2010/20100115_Temperature2009.pdf (accessed on August 1, 2014). Hasnain, S.I., 2011, ‘United Nations Environment Program Committee on Global Assessment of Black Carbon and Troposphere Ozone’. Available at http:// www.unep.org/dewa/portals/67/pdf/BlackCarbon_report.pdf (accessed on August 1, 2014). Kintisch, E., 2011, ‘Is Global Warming Making Tibet Dustier?’, Science Now, January 2011. Available at http://news.sciencemag.org/sciencenow/2011/01/ is-global-warming-making-tibet-d.html (accessed on August 1, 2014). Lü, J. et al., 2008, ‘Arctic Oscillation and the Autumn/Winter Snow Depth over the Tibetan Plateau’, Journal of Geophysical Research: Atmospheres, 113(D14), p. D14117. Østhagen, A., 2013, ‘Arctic Oil and Gas: Assessing the Potential for Hydrocarbon Development in the Polar Region’, Ottawa Life Magazine, July 29, 2013. Also available at http://www.ottawalife.com/2013/07/arctic-oil-and-gasassessing-the-potential-for-hydrocarbon-development-in-the-polar-region/ (accessed on July 21, 2014). Saran, S., 2011, ‘Why the Arctic Ocean is Important to India’, Business Standard, June 12, 2011. Also available at http://business-standard.com/india/news/ shyam-saran-whyarctic-ocean-is-important-to-india/438716/ (accessed on July 21, 2014). Sinha, U., 2013, ‘The Arctic: Challenges, Prospects and Opportunities for India’, Debate, Indian Foreign Affairs Journal, 8(1), January–March.

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b2036 Asian Countries and the Arctic Future

Chapter 12

Asian Economic Interests in the Arctic — Singapore’s Perspective CHEN Gang

The melting of the Arctic ice as a result of climate change has aroused intense attention from some East Asian and South Asian countries, which have invested financially and diplomatically in the Arctic region. In the near future, an expected ice-free Arctic environment, as a result of continuous global temperature rise related to carbon emissions growth, will not only provide shorter shipping routes between the East and the West but also access to untapped energy and mineral resources in the Arctic region. The uplifting geopolitical and economic importance of the Arctic region under the new context of a booming Asia and an ice-melting scenario has not only made the development of the Arctic and adjacent regions more feasible and inevitable, but also spurred other powers to rethink their stakes in the prospect of a melting Arctic a new balance of the energy and environment scenario to be reshaped by the development strategy pursued by various strategic participants. Singapore, an island-state located in Southeast Asia with a big stake in the traditional shipping routes via Malacca Straits between energyguzzling East Asia and oil-rich Middle East, has been watching closely the new risks of being bypassed in the development of new sea routes via the ice-free Arctic. To better understand and respond 203

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to the challenges from the melting Arctic, in particular the emergence of the new Northern Sea Route (NSR), Singapore has successfully joined the Arctic Council, an intergovernmental forum inaugurated in September 1996 for promoting cooperation among the Arctic states on issues of sustainable development and environmental protection, as a permanent observer in 2013. Singapore, which may face similar competition to that Venice encountered in the 15th century when new trade routes were being developed to bypass Eastern Mediterranean, has to guard against going the way of Venice-style decline, and to avoid the risk of global irrelevance1 through capturing the navigation, energy, and environmental dynamics in the new round of Arctic development. Economic implications of a melting Arctic As the Arctic has been warming twice as fast as the rest of the earth since 1980,2 the Arctic Ocean could be consistently ice-free in the summer season sometime before 2040. That would enable commercial shipping routes between Asia and Europe as well as between Asia and North America. The new navigable Arctic sea routes from any Northern Chinese ports to European and North America’s east coast ports will be shortened by at least 40% compared with conventional sea lanes via Suez Canal or Panama Canal.3 It is estimated that the trip from Shanghai to Hamburg via North-East Route is 6400 km shorter than the traditional route via the Malacca Straits and the Suez Canal.4 On top of the cost-effectiveness of shortcuts via the Arctic Ocean, security consideration should also be factored in as China regards its heavy use of the Malacca Straits, one of the world’s busiest sea lanes between the Malay Peninsula and the 1

Hui, 2013, p. 12. AMAP, 2011, ‘Snow, Water, Ice and Permafrost in the Arctic (SWIPA): Climate Change and the Cryosphere’, (Oslo, AMAP), p. 4. 3 Bockmann, 2012. 4 Bertelsen, 2011. 2

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Indonesian island of Sumatra, as a strategic vulnerability. The frequent piracy harassments in East Africa, which has driven insurance premiums for ships travelling the Suez Canal and the Aden Gulf to new highs, consolidate some East Asian countries’ determinations to diversify sea lanes for its enormous foreign trade. Another lucre that many Asian countries could potentially reap is the huge reserve of natural resources in the region that remain untapped. In 2008, the US Geological Survey estimated that the Arctic contains up to 30% of the world’s undiscovered gas and 13% of the world’s undiscovered oil resources.5 Besides, the region contains abundant reserves of chromium, coal, copper, diamonds, gold, lead, manganese, nickel, silver, titanium, tungsten, and zinc, together with extremely bountiful marine lives and timber resources.6 China’s growing consciousness of the Arctic strategic importance is directly related to the trajectory of the country’s massive industrialization and urbanization that have increased its dependence on reliable overseas energy, mineral, fishery, and timber supplies. China’s energy consumption soared more than 200% in the past 20 years, making it the world’s largest coal importer and largest oil importer. China, the key global growth driver for iron ore and base metals, consumes over 60% of the world’s entire iron ore supplies and 40% of the copper supplies. Singapore benefits from East Asia’s economic boom The economic rise of East Asia, China in particular, has fundamentally changed the global trade and energy scenario in the past two decades. Experiencing enormous scale of industrialization and urbanization in dazzling paces, China has replaced the United States as

5

Gautier et al., 2009, pp. 1175–1179. ECON, 2007, ‘Arctic Shipping 2030: From Russia with Oil, Stormy Passage, or Arctic Great Game?’, (Oslo, ECON), ECON Report 2007-070, pp. 4–5. 6

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the world’s largest trader and energy consumer.7 From 1991 to 2010, China’s GDP grew at an annual rate of 10.5%, while its energy consumption rose 6.1% yearly.8 China’s foreign trade in goods, including both exports and imports, jumped 143 times between 1978 and 2010, with an average annual growth rate at 16.8%.9 With its energy consumption having soared more than 200% in the past two decades, China, once self-sufficient on energy production, today has to import more fossil fuels, especially crude oil and natural gas, to sustain its energy-guzzling industries and increasingly affluent life-style of domestic consumers. Although China has maximized its oil production capacity, the country could only uplift its domestic output by small margins per annum due to limited exploitable reserves. Consequently, the lion’s share of its soaring oil demand has to be satiated by foreign oil. From 1995 to 2009, China’s oil output grew only 26% to 189 million tons, while its oil imports jumped 598% to 256 million tons, accounting for 67% of China’s total oil consumption in 2009.10 Japan and South Korea, two other major economies in East Asia, have been major energy importers for a long time, and emerged as the largest and second-largest importer of liquefied natural gas (LNG) in the world. In the aftermath of the Fukushima accident in March 2011, Japan step by step shut down all of its 50 nuclear reactors for safety reasons, and about one third of the country’s power that had been generated by the nuclear reactors is expected to be met by 7

According to Organisation for Economic Cooperation and Development (OECD) and International Energy Agency (IEA) figures, China’s primary energy demand in 2009 reached 2,271 Mtoe, 18.7% of the world’s total and 5.1% higher than that of the United States, which ranked second in the world. OECD/IEA, 2011, World Energy Outlook 2011, (Paris, IEA), p. 81. 8 National Bureau of Statistics of China, 2011, China Statistical Yearbook, Beijing: China Statistics Press, pp. 5–7. 9 China’s State Council, 2011, ‘China’s Foreign Trade’. Available at http://www. gov.cn/zwgk/2011-12/07/content_2013475.htm (accessed on July 23, 2014), in Chinese. 10 National Bureau of Statistics of China, China Statistical Yearbook 2011, Beijing: China Statistics Press, p. 261.

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heightened oil and gas imports. For South Korea, although its net oil imports has remained stable in the past decade, the net imports of natural gas soared more than 120% to 42,152 million cubic meters between 2000 and 2010.11 Although natural gas has been a minor fossil fuel player in China’s energy mix for decades, today the percentage of natural gas, a relatively clean fuel with low carbon emission rate, in China’s total energy consumption is growing steadily. That picture is set to change dramatically as demand increases, with imports, both through pipelines and LNG, expected to grow.12 Both the rocketing trade and energy demand in East Asia and the dramatic structural change in the global economy have benefited Singapore tremendously as an international port, financial hub, trade center, and regional petrochemical base. Thanks to its unique geographic location at the crossroad along traditional Asian sea routes, Singapore currently is the world’s second-busiest port, behind Shanghai in terms of total shipping tonnage. Taking advantage of the unprecedented shift of the global energy demand gravity to the ‘new Asia’, Singapore also transships a fifth of the world’s shipping containers, half of the world’s annual supply of crude oil, and it is the world’s busiest transshipment port. Singapore is the Southeast Asia’s premier hub for oil and gas, a valuable sector that contributed about 5% of Singapore’s gross domestic product. In moving the energy industry up the next level, Singapore seeks to increase its refining capacity, with the expansion of existing refineries and optimization of refinery operations. Such effort not only aims at maintaining Singapore’s share of global refining capacity, but more importantly putting the country in good stead to enhance the growth of its oil trading activities by creating the critical volume of exportoriented refining throughput. Singapore has been a strong base in the region for energy research and development (R&D). Within the energy sector, Singapore is fast gaining leadership as an R&D base 11 12

IEA, 2011, ‘Oil and Gas Security 2011 — Republic of Korea’, (Paris, IEA), p. 2. Hook, 2011.

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for alternative fuels and the next generation of biofuels, and the country is also channeling its R&D capabilities towards developing high-value products such as lubricants. In its efforts to extract more value from refineries, Singapore has achieved headway in key R&D areas, such as process optimization and catalyst development which maximize the use of existing refinery assets.13 Singapore is strong in providing infrastructure solutions that are crucial for the energy industry to grow and remain competitive. Singapore has a pool of talented people that contribute a great deal to the city-state’s success as a leading global energy and chemical hub. Box 1. • • •

• • • •

Singapore’s oil industry: Facts and numbers14

The oil industry accounts for 5% of Singapore’s GDP. Singapore is one of the world’s top three export refining centers, accounting for 68.1 million tons of oil exports in 2007. The oil industry is not a standalone industry. Refining has been the catalyst for the chemical industry, providing advantaged feedstock as well as other spin offs including oil and gas equipment and oil rig manufacturing sectors. Singapore is Asia’s leading oil trading hub. It is also Asia’s oil and oil product pricing center. It is the leading bulk liquids logistics hub in Asia and ranks amongst the top three in the world. It is the world’s busiest marine bunkering center, accounting for 31.5 million tons in 2007.

13

Singapore Economic Development Board, 2013, ‘Energy: Industry Background’. Available at http://www.edb.gov.sg/content/edb/en/industries/industries/energy. html (accessed on October 20, 2013). 14 Ibid.

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Will new sea routes via the Arctic affect Singapore’s relevance? In September 2013, a 19,000-ton Chinese commercial containership, Yongsheng, became the first ship of its class to complete the journey between the Chinese port Dalian and Rotterdam, the Netherlands via the Arctic route north of Russia. The route took nine days and was 2800 nautical miles shorter than the conventional routes transiting the Straits of Malacca and the Suez Canal.15 The projected opening-up of the NSR that connects the Atlantic and Pacific oceans may render the traditional shipping routes via Singapore and the Straits of Malacca potentially less relevant. Today, Singapore’s shipping and petrochemical sectors rely heavily on its congenital geographic advantages of sitting at the crossroads of major trade and shipping routes, so if the NSR is being used more frequently in an ice-melting context, and more oil and gas are being transferred directly via the Arctic region to Northeast Asia, it is anticipated that some of the oceanic ships may bypass Singapore and the Straits of Malacca in the future. China, helped by its own domestic oil production of just over four million barrels a day, relies on the Straits of Malacca for around 37% of its total demand. In comparison, Japan, South Korea, and Taiwan all rely on the Straits of Malacca for around 75% of their total oil consumption.16 Singapore has benefited enormously from the soaring energy demand in the emerging China and South Korea during the past two decades. China is now more dependent of the oil from the Middle East than the United States, with over half of its imported oil from the region. Saudi Arabia is exporting the most crude oil to China, accounting for about 20% of China’s total oil imports.

15

CCTV, 2013, ‘Chinese Cargo Ship Reaches Europe through Arctic Shortcut’, CCTV News, television show. 16 Pedersen, 2013.

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While Singapore’s rise was compared by then-Singapore’s Foreign Minister George Yeo in 1988 with the rise of Venice in the 13th and 14th century, the current risk of global irrelevance facing Singapore has also been metaphorically linked with the decline of Venice after the 15th century, when its trade with the Levant or Eastern Mediterranean was under threat with Columbus’ discovery of America and Vasco da Gama routing trades via the Cape of Good Hope to Asia.17 Nevertheless, there are fundamental differences between today’s Singapore and Venice in the 15th century. First, although the number of ships using the NSR is on the rise, it is unlikely to become a major contender to the usual Southern Suez Canal route, as the Northern route is potentially only open for four to five months per year and still very unpredictable with a blurring ice-melting prospect. Second, Northeast Asia’s heavy reliance upon the crude oil supply from the Middle East will not be fundamentally changed by the projected energy supply increase from the Far North. It is still too early to say that much of the energy supply from the Middle East can be replaced by oil and gas production from the Arctic or Russia’s Far East, which still faces the high cost of exploration, development, and transportation as well as environmental and political obstacles. Third, Singapore today has successfully emerged on the global economic map as an international financial hub, high-end manufacture base and a regional center for a number of service sectors. Thus the local economy has been strong and diversified enough to withstand potential impact upon its energy and shipping sectors from any significant reshape in the global navigation businesses. For the Northeastern Asian economies including China, Japan, South Korea, and Taiwan, their fossil fuel demand will continue to grow in the years to come and the absolute amount of their energy importation from the Middle East will continue to grow, even if they 17

Hui, 2013, p. 12.

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are trying the diversification strategy simultaneously for the sake of energy security. At present, the Chinese energy demand is behaving like that of any other standard developing country and Chinese goals for the rapid urbanization of nearly 400 million people by 2030 will likely push up energy demand even further. With antinuclear sentiment running high and safety having been in question since the Fukushima nuclear accident in 2011, Tokyo temporarily switched off Japan’s 50 nuclear reactors, which had once supplied about one-third of Japan’s power. With the lowest energy security or independence of any OECD country, Japan’s natural gas imports have risen to almost 90 million metric tons annually or over USD 70 billion with much of the pre-Fukushima increase used to make up for its lost nuclear capacity. The world’s third largest economy may now be spending USD 250 billion per year on imported oil, gas, and coal.18 Given this reality, the diversification strategy pursued by the Northeast Asian countries will not reduce their reliance in absolute amount upon the energy transported from the Middle East. The Middle East, a focal point of great-power rivalry in the past century, has assumed heightened strategic importance for China. The Gulf is becoming an important destination for investment for China’s own energy industry, as it actively seeks business overseas. The oil economy is the key link to the growing trade between the two regions. There’s no sign showing that China’s energy diversification strategy will reduce its energy purchase or investment activities in the Middle East in the near future. The Straits of Malacca will remain relevant for the energy linkage between the East Asia and the Middle East. Singapore’s interest in joining Arctic development Although the Arctic littoral states and major East Asian economies all have the ambition to develop the resources and sea routes along 18

Sullivan, 2013.

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the Arctic, it is very unlikely for them to develop the region under a closed economic model. During the whole process of rejuvenating the Arctic, the littoral states need the technological, financial, and political assistance from its Asian partners, including Singapore. Besides major Northeast Asian powers, Singapore could be another potential Asian partner that can develop significant cooperation with the littoral states in the development of the Arctic region, especially in the fields of energy, environment, infrastructure, and transport. Singapore’s Arctic engagement began in 2009, following a study into the implications of Arctic developments on Singapore. Thus began a series of visits and discussions with experts in the field, which helped Singapore identify the concerns and challenges facing the Arctic region, the environment, and its indigenous communities.19 In the area of oil and natural gas that many stakeholders have interest in developing in the Arctic region, Singapore has extensive know-how to share. Singapore has no interest — nor does it have the resources or capability — in natural resource exploration and development, but Singapore can offer technical knowledge to develop tools for the Arctic.20 Singapore is incentivized to join the energy cooperation in the Arctic region as the Singaporean government is looking to strengthen the competitiveness of the energy industry, and develop innovative logistics solutions to enhance the synergies of refining, trading, and logistics-activities to meet global energy demand. As a very promising partner, Singapore can serve as a training ground for high-end energy personnel, a financial hub that channels investment to the Far North and a strategic partner that directly involves the development of the Arctic. 19

‘Singapore in the Arctic’, Senior Parliamentary Secretary for Singapore’s Foreign Affairs and Culture, Community and Youth, Sam Tan’s speech at the Arctic Circle Forum, October 12, 2013. 20 Ibid.

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As an extremely environmentally-fragile region under the context of climate change, the Arctic region has a lot to do to protect its unique ecological environment and conserve indigenous biodiversities when frequent shipment, massive energy projects and other infrastructure construction are breaking the serenity of the vast and remote region in the Far North. How to preserve the primordial environment featured with clean offshore waters, rich store of wild creatures and untouched eco-systems becomes a top environmental concern various stakeholders have to face when boosting the navigation and resource development in the region. Enormous natural resources should not be overexploited; mining infrastructure and navigation routes should be planned in an orderly and ecologically-friendly way to minimize the environmental impact from industrial activities. As a resource-constrained citystate, Singapore has created resource-efficient policies and technologies to achieve both prosperity and sustainability, some of which can be useful for future Arctic development. Arctic research is also an important component of Singapore’s Arctic interests. The National University of Singapore’s Centre for Offshore Research and Engineering and the Singapore Maritime Institute have conducted relevant research on the Arctic. Singapore was the first Asian country to construct an icebreaker. A Singaporean company, Keppel Corp, is also one of the world’s leaders in offshore rig construction, and has completed ice-class rigs for Arctic oil and gas industries. Keppel is now looking into the construction of a new, environmentally-friendly ‘green’ rig. In this way, Singapore-based companies can contribute to the sustainable economic development of the Arctic. Conclusion The strategic development of faraway Arctic region may have big impact upon Singapore, a transport and petrochemical hub in the region of Southeast Asia. Singapore, with a big stake in the

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traditional shipping routes via the Malacca Straits between the economically-vibrant East Asia and the oil-rich Middle East and mature economies in Europe, has been watching closely the new risks of being bypassed in the development of the resourceful Arctic and a new sea route via the ice-melting Arctic. While such a development in the Far North definitely will have an impact upon the petrochemical and shipping businesses via Singapore, Northeast Asia’s heavy reliance upon the crude oil supply from the Middle East and its intensive trade with Europe will not be fundamentally changed in the near future. It is still too early to say that much of the trade and transport via the Malacca Straits can be diverted to the future NSR, which still faces the high cost of development and transportation as well as political, environmental and legal obstacles. For the Northeastern Asian economies including China, Japan, South Korea, and Taiwan, their fossil fuel demand will continue to grow in the years to come and the absolute amount of their energy importation from the Middle East will continue to grow even if they are simultaneously strategically diversifying for the sake of energy security. The development of the Arctic region may have limited negative impact upon Singapore’s economy; actually the city-state can benefit a great deal from participating in the economic and environmental cooperation in the region. Singapore could be another potential Asian partner that can develop significant cooperation with the littoral states and Asian countries on the development of the Arctic region, especially with the new permanent observer status in the Arctic Council. In the area of energy and environment, Singapore has extensive know-how to share and is ready to join the sustainable development in the region. Singapore’s highly-skilled workforce capable of managing high-end complex manufacturing and research projects can be made use of to achieve constant industrial upgrades and to operate of state-of-the-art environmental and energy technologies. With the fast-growing

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clean energy in the backdrop of climate change, Singapore has developed a strong reputation for its ability and expertise as system integrators, providing clean energy solutions in domestic and overseas projects. Singapore is in the position to increase investment and share its know-how in the area of energy, environment, infrastructure, and emergency response, which will be valuable for the development of the Arctic in the long term. References Bertelsen, T.N., 2011, ‘China Watches Arctic Movement of Russia Closely’, GB Times. Also available at http://gbtimes.com/world/china-watches-arcticmovement-russia-closely (accessed on July 23, 2014). Bockmann, M.W., 2012 ‘Arctic Ship Cargoes Saving $650,000 on Fuel Set for Record High’, Bloomberg News. Also available at http://www.bloomberg. com/news/2012-06-13/arctic-ship-cargoes-saving-650-000-on-fuel-setfor-record-high.html (accessed on July 23, 2014). Gautier, D. et al., 2009, ‘Assessment of Undiscovered Oil and Gas in the Arctic’, Science, 324(5931), May, pp. 1175–1179. Hook, L., 2011, ‘China: Beijing Will Drive Global Natural Gas Demand’, Financial Times, December 20, 2011. Also available at http://www.ft.com/intl/ cms/s/0/41bc676a-25a0-11e1-9c76-00144feabdc0.html#axzz1h8PyOvOG (accessed on July 23, 2014). Hui, T.S., 2013, ‘Singapore Must Guard Against Going the Way of Venice’, Today, October 4, p. 12. Also available at http://www.todayonline.com/singapore/ spore-must-guard-against-going-way-venice (accesed on July 23, 2014). O’Sullivan, T., 2013, ‘Japan’s Energy Challenges 2 Years on from Fukushima’, Japan Today, March 5, 2013. Available at http://www.japantoday.com/category/ opinions/view/japans-energy-challenges-2-years-on-from-fukushima (accessed on August 4, 2014). Pedersen, J., 2013, ‘China Leads Peers in Resolving Malacca Energy Shipping Dilemma’, Wall Street Journal. Available at http://blogs.wsj.com/ searealtime/2013/05/13/china-leads-peers-in-resolving-malacca-energyshipping-dilemma (accessed on August 4, 2014).

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b2036 Asian Countries and the Arctic Future

Chapter 13

Changes in the Arctic and China’s Participation in Arctic Governance ZHANG Pei and YANG Jian

The Arctic is rapidly changing and moving progressively from the global geopolitical and economic fringe to the center. With accelerating global warming, as well as the dramatically reducing ice surface area, the possibility of and accessibility for exploitation of the abundant energy and mineral resources in the Arctic has greatly increased. Prospects for the development of navigation channels connecting North America, Northern Europe, and Asia have also become brighter. At the same time, the rapid melting of ice in the Arctic Sea caused by climate change has led to further deterioration of the global climate. The pressure on the Arctic environment and ecology has also increased, and Arctic governance has become more and more a focal concern in global governance. China is a ‘near-Arctic’ country, the world’s largest trading nation and a country on the rise. Climate change in the Arctic will have a significant impact on China’s climate, ecological environment and therefore on the socioeconomic development. The Arctic’s rich energy and mineral resources as well as the development of navigation channels will bring considerable potential benefits to China’s future economic development and trade expansion. China is an important ‘beneficiary’ of Arctic affairs, and is also one of those previously 217

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involved in Arctic affairs and governance. The constantly changing Arctic situation will enable China to have a deeper understanding of the Arctic, and more actively respond to changes in the Arctic, enhance technological and economic cooperation with Arctic countries, and actively participate in the governance of the Arctic environment and in other areas. The rapidly evolving Arctic As can be seen from Arctic’s history since man has inhabited the area, the Arctic region has gone through tortuous change from being at the geopolitical and economic fringe to becoming a geopolitical and economic center, and its importance to global politics, economics, and the environment is increasingly apparent. Humans inhabited the Arctic as early as 10,000 years ago, but for thousands of years the Arctic was perceived as a distant, barren land at the edge of the world. It was only in the late Middle Ages that the Arctic caught the attention of mankind. With the progress of great geographical discoveries, increased interest in the mystical Orient and the rise of the Ottoman Empire which led to the blockage of commercial roads to the East, Europe began exploring new routes and expansions. Europe pushed mankind’s Arctic exploration to unprecedented dimensions and collected a lot of knowledge about the Arctic. The importance of the Arctic as a unique geopolitical and geostrategic importance was fully demonstrated during World War II and the Cold War. Climate change and the rapid development of globalization have fundamentally changed the political and economic status of the Arctic. The geopolitical importance of the Arctic has once again been demonstrated and its attractive geoeconomic prospects are revealed. This is mainly due to the Arctic ecological and environmental protection issues brought about by climate change, the potentially

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large benefits of important resources and the broad prospects generated by the development of new routes. The Arctic is situated in high latitudes and it is cold all year round. However, over the past 30 years, the Arctic has experienced dramatic climate change. The speed of mean-temperature increase is twice that of other areas in the world. The increasingly warm climate of the Arctic not only has a serious impact on the Arctic’s ecological environment, it also results in changes in the Arctic atmosphere, ocean, sea ice, ice caps, snow accumulation and permafrost, as well as changes in the types and quantity of local species and food chains. The most evident consequence is the rapid melting and disappearance of sea ice. At the same time, the accelerated melting of Arctic ice and snow has narrowed the distance between the Arctic and the rest of the world. As it becomes easier for mankind to access the previously unattainable resources in the region, the geopolitical situation of the Arctic has also undergone fundamental changes.1 The Arctic region holds abundant resources of great economic and strategic value. According to the 2008 United States Geological Survey assessment report, there may be 900 billion barrels of oil and 1669 trillion cubic feet of natural gas stored in the Arctic, the two account for 13% and 30% of the world’s undiscovered oil and gas reserves respectively.2 1

European Commission, 2008, Climate Change and International Security, paper from the High Representative and the European Commission to the European CouncilS113/08, March 14, pp. 1–11. Available at http://www.consilium.europa. eu/ueDocs/cms_Data/docs/pressData/en/reports/99387.pdf (accessed on October 30, 2014). 2 USGS Circum-Arctic Resource Appraisal Assessment Team, 2008, ‘CircumArctic resource appraisal: Estimates of undiscovered oil and gas north of the Arctic Circle’, US Geological Survey Fact Sheet 2008−2009. Available at http:// pubs.usgs.gov/fs/2008/3049/fs2008-3049.pdf (accessed on October 30, 2014).

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In addition, the Arctic is also rich in coal resources and other important mineral resources, as well as fishery resources. The Arctic is one of the world’s major suppliers of marine products. The broad prospects for seaways development are also becoming increasingly brighter. With global warming and the encroachingly large area of melting Arctic sea ice, the prospects for commercial operation of Arctic waterways are becoming more realistic. From the 16th to the 19th century, adventurers, explorers, scientists, and businessmen from continental Europe flocked to the Arctic. They carved out two important routes from the northwest to the northeast, connecting Europe and Asia. Due to the perennial ice covering the Arctic region, the routes lacked commercial shipping value and were not realized for navigation. As the melting of Arctic sea ice hastens, the Arctic ‘ice-free’ period is continually extended and the possibility of commercial shipping across the Arctic increases. The Arctic Passage is potentially the shortest route linking the most economically dynamic regions in East Asia, northern Europe, and North America. Its navigation, will, to a certain extent, change the world’s shipping patterns. The rapid change in the Arctic has altered the inherent perception that people have had about the Arctic being a ‘frozen desert’ and strengthened the idea of a changing Arctic. Arctic change is not just a regional challenge, but a large-scale, global issue.3 Arctic climate change is also causing serious harm to the whole world. The main consequences include rising sea levels, melting permafrost and more frequently occurring extreme weather. Rising sea levels lead to flooding, this will affect a quarter of the world population. The rich mineral resources in the Arctic and the new navigation routes 3

World Wildlife Fund, 2009, ‘Arctic Climate Feedbacks: Global Implications. Executive Summary’. Available at http://www.wwfchina.org/content/press/ publication/arcticreport.pdf (accessed on October 30, 2014).

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are of great value to the global economy. Arctic issues are gradually centralized, while regional issues are increasingly globalized, thus prompting the international community to pay closer attention to the Arctic. Multi-level Arctic governance and international cooperation A great number of global challenges are to be found in the Arctic. The individual Arctic countries or even regional arrangements alone are not able to resolve the difficult Arctic governance issues. There is need for global cooperation with all stakeholders involved to take common actions and form multi-level governance mechanisms. Arctic governance involves multiple levels including global, regional, sub-regional levels. Regional and sub-regional governance are organic parts and important foundations for global governance. The earliest regional Arctic governance dates back to the 1920-Spitsbergen Treaty, also known as the Svalbard Treaty. It is to date the only global-level governance arrangement for the Arctic region. Almost a century after its establishment, especially after the Cold War, there were vigorous developments of Arctic regional governance mechanisms, forming multi-level, cross-boundary, multi-function Arctic governance networks. These governance mechanisms include global, regional, sub-regional, and even local mechanisms. They are different in nature: comprehensive and fieldbased mechanisms, formal and informal mechanisms, multilateral agreements, as well as bilateral arrangements. Some mechanisms overlap, some are distinct yet complementary, and together all of them make up the mechanisms and framework for Arctic governance. Arctic regional and sub-regional governance mechanisms began during the Cold War. As early as in 1946, Canada, Denmark, the Soviet Union, Sweden, the United State, and 15 other countries signed the International Convention for the Regulation of Whaling.

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On November 15, 1973, the five countries of Canada, Denmark, Norway, the Soviet Union, and the United States signed the Agreement on the Conservation of Polar Bears in Oslo, Norway. This was the first treaty the Arctic nations specially formulated for Arctic affairs. It bore symbolic significance and played an important role in the protection of polar bears and the Arctic ecosystem. In the 1980s, as the Cold War calmed down, particularly after Gorbachev’s speech in Murmansk in October 1987, East–West relations took a turn from serious confrontation and conflict towards reconciliation and international cooperation. Thus, a major change in Arctic cooperation mechanisms was brought about and this directly resulted in the establishment of Arctic governance mechanisms such as the 1990-International Arctic Science Committee (IASC), the Arctic Environmental Protection Strategy (AEPS), the Arctic Council, the Conference of Parliamentarians of the Arctic Region, the Northern Forum, the Barents Euro-Arctic Region (BEAR), commencing a new chapter in Arctic governance. On a global level, the international community has created a series of conventions related to environmental protection and governance of the Arctic such as the UN Convention on the Law of Sea (UNCLOS), the Convention for the Protection of the Ozone Layer, the International Convention for the Prevention of Pollution From Ships (MARPOL), and the International Convention on Oil Pollution Preparedness, Response and Cooperation. These important environmental conventions are all applicable to the Arctic region. Participation in Arctic affairs is not limited just to Arctic countries, it is broadly international. In this era of globalization, Arctic seaways utilization and the development of Arctic resources affect areas far beyond the Arctic region. Responding to climate change as well as to protect the Arctic environment are the international community’s shared responsibilities. Therefore, the joint participation of Arctic countries and non-Arctic nations is necessary for the governance of Arctic affairs. Countries outside of the Arctic region have legitimate

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interests in the Arctic and at the same time, shoulder the responsibilities of co-governing the Arctic. Among the non-Arctic countries, there are those who hold influence in the environmental field, those who utilize the seaways and resources and product buyers. These nations have multiple roles and influences, and cannot be excluded from participation in Arctic affairs. At the Ministerial Meeting held in May 2013 in Kiruna, Sweden, the Arctic Council accepted China, India, Italy, Japan, Singapore, and South Korea’s applications to be official observers. Almost all the important participants who are currently concerned about the Arctic region are now included in the Arctic Council mechanism. Although observers have limited rights for participation, the inclusion of the numerous observer nations and international organizations not only makes it easy for the Arctic Council to capitalize on the scientific knowledge and expertise of these countries and organizations; it also provides the council with additional sources of funding, and helps the Arctic Council to transit from a regional organization to becoming one of the world’s most attractive forum,4 and offers broader prospects for Arctic governance and international cooperation. China’s interests in the Arctic and its course of participation in Arctic governance China is a ‘near-Arctic’ country situated in the peripheral region near to, yet outside the Arctic region. It is closely related to the Arctic in terms of geopolitics; the ecological changes and economic development of the Arctic region have great influence on China’s climate, environment, agricultural production, as well as economic and social development.5 Natural interests exist in the relationship between China and the Arctic. 4

‘China has become an official observer of the Arctic Council’, People’s Daily, May 16, 2013, in Chinese. 5 Jia & Shi, 2014, p. 26.

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Firstly, China is among the countries most vulnerable to the adverse effects of climate change. In recent years, China has experienced snow and ice storms in the south, drought in spring and summer in the middle and lower Yangtze regions, severe flooding in the south, typhoons in the coastal areas, severe autumn rain in the west, heavy water-logging in Beijing, and several other extreme weather conditions, significantly affecting the lives and property of the people of China as well as its economic and social development.6 Research shows that the frequent incidents of extreme weather in China are closely associated with Arctic warming. The Arctic sea ice anomaly of less ice-cover than previously is one of the main causes of China’s climate disasters in recent years. Secondly, China needs to actively expand overseas energy supplies to safeguard economic security. With rapid economic development, China’s demand for energy is growing and its dependence on foreign energy sources is also rising. In 2012, more than 58% of China’s oil supply came from abroad. In the next 20 years, along with urbanization, China’s production and household energy consumption will also increase. By 2030, China will need to import 70% of its required oil and 40% of its demand for natural gas.7 Regardless how China’s economic structure improves, its status as the world’s largest energy consumer will not change in the short term. As China is a late-blooming giant, the countries with which it conducts international energy cooperation, are mostly concentrated in areas where there are political unrest and social conflict. From an energy-security perspective, China needs a more diverse and secure energy supplies. The Arctic is the 6

CCTV, 2012, ‘2012 Annual Report on China’s Policies and Actions in response to Climate Change’. Available at http://news.cntv.cn/china/20121126/109060. shtml (accessed on October 30, 2014), in Chinese. 7 Xie, 2011, p. 16.

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world’s biggest and yet-to-be effectively developed resource reservoir, and it is a new, choice area for China to ensure energy security. Thirdly, China is interested in using the Arctic seaways to explore new areas of economic growth. China is a large trading and maritime nation; it is also a major shipbuilding country. Being able to take advantage of the new economic opportunities brought about by the opening up of water channels is important to China. In the coming decade, China’s status as a major trading nation will not change. In fact, China’s economy will become even more dependent on trade and shipping. The opening up of new Arctic seaways implies shorter shipping time, lower costs and greater efficiency. These factors are helpful for Chinese enterprises to maintain existing export competitiveness, and beneficial for external market expansion and ‘going out’-investment strategies. The economic significance of the future use of Arctic navigational channels lies not simply in time, cost and profit comparisons with traditional shipping routes, but the major opportunities and new economic zones created around the Arctic Circle which will offer China’s investors a greater market and economic space. Finally, China depends on Arctic scientific research to build up knowledge reserves and technological innovation for the country’s long-term development. Resources and environmental challenges are important factors currently limiting further economic development. New technological revolutions will be related to breakthroughs which solve energy and environmental constraints. The Arctic is a region where resources are linked to environmental vulnerabilities; it is also where the development of green technology is most likely to achieve breakthroughs. The Arctic can become an important testing ground for China to become a world leader in certain science and technology areas.

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China is not really a newcomer to the Arctic, as one might believe. China was actually involved in Arctic affairs already as early as 1925. In 1925, China signed the Spitsbergen Treaty, also known as the Svalbard Treaty. According to the treaty, Chinese ships and citizens are granted equal fishing and hunting rights in the areas and territorial waters indicated by the treaty, as well as free access to the waters, fjords and ports covered by the treaty. The treaty also gives signatories the right to conduct marine, industrial, mining, and commercial activities. After reforms and opening up to the world, as China began full integration into the world economy, it has also been actively involved in polar research and assumed the responsibilities of a powerful country in Arctic and marine environmental governance. In 1982, China joined the UNCLOS as a signatory. In 1999, China launched its first Arctic scientific expedition to conduct a comprehensive oceanographic survey. It had conducted a total of five Arctic scientific expeditions by the end of 2012, mainly carrying out scientific investigation and research on the interaction between the Arctic climate system and global climate system in the Bering Sea and the Arctic Chukchi Sea, the Beaufort Sea, in the Canada Basin, and other Arctic sea areas. In 2004, China set up a scientific research station — the Yellow River Station on Svalbard, Norway, to conduct continuous and perennial observation and research on Arctic upper atmosphere physics, oceanography, and meteorology. The fifth Arctic expedition conducted in 2012 also carried out navigational trials through the Northeast Passage. For more than 10 years, Chinese Arctic expeditions have gained a certain amount of experience, knowledge and activity in icy oceans. As important members of the IASC, Chinese Arctic scientists learn about the Arctic by carrying out extensive scientific and technological cooperation. Consequently, they can provide intellectual and technical support for Arctic governance and strengthen China’s position for active participation in Arctic affairs.

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China has also contributed greatly to the Arctic by being involved in establishing international rules for the Arctic region. On a global level, China has actively participated in setting international rules for Arctic navigation and environmental and ecological protection. The multilateral Arctic treaties that China has participated in include the UNCLOS, The United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol, the International Convention on the Regulation of Whaling, the Convention on International Trade in Endangered Species of Wild Fauna and Flora, the Vienna Convention on the Protection of the Ozone Layer, the Montreal Protocol on Ozone-Depleting Species, the Convention on Biological Diversity, and the Stockholm Convention on Persistent Organic Pollutants. The Arctic-related international organizations and forums which China has participated in include the Arctic Council, Arctic research trips, International Maritime Organization (IMO), IASC, the Ny-Ålesund Scientific Management Committee, the Asian Forum on Polar Sciences (AFoPS) and the Northern Forum. In recent years, IMO has been developing safety regulations for the navigation in international Polar waters, also known as the Polar Code, and China is one of the leading members of the organization. In the process of formulating the Polar Code, China’s representative group of experts have always come from the standpoint of safeguarding maritime safety and improving environmental protection to balance the current technological and future developmental needs. Furthermore, to find the equilibrium for the interests of Arctic countries and countries outside the Arctic region, to make reasonable suggestions objectively and impartially, to provide firm support and technical aid in the negotiations are China’s objectives.8 As we can see, historically, China’s participation in Arctic affairs started with first obtaining the rights to participate 8

Zhang, 2013, p. 16.

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in Arctic activities via the creation and signing of international treaties, to being involved in the development of Arctic governance rules on global and regional levels. Finally, China joined in on Arctic scientific expeditions and is currently participating in Arctic economic activities. The Chinese government’s stance and attitude towards Arctic governance The world has shown a high degree of interest to China’s participation in Arctic affairs. There are mainly three aspects with which the outside world is concerned about in terms of China’s position and policy on Arctic governance issues: firstly, how the Chinese government views the existing legal order and governance mechanisms in the Arctic. Secondly, how the Chinese government regards and resolves the important issues of Arctic governance such as environmental, scientific, and economic cooperation. Thirdly, how the Chinese handles relations with the Arctic countries. To date, the Chinese government has not yet issued any official documents on an Arctic strategy or policy. Nevertheless, its attitude and position on the Arctic is very clear, and is reflected in Chinese governmental representatives and officials’ speeches and presentations on different occasions. About the existing legal order, Chinese governmental representatives have clearly stated that ‘The ownership of the Arctic land territories is clear; their legal status is different from the Antarctic. …the primary legal basis for processing Arctic affairs is respecting the sovereignty of the Arctic countries’.9 The Chinese believe that the current laws of the sea cover various aspects including maritime demarcation, marine environmental protection, navigation, marine scientific research. Given these and that basic regulations are in place with regards which defines the 9

Liu, 2010.

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rights and obligations of coastal states and other countries, this is the legal basis which should be followed in dealing with Arctic oceanic affairs. The Chinese government has repeatedly affirmed the contribution of the Arctic Council towards Arctic governance, and believes that ‘The Arctic Council is the most important regional intergovernmental forum for discussion on issues regarding the Arctic environment and sustainable development, and it plays a significant role in coordinating Arctic scientific research, promoting environmental protection of the Arctic and boosting economic and social development in the region’.10 From the data submitted by the Chinese government in application for permanent observing member status to the Arctic Council, it is clearly stated that the Chinese government appreciates the Arctic Council’s positive role in Arctic affairs, that it accepts and supports the various provisions given in the Ottawa Declaration, and that it hopes to actively support the work of the council by participating in the relevant working groups within the framework of the council. China will also strengthen Arctic research exchanges and cooperation with relevant parties to enhance scientific understanding of Arctic issues. China will show respect for the values, interests, cultures and traditions of Arctic indigenous peoples and other inhabitants. Furthermore, China is willing to strengthen exchanges with indigenous organizations to seek better understanding of the concerns of the indigenous people, to actively participate in relevant projects, explore possible collaborations, and to contribute to the promotion of indigenous rights and interests. Currently, China’s activities in the Arctic are mainly scientific. Chinese scientists involved in Arctic scientific research are focused 10

Arctic Council, 2012, ‘Statement by H.E. Ambassador Lan Lijun at the meeting between the Swedish Chairmanship of the Arctic Council and Observers’. Available at http://www.arctic-council.org/index.php/en/events/meetingsoverview/observer-meeting-2012 (accessed on October 30, 2014).

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on aerial physics, climate change, ecology, marine, and other aspects. These topics are closely related to environmental and ecological protection, and are also important areas where the global science community is working hard to make up for the lack of knowledge to support Arctic governance. In 1996, China formally joined IASC and in 2004, it established the Yellow River Station, a scientific research station in the Arctic region. In 2005, Chinese scientists hosted the Arctic Science Summit Week. China actively participates in the International Polar Year project and it organized the ‘Changes in the Arctic Ocean and its impact on the midlatitudes’-research project series. Moreover, China supports and is actively involved in constructing Arctic long-term observational networks, in response to Arctic climate change and environmental issues. The Chinese government takes a prudent attitude towards the issue of developing Arctic resources and navigation channels. When discussing Chinese plans for the development and utilization of resources, Special Representative of the Chinese Government, Gao Feng, said, ‘We need to have a rational understanding of the value of Arctic resources. Although the Arctic is rich in oil and gas, the conditions for Arctic development, whether natural, political, economic or others are extremely harsh and costs are extremely high. We must be cautious when entering the Arctic’.11 Representative Gao Feng particularly emphasized that the economic development of the Arctic will create new challenges for the unique political environment, ecological environment and societies of the Arctic. Arctic countries and the international community need to work together to ensure the sustainable development of the Arctic, and consider the economic and environmental factors in a balanced manner. China has yet to conduct systematic research on Arctic development. Some individual Chinese companies are looking into 11

Yao, 2013.

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beginning business collaborations with local enterprises to participate in Arctic development. China believes that the future development of the Arctic should protect the Arctic environment, respect indigenous people’s interests and concerns, achieve sustainable development of the Arctic, and that the various developmental activities should comply with the relevant domestic laws of the Arctic nations, as well as relevant international agreements. Regarding various parties’ concerns about how China will handle relations with other Arctic countries, the Chinese government has already clearly expressed its views in four principles.12 First of all, recognizing and respecting each other’s rights should be the legal basis upon which Arctic and non-Arctic countries cooperate. According to UNCLOS and other relevant international laws, Arctic countries enjoy sovereignty as well as the corresponding sovereignty rights and jurisdiction in the Arctic, while non-Arctic countries are also entitled to various navigation and scientific research rights. Countries must first recognize and respect each other’s rights according to international law in order to form partnerships. Secondly, mutual understanding and trust is the basis of political security for cooperation among Arctic and non-Arctic nations. Arctic countries play a more important role in Arctic governance. Due to the prominent cross-regional issues such as climate, environment and animal protection, affected non-Arctic countries also possess legitimate interests and claims to Arctic issues. Countries need to cooperate with each other to resolve these problems through constant communication, enhancing understanding and trust to find common ground and mutual complementarities. Thirdly, joint research and the resolution of cross-regional issues is the main direction for cooperation between countries in and out of the Arctic region. Arctic and non-Arctic countries may take a broader perspective on regional issues to 12

Liu, 2010.

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strengthen scientific collaborations, convey more comprehensive information to the international community and facilitate the resolution of related issues. Fourthly, Arctic peace, stability, and sustainable development is the common goal for cooperation between Arctic and non-Arctic countries. Although there are differences in rights, interests and major concerns among countries in and out of the Arctic region, peace, stability, and sustainable development in the Arctic region is beneficial for the common good of the world. In this regard, Arctic and non-Arctic countries are not rivals, but partners. Arctic governance and the responsibilities of China as a great power Chinese Prime Minister, Li Keqiang, once pointed out clearly that ‘In the 12th Five-Year Plan,13 Chinese polar expeditions are currently in a strategically opportunistic period where they can accomplish great things. It is hoped that all polar expedition workers work closely together with modern facilities, carry forward the Antarctic spirit, further enhance capacity construction, develop indepth polar strategic and scientific research, and actively participate in international exchanges and cooperation to effectively safeguard national interests, and through the Arctic, make new contributions to Chinese polar development and peace for mankind’.14 This reflects the significance Arctic issues have in China’s new round of development, and also indicates China’s focus and direction in Arctic undertakings and policies. China’s Arctic activities aid to promote sustainable development, construction of modern facilities and contribute to world peace. 13

The 12th Five-Year Plan’s period runs from 2011 to 2015. Xinhua, 2011, ‘Li Keqiang made important instructions on the work of China’s polar expeditions’. Available at http://news.xinhuanet.com/politics/2011-06/21/c_ 121566059.htm (accessed on October 30, 2014), in Chinese. 14

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China’s Arctic policy must be adapted to China’s economic developmental needs, in line with China’s position as a great power and on par with China’s technological development. China’s Arctic policy is based on an assessment of the country’s developmental interests and capabilities, changes in the Arctic natural environment and changes in political and economic order, as well as the effective use of international regulations and diplomatic means. Developing China’s Arctic endeavors is vastly different from simple domestic regional and areal development. It requires the organic combination of domestic economic developmental needs, preparation of scientific and technical capacity, strategic investment of resources, use of diplomatic techniques, and international environmental cooperation. China should show forth more of the country’s responsibility as a great power in Arctic affairs and governance, and play an important role in the two aspects of Arctic development and environmental protection. As an emerging power accounting for approximately a sixth of the world’s population, China also accounts for a large share of the world’s energy utilization, production, and consumption. Its association with the Arctic economy is as an important potential market. Being a trading nation in the northern hemisphere, the legal system governing sea lanes are directly related to China’s navigation interests. At the same time that China enjoys the rights to utilize Arctic seaways and its relevant benefits in accordance with the applicable international laws, China as a developing power must also assume global responsibility for maintaining peace in the Arctic region, preserving environmental friendliness and promoting sustainable development. Arctic governance consists of bilateral and multi-level, global, regional, and inter-country governance mechanisms. China’s responsibility as a great power should be taken on multiple levels. Firstly, at the global level, China ought to make its own contribution to Arctic governance, climate change and ecological protection in

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the UN and other global organizations. China is a great power, a permanent member of the UN Security Council, a State party to the UNCLOS, as well as an important builder of the international system of environmental protection. These multiple identities determine that China is able to take a leading and coordinating role in maintaining peace, reasonably handling the dilemma between national sovereignty and the common heritage of mankind, managing a balance between the interests of Arctic and non-Arctic countries and safekeeping the fragile Arctic environment. Secondly, China can take a positive role in Arctic regional organizations, enhance communication with the Arctic Council and other organizations, and illustrate the need for countries outside the Arctic region to participate in the process. Thirdly, China should take note to exemplify the social responsibility of collaborators when developing economic and technological cooperation with Arctic countries, and while achieving a win–win situation for both countries, reflect the humanistic and environmental concerns at the specific investment and cooperation ground. As a future user of the waterways and a permanent observer of the Arctic Council which assumes international obligations, China respects the sovereignty and sovereign rights of the Arctic countries. Although China possesses legitimate rights and appropriate interests in the Arctic, the international community, particularly the Arctic countries, is doubtful and distrusting about China’s activities in the Arctic. The assertion that China is seizing Arctic resources and destroying the Arctic environment is an obstacle to its participation in Arctic affairs. China’s Arctic policy needs to take into consideration the concerns of the Arctic nations, Arctic indigenous people, and other Arctic organizations so as to establish a positive image of China’s participation in Arctic affairs and reduce possible antipathy. China should be clear with the international community; the sustainable development of the Arctic is for the common good of

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mankind. Regional peace, effective governance, environmental friendliness, green development, and scientific and technological progress of the Arctic are beneficial to the world, including China. China is willing to contribute to this end. China does not seek territorial sovereignty in the Arctic, but respects the sovereignty and sovereign rights of the Arctic countries. China encourages Arctic countries to shoulder the corresponding responsibilities of maintaining peace and the ecological environment in the Arctic. China will strengthen cooperation with and between Arctic countries, Arctic regional and international organizations, and work together with them towards world peace according to the principle of mutual benefit. References Jia, G. and Shi, W., 2014, ‘Reflections on China’s Participation in Arctic Affairs Under the New Situation’, Global Review, 6(4), in Chinese. Liu, Z., 2010, ‘China’s Views on Arctic Cooperation’, speech by Chinese Deputy Foreign Minister Liu Zhenmin on the occasion of attending an Arctic research trip in 2010, in Chinese. Xie, M., 2011, ‘China’s Economic Development and the Implementation of the 12th Five-Year Plan’, in Development Research Center of the State Council (ed.), World Development 2011, Beijing: Current Affairs Press, in Chinese. Yao, D., 2013, ‘Interview with Special Representative of the Department of Foreign Affairs on Climate Change Talks, Gao Feng: Costs of Developing the Arctic are High, Cautiousness is Required’, China Economic Weekly, May 28, 2013. Also at http://news.ifeng.com/shendu/zgjjzk/detail_2013_05/28/25769583_ 0.shtml (accessed on October 30, 2014), in Chinese. Zhang, J., 2013, ‘Arctic Navigational Safety Regulations’, China Ship Survey, 15(7), in Chinese.

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Chapter 14

The Cooperation and Competition between China, Japan, and South Korea in the Arctic GONG Keyu

The Arctic is rich in resources and has a unique geographical location. Since the 2007-Russian ‘flag incident’1 in the Arctic and with rising global warming, the international community has turned its eyes to the Arctic. The development and utilization of Arctic oil and gas resources, the opening of the Arctic sea routes, climate change, territorial disputes and other Arctic issues have come in the spotlight. As scientific research and the value of Arctic environmental resources continue to be unveiled, the international strategic position of the Arctic region has rapidly grown in importance, and both competition and cooperation among the relevant countries around the Arctic are increasing. Peace, stability, and sustainable development in the Arctic region are all beneficial to the international community. China, Japan, and South Korea which are countries near the Arctic, are heavily influenced by the changes in the region. Therefore, they should actively participate in international 1

China Daily Global Online News, 2007, ‘Planting of Russian flag in Arctic sea provokes controversy’. Available at http://www.chinadaily.com.cn/hqgj/200708/09/content_6019680.htm (accessed on September 19, 2014), in Chinese. 237

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cooperation in the Arctic, and together respond to the opportunities and challenges brought about by changes in the Arctic. China, Japan, and South Korea’s present involvement in Arctic affairs After the Cold War ended, characteristics of international politics’ globalization also began to be reflected in Arctic politics. Changes to the natural environment caused by rapidly increasing temperatures, and the economic, social, and political reactions triggered subsequently, have highlighted the common human interest issues in the Arctic region which transcend race or nationality. There has been a particular increase in Arctic-related scientific research, environmental protection and climate anomalies response activities, and international exchanges and cooperation conducted for these purposes have gone beyond the Arctic itself, and are moving towards the direction of global governance.2 The United States, Russia, Canada, and other Arctic countries have formulated national Arctic policies, declaring their national interests and clearly stating their developmental goals in the Arctic. They continue to strengthen their physical presence in the Arctic and at the same time find ways to obstruct non-Arctic countries from participating in Arctic affairs. China, Japan, and South Korea are countries near the Arctic with significant interests in the Arctic climate, environment, science, shipping and fisheries and so on.3 The common problems which the three countries face are how to be actively involved in the Arctic affairs without inducing resentment and opposition from relevant 2

Lu, 2010, pp. 25–29. Professor Guo Peiqing from Ocean University of China believes that the Arctic holds four areas of significance for mankind; environment, scientific research, resources, and sea routes. See Zhao, 2011, p. 376. 3

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countries, how to safeguard their environmental interests and resource interests in the Arctic, and finally how to meet both their own economic and social development needs while participating in Arctic affairs. The Arctic policies of China, Japan, and South Korea In May 2013, China, Japan, and South Korea were all approved as permanent observers to the Arctic Council. The rights of Northeast Asian countries to speak about Arctic resource development were strengthened, and their concern for and participation in Arctic affairs have also increased. China, Japan, and South Korea’s Arctic policies and interests can be generally observed through the course of their involvement in Arctic affairs. China believes that the peace, stability, and sustainable development of the Arctic benefit the international community at large.4 China hopes to work closely with the Arctic states and other non-Arctic countries and contribute towards the Arctic region’s peace and stability, environmental protection, and sustainable development. As a non-Arctic country, China mainly participates in Arctic affairs through international cooperation, especially with Arctic countries. China should strive to promote and establish mutual trust, respect, and benefits and seek win–win partnerships between Arctic and non-Arctic countries.5 Japan believes that changes in the strategic environment and economic competition in the Arctic region ‘directly affects Japan’s national interests’.6 Japan’s strategic interests in the Arctic include first of all, economic considerations mainly related to the maritime industry and resource development, and secondly, security and 4

Zhong, 2013. Tang, 2013, p. 16. 6 Yan, 2013, p. A18. 5

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East-Asian international relations. Through bilateral, multilateral or trilateral collaborations, such as the G8, Japan–Russia–USA or China–Japan–South Korea, and collaborations with international organizations, such as the International Maritime Organization (IMO), Japan hopes to ensure its national interests. Japan actively seeks to participate in Arctic governance processes. South Korea believes it should make use of the opportunity as a permanent observer of the Arctic Council to more actively draw up a strategy for commercial exploitation of the Arctic while continuing its already on-going research activities. There are two basic directions for South Korea’s Arctic policy. Firstly, to contribute to the international community in terms of climate and environmental research, as well as to cooperate with the coastal states is a policy. Secondly, by means of developing the Arctic sea routes, energy and marine resources, create new industries for South Korea. Also, expanding international cooperation with the Arctic Council and other relevant international organizations in order to enhance Arctic regional research and lay a strong foundation for the creation of new industries in South Korea through bilateral cooperation with Arctic coastal countries is important.7 The current status of China, Japan, and South Korea’s Arctic affairs’ affiliations As non-Arctic countries, China, Japan, and South Korea can only actively participate in international and regional cooperation mechanisms, and there take advantage of the speaking rights within the various organizations, in order to advocate their interests.8 Currently, China, Japan, and South Korea are involved in Arctic affairs at two international levels. Firstly, they participate at the globalized 7

South Korean Government, 2013, ‘Comprehensive Arctic Policy Master Plan’, released on July 25, 2013, in Korean. 8 Li, 2012, p. 28.

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international systems-level, which applies to the Arctic region, such as the United Nations Convention on the Law of the Sea (UNCLOS), the United Nations Framework Convention on Climate Change (UNFCCC), international legal documents developed by the IMO, such as the Guidelines for Ships Operating in Arctic Ice-covered Waters. Secondly, they participate in multilateral and bilateral agreements and institutional arrangements between countries, such as the Arctic Council. It is very significant that China, Japan, and South Korea have been appointed as permanent observers of the Arctic Council. By participating in the Arctic Council, China, Japan, and South Korea are able to understand the latest developments in Arctic affairs, gain insights into trending topics which concern them. Through participation in the various working groups and project meetings of the Arctic Council, they can share the latest technologies and learn how to deal with related issues. In addition, regional and international cooperation is of importance to the Arctic Council. China, Japan, and South Korea can strengthen exchanges and cooperation with its member states, observers and relevant international organizations within the organizational framework of the Arctic Council. Most importantly, the Arctic Council is currently in discussion about reforming Arctic governance. China, Japan, and South Korea could seize this opportunity and come to an internal agreement and ultimately propose a plan to the Arctic Council which is beneficial for the East-Asian region.9 Lessons from economic cooperation China, Japan, and South Korea are all members of the World Trade Organisation (WTO), the Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations with China, Japan, and South Korea (ASEAN+3), and the G20. These trade organizations provide a space for all parties to carry out economic 9

Li & Wu, 2010, p. 91.

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cooperation, and at the same time they provide mechanisms for the three countries’ senior government officials to conduct regular meetings and consultations. With the development of multilateral trade, WTO, and APEC-related systems and frameworks are unable to resolve the growing amount of friction and conflicts. However, they are still able to guide the trading conducted by the majority of countries in the international economic market. Similarly, WTO and APEC-related systems and frameworks are also able to guide China, Japan, and South Korea in trading in the international market to avoid excessive economic friction. Perhaps WTO and APEC-related systems and frameworks are not very effective in regulating the three countries’ economic behavior with specific regards to Arctic matters, but appeals can still be made to WTO and APEC when there are major economic disputes. Furthermore, China, Japan, and South Korea are important members of ASEAN+3 and G20, particularly in ASEAN+3. After China and ASEAN established a free trade zone, Japan and South Korea have also separately established free trade zones with ASEAN and its member states. At the moment, the ASEAN+3 has set up various types of cooperative mechanisms with leadership meetings at their core, ministerial conferences as important components, and official and unofficial collaborations. China, Japan, and South Korea can tap on the ASEAN+3-platform for economic and trade cooperation, and strengthen their cooperation in Arctic affairs, reduce friction and disagreements to ultimately reach consensus and come to agreement, laying a good foundation for the three countries to finally sign free trade agreements. Asian bilateral and trilateral cooperation on Arctic issues China, Japan, and South Korea jointly initiated the ‘Asian Forum for Polar Sciences’, which has become the only regional scientific cooperative organization in Asia. The three countries play an important

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role in this organization. China actively advocated for the ‘Pacific Arctic Group’ to be set up at the Arctic Science Summit Week. The working group has become a significant channel for the three countries to make an impact in the field of Arctic research. Starting in 2011, the Korea Maritime Institute10 has been the main financier and host of the ‘North Pacific Arctic Conference’ in Hawaii, discussing Arctic governance matters in an attempt to become the advocate for Arctic affairs among countries outside the region. Among the three countries, China and South Korea cooperate more together. Earlier on in 2008, the Korean Ministry of Education, Science, and Technology signed the ‘Memorandum of Understanding on Polar Science and Technology Cooperation’ with the Chinese Ministry of Science and Technology. Here, the two countries agreed to work together to compete against the West in the Arctic and narrow the gap between East and West.11 The two countries believe that their cooperation will be beneficial for both China and South Korea as part of the international community in protecting the global environment together and resolving the various issues such as global warming and the resulting ecological imbalance that mankind is facing. The Korea Polar Research Institute took the signing of the Memorandum of Understanding as an opportunity to jointly promote research it has done with China, such as ice-drilling tests, and joint cruises with Korea’s first ice-breaking research vessel, Araon. At the international and regional level, competition, cooperation as well overlapping and convergences between China, Japan, and 10

Korea Maritime Institute. Available at www.kmi.re.kr (accessed on September 19, 2014). 11 Yonhap News Agency, 2008, ‘South Korea and China to work together in developing the treasure trove of resources in the North and South Poles’, May 27, 2008, in Chinese.

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South Korea, is inevitable. As such, the three countries need to carry out deeper collaboration based on mutual coordination in order to achieve overall effectiveness as one entity whose strength is greater than the sum of the individuals, and maximize participation power in Arctic affairs. Features of Arctic governance influential on the Asian countries China, Japan, and South Korea are all located in Northeast Asia, and also major economies on a world-scale. Their economic model and level of development are highly dependent on international trade, shipping and energy. All are non-Arctic countries, but they are permanent observers of the Arctic Council. As they share similar positions towards many Arctic issues, there is a high possibility that they will work together. However, because they all also participate in Arctic affairs, they pay even closer attention to their own national interests, making competition inevitable. China, Japan, and South Korea basically take the same stance toward strengthening Arctic expeditions and international cooperation. Therefore, disagreements are unlikely to happen, but a certain degree of competition may exist on issues of Arctic sea routes, future resources and energy development. In broad terms, China, Japan, and South Korea’s participation in Arctic affairs is greatly affected by the following features of Arctic-governance issues. Lack of comprehensiveness: International conventions, treaties, agreements involving the Arctic, as well as the legislative philosophies of the different Arctic countries do not take into account the larger global overarching concerns of the entire Arctic system and Arctic security. Existing regimes and laws are mainly focused on certain elements, emphasize on the development of specific Arctic resources or on the prevention and resolution of particular conflicts. Current laws governing the protection and

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development of the Arctic are a collection of the individual Arctic countries’ and single-element legislation focusing on Arctic protection. They cannot be recognized as an entire legal system governing the Arctic. Because of this China, Japan, and South Korea may in the future develop different interpretations of the laws and regimes which can lead to unnecessary conflicts and misunderstandings. Lack of one comprehensive system: The numerous Arctic laws are not systematic as they exist in different jurisdictions. There are many international treaties related to the Arctic region and the different provisions in these treaties are inconsistent in terms of subject matter, scope, rights, and obligations. There is no authoritative regional or global international organization which has taken on a legislative role in the Arctic. Thus, the variety of international laws and regulations applicable to the Arctic come from different places with different approaches. Moreover, the individual countries’ national legislations are not supervised by an international organization. Based on their own interests, China, Japan, and South Korea can choose different approaches and response strategies in interpreting and applying the diverse array of legal regulations. This might generate conflicts between relevant Arctic laws and policies. Lack of coordination: There are pronounced trans-boundary contradictions among the Arctic states. As environmental issues and the like by themselves are mobile and have no boundaries, some Arctic trans-boundary issues may to a certain extent become international crises. As states participate in Arctic affairs, be it among Arctic states, between Arctic and non-Arctic countries or among non-Arctic countries, each advocate for their own national interests. In the absence of a comprehensive communication and coordination system, it can become a situation where each goes their own way and even result in malign competition.

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An unbinding nature: Currently, the most productive Arctic cooperation is in environmental collaborations, but environmental protection belongs to ‘minor politics’. Presently, most of the cooperation mechanisms in the Arctic are non-binding ‘soft laws’, mainly pursued through agreements, declarations and projects rather than through public laws or treaties. Consequently, they are not internationally legally binding. These ‘soft-cooperation’ mechanisms do not secure effective implementation, and there are no clear commitments made on many issues, making it difficult to meet the increasingly urgent needs of China, Japan, and South Korea as they participate in Arctic affairs in the future.

Room for increased cooperation between China, Japan, and South Korea’s on Arctic issues China, Japan, and South Korea are not Arctic countries, which mean that their direct activities in the Arctic lack a foothold. The three countries can only participate in Arctic affairs through collaborations with other countries. China, Japan, and South Korea ought to more actively explore avenues, methods and subjects of cooperation in line with the three countries’ common interests. The three countries should develop bilateral and multilateral relationships with the Arctic states in order to be more involved in Arctic affairs.

The necessity to strengthen Arctic-affairs cooperation between China, Japan, and South Korea Expand energy channels and safeguard economic development: Japan and South Korea are small territories and lack resources, while China’s economic and social development is tightly linked to the abundance of resources. The Arctic is inherently rich in resources, and therefore is the Arctic of great economic and strategic value to the three countries. Once the Arctic sea routes are opened and cleared for commercial operation, they will not only

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impact the maritime transport and international trade of the three countries, but also boost the development of the three countries’ coastal areas and may spur them to become new economic growth zones. Most of China, Japan, and South Korea’s bulk cargo is transported by sea. Because of the congestions in the Malacca Straits and the intrusion of Somali pirates, the three countries’ freight industry is dependent and easily manipulated by others. Even maritime safety and international trade security is threatened by this situation. The opening of the Arctic sea routes will alleviate these problems which have been plaguing the three countries in the Malacca Straits. Improve the geopolitical situation and safeguard national rights and interests: As an extension of both the North American continent and Eurasian continent, the Arctic Ocean is from a geopolitical perspective the most important geopolitical target for countries in the northern hemisphere. Due to its special strategic location, the major powers are highly aware of its geopolitical importance and this makes it a competitive region. The Arctic Ocean is surrounded by large North American and Eurasian countries, and there is a possibility of conflicts where countries share borders. The Arctic region is a latent conflict area. Plans to ease sovereignty issues in the Arctic Ocean and to help to appropriately establishing a new order, in line with international interests in the region, would effectively coordinate the interests of all parties involved. China, Japan, and South Korea should not be plain observers in the Arctic, but rather they should plan ahead and actively seek and defend their legitimate rights and interests. Take on international responsibility and demonstrate the countries’ soft power: China, Japan, and South Korea are great powers in East Asia and ought to fulfil their international responsibilities in areas such as environmental preservation and security. Therefore, they must also be exemplary in developing and reasonably utilizing Arctic resources. Building new security concepts

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as the core of a new order on the Arctic Ocean is one such concrete action. This new order can effectively promote the formation and development of a multi-polar world order. With the development of the times, one of the historical missions that China, Japan, and South Korea are entrusted with is that of preventing security challenges from occurring in the Arctic Ocean, by establishing a new order to properly handle relevant sovereignty disputes and lay a strong foundation for further cooperation in the future.

Complementary factors promising for increased trilateral cooperation Judging from China, Japan, and South Korea’s economic development, the following basic complementary factors are very beneficial for the three countries’ involvement in Arctic affairs. Complementary means of production: Japan and South Korea are poor in natural resources, and their demand for primary processed products such as minerals, fuels and industrial raw materials is great. Most of their raw materials are imported. Henceforth, as China, Japan, and South Korea continue to develop economically, their demand for energy will be even greater, they will become even more dependent on imports, and there will be increased investment in basic industries. Arctic development and the opening of commercial operations of the Arctic sea routes will create an even greater cooperation platform for China, Japan, and South Korea on energy and resources. Complementary human resources: China is a great country with surplus labor force and low labor costs. At the same time, Japan’s population is aging, while industries are developing rapidly. The supply of fresh human resources is not enough to meet its needs and Japan needs to seek supply from overseas markets to meet its demand. A similar problem is beginning to appear in South Korea’s

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human resource structure; they are unable to meet the demands of the country’s rapid development. As the three countries get involved in Arctic affairs, the expansion of trilateral trade can improve personnel mobility and effectively regulate the problems of human resource scarcity or surplus. Complementary science and technology resources: In today’s modern development, science and technology can drive the acceleration of technology-intensive industries and also trigger the free transfer of technology, forming an important link for connecting the three countries’ economic future prospects. Japan is good at advanced science and technology research and development, while South Korea is still at the growth stage, having started out a little later than Japan. In comparison with Japan and South Korea, China’s science and technology resources are not yet comprehensive. China still needs to import electronic, automotive, chemical products, and other capital and technology-intensive goods from Japan and South Korea. As the three countries become involved in Arctic affairs in the future, exchanges will be strengthened and industrial cooperation promoted, narrowing the gap between the countries. This will drive the overall long-term development strategies. Complementary industrial structure: Japan is now in the postindustrial era and possesses obvious advantages with respect to capital and intermediate-goods production, compared to China and South Korea. Comparatively, China is more competitive in final consumer products, such as textiles. South Korea lies between the two, holding export advantages in some capital goods and tertiary industries. According to the factor-endowments theory, the trade structures of China, Japan, and South Korea are vertical chains. A more internationalized of labor division will create horizontal value chains. Free trade agreements between China, Japan, and South Korea are not only able to accelerate trade within the region, but will also improve the region’s industrial structures. The

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involvement of the three countries in Arctic affairs will open up new areas of economic cooperation for all three. Recommendations for the participation of China, Japan, and South Korea in Arctic affairs The rich natural resources in the Arctic region, its poor developmental conditions, fragile ecological environment and their impact on global environmental change are problems that extend beyond national borders, and beyond the capacity and scope of any individual country acting alone. No one country can address and resolve all Arctic matters single-handedly. All countries need to cooperate in order to solve these issues, and this is especially true for China, Japan, and South Korea. Principles influencing China, Japan, and South Korea’s Arctic-affairs involvement The participation of China, Japan, and South Korea in Arctic affairs is beneficial for the three countries’ economic development, but at the same time we must also recognize that their participation in Arctic affairs might not be smooth-sailing. Conflicts and competition seem inevitable, and the three countries should strengthen coordination and cooperation with each other to gain the best results and create win–win situations for all parties involved. The following principles should be kept in mind when the three countries move forward on Arctic-related issues. Firstly, finding win–win opportunities is a good principle for international cooperation. Not only must a country consider its own interests as well as those of its citizens, the interests of other countries must also be taken into account to find common ground. When countries cooperate, some of the interests of one or more countries will certainly be compromised in order to coordinate the national development of each country. Therefore, every country

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should seek win–win options which allow every member state to gain the best possible development with minimal sacrifices, and at the same time benefit the development of regional cooperation. This also indicates that finding the right balance is important; each country has its own advantageous industries and vulnerable industries, as well as key protected industries and sensitive industries. No country would be willing to be hurt while opening up their weak industries. This is why all countries ought to make concessions each to the degree they can, so that they can protect their own industries while promoting mutual cooperation and achieve win–win situations. Secondly, the principle of market competition is important. China, Japan, and South Korea are all members of the World Trade Organization. When cooperating in the Arctic, they must also follow international regulations and act according to the international market environment. Thus, whether in choosing partners or cooperation projects, they need to make decisions based upon fairness, openness and equity in the market. Furthermore, seeking common ground, equality and mutual benefit is a principle it is wise to adhere to. China has always strived to follow this principle in its political and economic work, and its participation in Arctic affairs together with Japan and South Korea is no exception. China, Japan, and South Korea vary in social systems and levels of economic development and each looks out for its own interests. As such, each country must respect the differences they have and dialogue on equal grounds to seek development through cooperation. The involvement of China, Japan, and South Korea in Arctic affairs is a long-term process. All three countries have deep-rooted national sentiments. Although their economies have shown great progress, they each have some traditions that are uniquely their own. China, Japan, and South Korea should maintain a patient attitude and work step by step to strengthen cooperation and narrow the differences.

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Specific recommendations for China, Japan, and South Korea’s involvement in Arctic affairs Capitalizing on the opportunity as permanent observer countries to strengthen cooperation with the international community, China, Japan, and South Korea should even more actively develop bilateral and multilateral relations with Canada, Denmark, Norway, Russia, the United States, and other Arctic countries. The three countries should explore avenues, modes and content matter for collaborations according to their national interests, and seek greater cooperation and support on Arctic affairs. The three countries should seize the opportunity being permanent observers of the Arctic Council brings. In developing relationships with international organizations such as the Arctic Council, China, Japan, and South Korea should seek more opportunities to participate in Arctic affairs. Furthermore, with the Arctic sea routes as a starting point and precedent, China, Japan, and South Korea can work closely together to establish consultation channels with Russia and discuss ice-breaker costs, relevant sharing of information and other issues. China, Japan, and South Korea can strengthen exchanges and cooperation as well as enhance the driving effect of the Arctic Passage by facilitating the commercial navigation of the Arctic Passage better, by promoting the distribution of shipping supplies, establishing maritime exchanges, setting up vessel management facilities, and the construction of relevant business parks and so on. Given that Russia’s ports are old and becoming outdated, and rescue facilities are inadequate, China, Japan, and South Korea can heighten cooperation and jointly participate in the development and construction of Russia’s Arctic coastal port, conduct mutual technical exchanges and reduce financial risks. On the Asian side, to promote a deeper sense of community, the three countries can establish friendship cities as links to create

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Northeast Asian Cities Circles. Starting from the Shanghai–Busan– Osaka–Yokohama bases to form the Tumen River Delta–Japan Sea Rim Economic Circle, Yellow Sea and Bohai Sea Economic Circle and so on, could make a ‘sub-regional cooperation community’ a pioneering model for Northeast Asian cooperation. All the big friendship cities should take a globalized, liberalized and professional attitude towards accelerating the pace of opening up and implementing city-to-city exchanges. The economic circles can be a model forwarding both Arctic-affairs participation and regional economy invigoration, thus boosting prosperity in Northeast Asia. China, Japan, and South Korea should work together on relatively ‘easy’ issues and lay a solid foundation for future development, and possible future difficult times. Arctic affairs include sensitive international disputes, such as on sovereignty claims and resource rights of sea waters and continental shelves. Such disagreements can easily cause tensions to cooperation meant to bring the international community together. On one hand, China, Japan, and South Korea ought to establish appropriate incentives, encourage academic and practical exchanges and lectures for all levels of experts, professors, and technical staff on relevant Arctic issues. On the other hand, participating in Arctic related cooperation, the three countries should start with scientific research, environmental protection and areas where it is easier to reach consensus. Beginning from and building upon these, they can gradually enrich the matters of cooperation, develop and expand their cooperation in Arctic affairs towards other in-depth issues, progressively extending the participation rights of the three countries in Arctic affairs. The future development of the Arctic will greatly influence the global economic and geopolitical situation, and have an important and farreaching impact on China, Japan, and South Korea. The basic premises for the three countries’ Arctic policies should be peaceful utilization for the benefit of mankind, mutual respect, enhancing understanding and trust, develop win–win relationships with Arctic

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states and the entire international community. Working together the three countries should aim to safeguard and promote peaceful, stable and sustainable development of the Arctic. References Li, W., 2012, ‘Research on the Cooperative Approaches of China, Japan and South Korea in the Arctic’, Polar Strategies, 6 (June), in Chinese. Li, W. and Wu, D., 2010, ‘Analysis of the Relationship Between Major East Asian Countries and the Developing Arctic Council’, International Outlook, 6, in Chinese. Lu, J., 2010, ‘New Features of the Arctic Geopolitical Competition’, Contemporary International Relations, 2, in Chinese. Tang, G., 2013, ‘Arctic Issues and China’s Policy’, International Studies, 1, in Chinese. Yan, D., 2013, ‘Japan’s Arctic strategic vision from the geopolitical perspective’, Oriental Morning Post, August 2, 2013, p. A18, in Chinese. Zhao, P., 2011, ‘China’s Arctic Activities’ in T. Qu (ed.), Arctic Issues Research, Beijing: Ocean Press, in Chinese. Zhong, S., 2013, ‘People’s Daily: Active Participation in Arctic Cooperation’, People’s Daily, March 22, 2013. Available at http://opinion.people.com. cn/n/2013/0322/c1003-20876219.html (accessed on September 19, 2014), in Chinese.

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Chapter 15

Findings and Challenges of the North Pacific Arctic Conference1 Jong-Deog Kim

The Arctic has continually changed for the last 30 years due to climate and political reasons. In particular, the melting ice in the Arctic facilitates the considerable and potential use of the Northern Sea Route (NSR) as an international trade route between the North Atlantic and North Pacific regions. Since the beginning of 2010, the NSR has seen an increase in the number of vessels passing through. In addition, the NSR is the shortest route available between Asia and Europe, about 40% shorter than that of the Suez Canal. Despite the NSR showing considerable potential for the future, serious constraints have been affecting its use for commercial shipping. Oil and natural gas and commercial fishing have also garnered interest since the reduction of the Arctic sea ice due to the major economic, cultural, social, and environmental impacts as the Arctic becomes more accessible. The Arctic holds a great potential for oil 1

The author acknowledges the conference proceedings and the contributions that were made at the North Pacific Arctic Conferences. Robert et al. (eds.), 2013; Young et al. (eds.), 2012; Young et al. (eds.), 2013.

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and gas development and two Arctic states, Norway and Russia, have already begun exploring the oil and gas reserves in their respective regions. Nonetheless, gas development in the Arctic has proven to be challenging. Environmental issues also play a prominent role and may affect commercial fishing and the development of natural oil. As the situation in the Arctic becomes more complex, the Arctic Council, the leading intergovernmental forum in the Arctic, has been trying to find ways to address these issues with nonArctic states. Once the council made the decision to extend its observer states to 12, five of which are Asian states in 2013, the North Pacific region became a representative symbol of Arctic cooperation. In 2011, when China, Japan, and South Korea were ad hoc observers of the Arctic Council, the Korea Maritime Institute, Korea Transport Institute of the Republic of Korea, and the East–West Center of the US initiated the North Pacific Arctic Conference (NPAC) to share the visions and ideas for the challenges in the Arctic with participation from the Arctic and non-Arctic states in the region. The NAPC has so far focused on issues such as global warming, safety and security of shipping, technology and science, sustainable indigenous community and Arctic Ocean governance. This chapter will discuss the findings found from the NPAC from 2011 to 2013, new initiatives to create the North Pacific Arctic Research Community (NPARC), and future challenges that will be discussed in the upcoming 2014 NPAC. Findings In this next section, findings and suggestions on Arctic related issues from 2011 to 2013 in the NPAC are shown.

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In 2011, participants examined four major results that not only affect the Arctic but the North Pacific region. 1. Transformations in the Arctic for the North Pacific: With high scientific probability, the changes in climate globally and for the North Pacific, include surging greenhouse gas emissions, rising global temperatures, warming oceans, declining Arctic sea ice, shrinking ice sheets, rising sea levels, glacial retreat, extreme weather events and ocean acidification. 2. The NSR and changes in the North Pacific transportation and logistics: As the sea ice in the Arctic begins to melt, the NSR is becoming more accessible as an international trade route between the North Atlantic and North Pacific regions. Furthermore, sea ice reduction opens the region to commercial navigation and provides easy access to Arctic oil and gas resources. However, numerous geopolitical and policy issues, such as who owns the Arctic and what are the options for nonArctic states to address Arctic policy issues, were raised and explored for further discussions. 3. North Pacific access to Arctic energy resources: The Arctic is likely to contain a substantial amount of oil and natural gas reserves, Arctic states such as Russia has been active in the Arctic. Additionally, non-Arctic states such as China have shown interest in the Arctic due to their growing energy needs and turn to foreign oil imports. Energy security plays an essential role in military, foreign policy, security, and economic issues and the development of energy resources in the Arctic have become an important opportunity for improving global energy security. 4. Promotion of North Pacific cooperation on the governance of Arctic shipping and energy resource development: Experts researched international governance issues for the access and use of the Bering Strait, NSR, and the Northwest Passage.

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Shipping was heavily restricted in the NSR and Northwest Passage due to the year-round sea ice, but climate changes have caused the sea ice to become thinner, making the two sea routes temporarily ice free and available. In 2012, the following five findings were presented in the NPAC. 1. Potential Arctic shipping: A quantitative study was carried out to assess the competiveness of the NSR compared to the Suez Canal Route and the Trans-Siberian Route. The study concluded that the NSR faced obstacles and risks but in order to alleviate these obstacles, commercializing the NSR was necessary. 2. The International Maritime Organization (IMO) and environmental protection: Existing IMO guidelines and standards have been applicable in the Arctic, but have failed to keep pace with protective measures for the Antarctic. In addition, the Polar Shipping Guidelines are focused mostly on maritime safety and not on environmental protection. 3. Arctic marine living resources: Necessary roles are needed from the Arctic coastal states and others that are interested in the use and management of living marine resources in the Arctic. International cooperation and scientific research are also important to protect fisheries from the possibilities of negative externalities generated by shipping, oil and gas development, and tourism. 4. Potential Arctic oil and gas development: Onshore and offshore oil and gas productions are underway in the Arctic and are making the Arctic more attractive to Asian states, like China, Japan, and South Korea, which are large consumers of energy and are looking to diversify their sources supply. 5. Informal Arctic governance mechanisms: Methods are needed that will allow non-Arctic states to be heard in Arctic related issues such as participating in informal forums, such as NPAC.

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Following the results, experts were in agreement with the findings, however, concerns were raised whether some of the findings will aid in future recommendations or research between the Arctic and non-Arctic states. In addition, experts in various countries such as, China, Japan, Russia, and South Korea shared their countries’ perspective for each finding and provided suggestions to better understand the situation surrounding the Arctic. Indigenous communities also presented their viewpoints and concerns. Most indigenous people argue that they need to be involved in all issues on the Arctic and collaborations with the indigenous communities and Arctic stakeholders are needed in order to share their knowledge and skills with one another. Overall, the commentaries shed light on the issues surrounding the Arctic and the importance of international cooperation. In 2013, five findings were discussed in the NPAC. 1. Future of Arctic maritime shipping: Transport and logistical challenges to natural resource development and shipping were raised. Moreover, there were concerns about the importance to balance commercial activities with environmental protection in the foreseeable future. 2. Future of Arctic oil and gas development: Questions which include the impact of shale gas revolution in the North America were asked about the oil and gas development in the Arctic. 3. Potential Arctic fisheries: Since commercial stocks in the central Arctic Ocean are unknown, the main focus was on the future of commercial fisheries and if fisheries management is necessary even if there is uncertainty in estimating future fishable resources in the central Arctic Ocean. 4. Inuit perspective on building resilient communities in the Arctic: The Inuit communities argue that the future of the Arctic should be determined with the consent of the peoples living in the Arctic and the possibility of enhancing the resilience in the

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Arctic communities. Many have stressed that the Arctic communities must be recognized as right-holders and be consulted for any projects related to the Arctic. In addition, partnerships between regional bodies and Arctic communities are necessary to allow development to be beneficial to both parties and to protect the natural environment. 5. Evolution of Arctic Ocean governance: Governance in the Arctic Ocean has evolved to management of human use that may impact the Arctic marine environment. Another issue that was discussed is if the Arctic will continue to be a zone of peace or of conflict. Experts were concerned about the NSR and its potential in the future and whether the Arctic will continue to be a zone of peace. Other issues such as maritime safety and environmental protection were also raised. Experts from various countries, such as Canada, China, Japan, Russia, South Korea, and USA and experts from the indigenous groups, IMO, and other important NGOs offered their viewpoint and future recommendations about the findings. In summary, international cooperation was the main theme and methods to promote collaboration must be through informal forums, such as the NPAC.

New initiatives As cooperation between the Arctic and non-Arctic states expanded, suggestions at the NPAC were made to build a regional, informal cooperative research community among the North Pacific states in order to contribute to regional prosperity and sustainable Arctic development. Thus, in 2014, the Korea Maritime Institute proposed the NPARC to Chinese and Japanese research institutes. The main objectives of NPARC are as to encourage regional interdisciplinary research on emerging challenges and opportunities in the Arctic and to communicate and share regional research outcomes for capacity building. To enhance cooperation on various levels such as forums,

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seminars, and joint research related to the Arctic among members, is also an objective. In March 2014, experts from 13 research institutes and universities in China, Japan, and South Korea were invited to participate in the first NPARC seminar. The one-day seminar consisted of presentations regarding the issues faced in the Arctic and ended in a group discussion on the future of the NPARC. Major consensus made in the discussion was the agreement that all participating organizations would support the NPARC as a regular meeting among academic organizations in the region and also designate focal points in each organization in order to set up the basic guideline of NPARC. In addition, all participating members have agreed to have the next seminar in China. Future challenges The NPAC and the newly formed NPARC will be facilitated to promote cooperation and strengthen the links between the Arctic and North Pacific Asian region. Even though many experts from the observer states attend and understand their limited opportunities when engaging in Arctic affairs, members of the Arctic Council and the eight Arctic states have acknowledged the importance of nonArctic states when discussing the emerging issues in the Arctic. Nevertheless, challenges still exist and alternatives must be considered to improve the situation. The following challenges and implications must be examined further: 1. Business investment in the Arctic: Who are the investors — private corporations, state-owned enterprises, or governments? How much of the investment is project-specific vs investment in infrastructure usable for multiple purposes? 2. Understanding national Arctic policies: Does the country have an overall Arctic strategy or policy? To what extent is there a balance between development and environmental protection?

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3. Policies in the Arctic: What are the lessons from past engagements by non-Arctic states in the Arctic Council working groups or subsidiary bodies? Are there examples of bilateral or multilateral cooperation between Arctic states and non-Arctic states in other fora that might provide models or best practices for cooperation in relation to the Arctic? 4. Technology innovations in the Arctic: What new technologies in the areas of future Arctic marine technology and associated research and development are on the horizon that will impact the future of the Arctic? What new technologies in the areas of fiber optic cables and Arctic communications are on the horizon that will impact the future of the Arctic? 5. Indigenous peoples’ response to Arctic development: Can Arctic communities assert and exercise rights in the face of resource development driven by outside private and public actors? Will increased participation in the Arctic Council on the part of observer states dilute or even drown the voices of the Permanent Participants? The overall purpose of this chapter is to acknowledge the importance of the issues and challenges related to the Arctic. With the recommendation of the NPAC, a new informal regional academic network, NPARC, was established that focused on the cooperation between North Pacific region and the Arctic. Although challenges still exist, promoting and enhancing international cooperation among Arctic and non-Arctic states is becoming more efficient and allows communication between members states and observer states in the Arctic Council. References Robert, C., Kang, J.S.C. and Kim, Y.H. (eds.), 2013, The Arctic in World Affairs: A North Pacific Dialogue on Arctic Transformation (2011, North Pacific Arctic Conference Proceedings, August 8–10), Honolulu: The Korea Transport Institute, The East–West Center and The Korea Maritime Institute.

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Young, O., Kim, J.D. and Kim, Y.H. (eds.), 2012, 2012 North Pacific Arctic Conference Proceedings: The Arctic in World Affairs: A North Pacific Dialogue on Arctic Marine Issues. August 8–10, Honolulu: The Korea Maritime Institute and The East–West Center. Young, O., Kim, J.D. and Kim, Y.H. (eds.), 2013, 2013 North Pacific Arctic Conference Proceedings: The Arctic in World Affairs: A North Pacific Dialogue on the Future of the Arctic. August 21–23, Honolulu, HI: The Korea Maritime Institute and The East–West Center.

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Chapter 16

The Future of the Arctic and the Asian Countries: Concluding Remarks Iselin Stensdal

As the title of this book indicates, the Arctic is changing. A region which for decades was seen as a frozen, inert area of little interest to the outside world, is in reality a dynamic region, where Arctic governments seek to adapt to a larger geopolitical world map. The Arctic is where the great powers Russia and the United States come closest geographically. As Oran Yong mentions in his chapter, after the Cold War and final collapse of the Soviet Union in 1991, the Arctic became geopolitically peripheral. Nevertheless, the 1990s saw the start of several cooperative initiatives, from the International Arctic Science Committee (IASC) in 1990 to the Arctic Council in 1996. In more recent years, the Asian countries’ governments and other Asian actors have grown increasingly interested in the Arctic region and its potential. It is endowed with many important natural resources which can be developed and acts a barometer of climatic change elsewhere: no wonder the region is an ever more frequent item on the international agenda. Addressing the Asian dimension of the Arctic in April 2014, the authors of this edited volume met in Shanghai for the conference The Arctic Future and the Asian Countries, which gathered researchers 265

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and scholars from Arctic and Asian countries. The presentations at the conference and the following discussions focused on three topics. The main topic was governance of the Arctic. This is an issue of particular relevance to the entry of Asian countries to the Arctic region. Defining existing governance mechanisms, identifying gaps in governance and discussing how the Asian states can find their place in Arctic governance were all debated at the conference. Furthermore, the economic prospects of the Arctic are one reason why non-Arctic actors are paying closer attention to developments in the Arctic. At the conference shipping in the Arctic was the most discussed economic activity. Thirdly, the Asian countries were in focus themselves. They share communalities such as a concern for climate change in the Arctic, but are also different in several respects when it comes to their Arctic engagements. At the conference, some speakers described a particular country, while others drew comparisons between two or more. The speakers at the conference and the authors featured in this volume do not represent their respective governments or their official positions. They present their own assessments and opinions, and as the chapters illustrate the evaluations are not always in unison. While the authors come from different scholarly traditions and their approaches in this book vary somewhat, they share a strong foundation in empirically based work. Bringing together scholars influential in their own countries and beyond, this conference was an opportunity for participants to exchange views and opinions, deepen their understanding of each other’s countries, as well as summing up the status quo as per 2014, roughly a year after China, India, Japan, Singapore, and South Korea became permanent observers of the Arctic Council. The publication of this book will bring to the attention of a wider audience the discussions and knowledge shared at the conference, the debates over Arctic governance, the prospects of common Arctic and Asian economic opportunities and also a better understanding of the Asian countries’ Arctic engagement.

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Governance As Oran Yong explains in his chapter, the current mechanisms of Arctic governance include global regimes applicable to the Arctic developed by global organizations, the Arctic Council, place-based management mechanisms, public–private partnerships and finally informal platforms to exchange information. At the conference and in this book, the governance mechanism most in focus was the Arctic Council. It was founded in 1996 as a high-level intergovernmental forum to bring the eight Arctic states together to cooperate and coordinate action on issues of sustainable development and environmental protection. Indigenous Arctic communities’ participation has been strong since its inception. Another feature of the council structure is its working groups, which do much of the scientific groundwork between the biannual ministerial meetings. While other governance mechanisms cover parts of the Arctic, such as the Barents-Euro Arctic Council, the Arctic Council is the only organization created by and for the Arctic countries as a means to coordinate Arctic governance. The council does not address every governance issue possible; historically the main issue areas have been environmental protection and sustainability. A possible extension of issue areas is the Arctic Economic Council, established in 2014 which is intended to bring about more circumpolar cooperation, promote business development in the Arctic, and also bring a business perspective to the Arctic Council. The main debate on Arctic governance at the conference, and reflected in the book, is how the current ‘governance mosaic’, as Oran Young put it, can accommodate the situation of new nonArctic actors adopting a more involved role. Scholars from Arctic countries generally agree that the existing multi-faceted system works well, while scholars from Asian countries are concerned that the current set-up is insufficient. In their respective chapters, Yang Jian, Gong Keyu and Cheng Baozhi call for a more formalized Arctic Council. Yang Jian and Cheng Baozhi see the informal nature

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of the council without a mandate to enforce laws and regulations as a limitation to enforcement, hindering the ability to take on a greater governance role. Gong Keyu warns that not having a systematic and comprehensive legal framework for the Arctic could potentially cause conflict. Addressing this concern, Oran Young in his chapter explains that while it is true that this is a transformative period for the council, turning the Arctic Council into a more formal interregional organization would not be beneficial at this stage. Formalization would freeze the council to a certain time and deprive it of the possibility of adapting to future needs. Its current flexibility and the inclusion of the indigenous peoples are strengths that could be lost in an institutionalization process. As to which areas the Arctic Council should address, Oran Young points to the importance of looking at the characteristic of the issue at hand. He takes climate change as an example. Climate change mitigation requires a global effort, but adaptation to climate change is a regional matter. Globally, the UN Framework Convention on Climate Change (UNFCCC) is the appropriate forum, while regionally, the Arctic Council is suitable. Having around a year’s experience with the Asian countries as permanent observers at the Arctic Council at the time of the conference, their situation was discussed. Kim Jong-Deog at the conference questioned the inclusion of the permanent observers. At a working group meeting he had attended in early 2014, the observers were allowed to express their views for a few minutes at the end only. In his chapter, Yang Jian notes the limitations on nonArctic countries’ participation in the Arctic Council. Suggestions and proposals to the council have to be made indirectly through the Arctic countries. There are also limits to non-Arctic countries’ funding of the council. Olav Schram Stokke notes in his chapter how the observer status is less about political influence, and more an issue of access to information, research networks and key Arctic business and governmental actors.

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With stability, prosperity, and peace as objectives for the future Arctic, it is important to define the appropriate roles Asian governments and actors can fill. Looking specifically at China, Yang Jian in his chapter investigates how China can contribute to regional public goods — the governmental mechanisms and institutions serving a specific region. China has developed the technology systems necessary for aerial, marine, and space monitoring in the Arctic, Yang Jian notes, has a world-class polar research environment and capital resources to invest in developing the Arctic region. NonArctic countries have responsibilities in the Arctic, he also underlines, not just rights derived from international laws such as the UN Convention on the Law of the Sea (UNCLOS). Olav Schram Stokke in his chapter addresses the concern that the increased involvement of powerful Asian states in the Arctic could undermine the Arctic states’ primacy in Arctic affairs. In his assessment, this concern is much over-hyped. The existing international legal mechanisms of UNCLOS and exclusive economic zones (EEZs) support sovereignty and grant littoral states dominance in the economically interesting parts of the Arctic. Oran Yong’s recommendations to Asian states are to be proactive in their relations with the Arctic Council, but without expecting too much in return, and to encourage business development without making it a part of a political strategy. Economic opportunities One consequence of globalization is the necessity of international trade; no country is fully self-sufficient. Around 90% of the world trade is transported by international shipping, and the 50,000 merchant ships operating today.1 Export companies want to reduce transportation costs and cut delivery times to gain an advantage. 1

International Chamber of Shipping, 2013, ‘Shipping and World Trade’. Available at http://www.ics-shipping.org/shipping-facts/shipping-and-worldtrade (accessed on October 16, 2014).

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The possibility of more shipping between Asia and Europe, and between Asia and North America, is currently the economic activity in the Arctic which receives most attention from Asian actors. This was reflected at the conference where three speakers focused directly on shipping in the Arctic. Many other speakers and participants broached the subject as well. At the conference, Shou Jianmin from the Shanghai Maritime University, China, noted the potential for commercial navigation for Asia–European trade via the Arctic, but as of today there is a need of infrastructure, such as a hub in northern Europe to serve the traffic. While there might be possibilities in the future to increase commercial traffic in the Arctic, so far the situation is more sobering. Arild Moe takes in his chapter a closer look at the traffic on the Northern Sea Route (NSR), and shows that before 2009 there were hardly any international transits of the NSR, in part due to the high icebreaker escort fees demanded by Russia. This changed in 2009 when the Russians started offering discounts to attract customers. There have been some examples of international transits since, and in percentages the traffic-increase is large. Actual numbers, however, are still modest. Most transits of the NSR are not international, but take place within Russia. As for commercial actors, according to evidence, Arild Moe writes, traffic on the NSR is occasional, happens at opportune moments, and is neither part of a longer-term investment plan nor is it being pursued as a viable option by shipowners. Fujio Ohnishi’s chapter supports Arild Moe’s assessment: Japanese shipping companies consider the NSR to be less economically viable, at least in a short-term perspective. Another challenge is that much of the commercial navigation on the NSR involves the transport of bulk cargo. It suggests there is not enough return cargo for the transits, making the NSR an even less economically tempting choice, Arild Moe points out. When it comes to shipping and international transits in the Arctic, there are two countries of special importance, Canada and

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Russia. Two of the Arctic sea routes pass through their jurisdictions, the Northwest Passage (NWP) in Canada, and the NSR in Russian waters. Zou Leilei and Huang Shuolin investigate the two countries’ approaches to the management of their respective sea routes in their chapter. The authors consider Russia to be the more aggressive and proactive manager, and faced with a trade-off between economic benefit and sovereignty is more concerned with economy. They support their views by pointing to the building of infrastructure and the previous mandatory piloting fees. Canada gives priority to sovereignty over economic benefit from the NWP because the country has so far yet to build supportive infrastructure for commercial use of the NWP. Accordingly, NSR navigation is more imminent than NWP navigation, they conclude. That the Arctic is a region rich in resources has become a cliché in explanations of why the region matters internationally. In 2008, the US Geological Survey published an assessment of undiscovered, technically recoverable resources in the Arctic. As much as 30% of the world’s undiscovered natural gas and 13% of undiscovered oil could be found in the Arctic.2 This assessment set forth a wave of international attention towards the Arctic region. In the few years since enthusiasm peaked; expectations have become more realistic. The once-anticipated oil boom now seems less likely for a variety of reasons. However, there are still oil and gas-related activities in the Arctic. Zha Daojiong of Peking University, China, spoke at the conference on China’s natural gas industry dynamics and energy demand. A US-style form of energy independence is not possible for China, he noted; China will have to rely on imports. Consequently, cooperation with Russia on the Arctic Yamal LNG project will be important for China to secure its supply of LNG. Arild Moe further explains in his chapter why Russia is pushing for the development 2

USGS, 2008, ‘90 Billion Barrels of Oil and 1,670 Trillion Cubic Feet of Natural Gas Assessed in the Arctic’. Available at http://www.usgs.gov/newsroom/article. asp?ID=1980#.VEEOAsk0-H8 (accessed on October 16, 2014).

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of the Yamal’s LNG production. In June 2013, a deal was struck between Chinese CNPC and Russian Novatek. CNPC has bought 20% of the LNG project and in a subsequent agreement between the Russian and Chinese governments, also of June 2013, the Chinese committed to buy three million tons LNG per year and will also be guaranteed favorable tax conditions. Oil products are moved both ways on the NSR, which suggests that the NSR enables Russian companies to take advantage of price differences in the European and Pacific markets, Arild Moe notes. Of other economically interesting resources in the Arctic, minerals and fish are discussed in this book. More than 30 minerals are extracted in the Arctic, Iselin Stensdal describes in her chapter. The Asian economies in China, Japan and South Korea need to import many of the same minerals: copper, gold, iron ore, lead, nickel, niobium, platinum group metals (PGMs), rare-earth elements (REEs), silver, tin, and zinc, are some examples. So far, however, the companies and governments of these three Asian countries have not shown much active interest in mining in the Arctic. Mineral investments have been made all over the word, with the Asia-Pacific region as the largest investment region, but very little has targeted the Arctic. As such, the Arctic could represent a new mineral resource base for Asian actors, Iselin Stensdal notes. When it comes to fisheries, the littoral states have taken the lead, Njord Wegge illustrates in his chapter. This has not been taken lightly by the other three Arctic states, and the EU has also voiced concern. Consequently, the non-littoral and non-Arctic states will likely be more pro-active in the future, Njord Wegge assesses. In line with this evaluation, Jo Inge Bekkevold in his chapter warns of the possibility of friction arising over fishing in the Arctic. Asian countries What has prompted the interest of Asian governments in the Arctic over the last few years? In his chapter Uttam Sinha makes the point

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that no Asian country is unaffected by the effects of climate change in the Arctic, and Arctic affairs are therefore viewed in this light. The concern for climate change in the Arctic, and its effects on their respective countries is a common denominator for the Asian governments. As for China, like all countries, it pursues its national interests, Jo Inge Bekkevold points out in his chapter. Zhang Pei and Yang Jian describe China’s Arctic interests in their chapter. Understanding climate change and its consequences for China is important, but it is also important to secure energy supplies of oil and gas. China is also interested in the potential of new sea routes. Scientific research in the Arctic helps build knowledge and expertise in China. While there is no Chinese Arctic strategy document, the authors document China’s position as set out in speeches by government officials. China respects the Arctic states’ sovereignty and the current law of the seas. China holds the Arctic Council to be the most important forum for discussing environmental issues and sustainable development in the Arctic, and adheres to the regulations for council observers. Furthermore, when it comes to possible resource extraction and other business ventures, a prudent approach is necessary. Zhang Pei and Yang Jian’s assessment was strengthened at the conference. Present there was also a representative from China’s Ministry of Foreign Affairs. He welcomed the conference, and stated that although China does not have an Arctic strategy document, its position is clear. When it comes to the Arctic, China respects and recognizes the Arctic state’s sovereignty, their sovereign rights, as well as their jurisdiction in the Arctic. India’s interest in the Arctic is explained by Uttam Sinha. He describes in his chapter a fairly long history; India was a signatory of the Svalbard Treaty as it was under the UK in 1920. Today, however, India’s interest is from an ‘ecological’ perspective, predominantly founded on scientific expeditions, research and an

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understanding of the Arctic region’s ecology and climate. However, politics are not unimportant either to India as an active global player. Regarding Russia as its long-standing partner, the RussianSino relationship is of interest to India, for example. Resources and sea routes are also of interest to India, if not in as direct economic terms as for the East Asian countries. Fujio Ohnishi presents the development of Japan’s Arctic policies in his chapter. Going back to the ratification of the Svalbard Treaty in 1920, Japan’s Arctic policies evolved in the 1980s and 1990s to research. In the 2000s, each Japanese ministry involved with the Arctic pursued its own agenda without coordinating with the others. This changed with the 2013 adoption of the Basic Plan for Ocean Policy. Since then the two key areas for Japan’s Arctic policies are research and marine business opportunities. There is still room to expand Japanese policy by the addition of business opportunities on land, Fujio Ohnishi suggests. The small Asian state of Singapore also became a permanent observer of the Arctic Council in May 2013. Chen Gang describes the reason for Singapore’s interest in the Arctic in his chapter. Singapore enjoys a strategic placement in connection to the traditional shipping routes passing through the Malacca Straits. Taking a lesson from history and the decline of Venice whose relevance deteriorated when new trade routes were discovered, Singapore has taken a proactive approach to the Arctic. Chen Gang does not see the future development of sea routes in the Arctic merely a threat to Singapore, but as an opportunity for Singaporean businesses to find new areas of cooperation with Arctic and Asian states. As for South Korea, its government announced in July 2013 its Pan Government Arctic Development Plan. It contains several comprehensive plans and addresses sea routes, energy, and resource

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development in the Arctic. It has four strategic goals: boost Korea’s international Arctic cooperation, strengthen Korea’s Arctic research activities, create a business model for Arctic energy and resource development, and secure legal and systemic grounds for the Korean government’s Arctic policies. As part of the plan the Ministry of Oceans and Fisheries has scheduled test runs of the Arctic sea routes. The Korean government is also planning joint mineral exploration with Greenlandic authorities, after the two signed a memorandum of understanding in 2012. The government would also like to sign memorandums of understanding on resource development with other Arctic countries in the future.3 Most of the speeches at the conference and the chapters in this book ask how the Arctic region and Arctic stakeholders are currently or might be affected by an increase in Asian involvement. But what about the effect on Asian countries? Involvement in various aspects of the Arctic can also serve as an opportunity to deepen cooperative ties between China, Japan, and South Korea, Gong Keyu suggests. As she points out, there are opportunities to enhance trilateral cooperation on the grounds of the three countries’ complementary means of production, human resources, and industrial structures. By seeking cooperation on Arctic opportunities, there is a potential for win–win situations, and strengthening peace and stability, not only in the Arctic, but also in Asia. How have the Asian countries been received so far? Jo Inge Bekkevold explains in his chapter that both the USA and Norway were positive to seeing the Asian countries become permanent observers of the Arctic Council. For a small country like Norway, he argues, welcoming the Asian countries is the best choice. Engaging newcomers early and benefiting from improving relations with the Asian countries, which incidentally also are important trade 3

Yoon, 2013.

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partners, are to the benefit of Norway. Yang Jian addresses in his chapter that China has been met with some suspicion coming into the Arctic. He advises all parties to seek reconciliation, common understanding and interests, rather than hostility. In their joint chapter, Zhang Pei and Yang Jian also discuss this phenomenon where activities by any Chinese actor are viewed with skepticism by the Arctic countries. This concern was also raised in the discussions at the conference by a representative from the China Arctic and Antarctic Administration. Whenever a Chinese company is looking to invest in the Arctic, he said, it is viewed with an unfair amount of suspicion. Japanese or Korean companies do not end up in the spotlight in the same manner, he noted. Iselin Stensdal replied to this observation. It is true that Chinese companies are observed with a keen interest not bestowed on other Asian companies pursuing similar ventures. She put forward that a partial explanation for this uneven following could, in the case of business ventures on resources, be due to the previous less-thanfavorable reputation China and Chinese companies have gained from doing business on resources elsewhere in the world such as in Africa. Justified or not, some might draw analogies between past experiences in Africa and future engagements in the Arctic. As such, the rumored Chinese investments of the Isua iron-ore mine on Greenland has attracted much more interest in the Greenlandic, Danish and Nordic press than the memorandum of understanding with the Korean government has.4 Some Asian observers have suggested in their analyses of the Arctic a form of communal ownership of the Arctic region, Olav Schram Stokke writes in his chapter. The idea has not been well received, not least by Russian representatives. ‘Global commons’ ideas have previously surfaced in the debate over Antarctica, where national claims to sovereignty are contested by other states. In the Arctic, however, the idea has no purchase because sovereignty over the economically interesting 4

See, for example, Lykten, 2012.

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parts of Arctic are not disputed, he explains. These ideas are put forward by individuals, Olav Schram Stokke adds, not by Asian government officials. As such, greater Asian involvement in Arctic affairs should not be view as a risk to the Arctic states. A future of conflict or cooperation? In this book, another issue which stands out and has implications for the Arctic’s future is whether there will be conflict or peace in the region. Cheng Baozhi understands the political climate in the Arctic as partly contentious, and as a venue of struggle between two great powers, Russia and the USA. He speaks of how Russia is virtually alone in the ‘battle for the Arctic’, since the USA has effectively drawn the Nordic countries into its sphere of influence through NATO. Uttam Sinha agrees; despite historically low tensions, the new race for resources makes the Arctic a region latent with contestation and rivalry. Jo Inge Bekkevold, on the other hand, sees the situation differently. The emergence of various governing and cooperation bodies in the 1990s is a foundation for cooperation also in the future. Most territorial disputes are resolved, and those still unresolved are peacefully managed. Most natural resources of economic interest are located in undisputed areas. Historically, there was even collaboration between Norway and the Soviet Union on managing the fish stocks during the Cold War. An arms race in the Arctic would be a dead end for governance, Oran Young noted at the conference. Discussing the Arctic’s future, it is hard to overlook Russia. Jo Inge Bekkevold sees Russia as a key Arctic country, with the possibility to be both a door-opener and a gatekeeper for Asian countries approaching the Arctic. Examples of where Russia has welcomed Asian companies include the Russian–Chinese Rostneft– CNPC deal on oil. However, Russia is also wary of its sovereignty, Bekkevold adds. At the conference Dmitriy Tulupov from the School of International Relations at St. Petersburg State University,

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Russia, spoke of Russia’s relations with China, Japan, and South Korea. Putin, he explained, announced in 2012 at the Vladivostok summit Russia’s intention to cooperate more with Asia. Asian stakeholders are not the only ones looking for new shipping opportunities; Putin had said, it is also in Russia’s interest. The Russian Foreign Policy Doctrine of 2013 stated the necessity of developing the NSR as a key transit route between Asia and Europe. Afterwards, the Chinese COSCO Yongsheng did a trial transit of the NSR in 2013. In March 2013 there was an upstream oil and gas dialogue between Rosneft and Gazprom on one side of the table, and CNPC and Sinopec on the other side. As for Japan, it was talking with Russia on developing shipping early as 1967, Dmitriy Tulupov told the conference. The Korean companies DSME, Samsung and Hyundai produce ice-class vessels, he added, give grounds for Russian–Korean cooperation. While Asian speakers and authors see the potential for conflict lines to emerge and consolidate in the Arctic, there is also another concurrent tendency. Several presenters and authors also emphasize cooperation as an important basis for the Asian countries’ role in the Arctic future. As newcomers to the Arctic, Cheng Baozhi recommends that Asian governments take a lesson from the collaborative mechanisms used by the Nordic countries. One suggestion he puts forward is to expand the existing ASEAN+3 platform with Arctic issues. Given the larger geopolitical differences in Asia, starting cooperation on softer issues such as scientific research and search and rescue capabilities could be a fruitful way forward. Also Gong Keyu suggests in her chapter that the ASEAN+3 platform could be used as a venue to discuss the Arctic. He Jianfeng from the Polar Research Institute of China (PRIC) spoke to the conference about Asian and Asian-Pacific research collaboration. Starting with the Pacific Arctic Group (PAG) under the IASC, the PAG mission is to promote regional collaboration.

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Next, he presented the Asian Forum of Polar Sciences (AFoPS), which was established in 2004 by the Chinese, Japanese, and South Korean polar institutes. This scientific forum has since included India and Malaysia as members, with Thailand as an observer for now, in the pipeline for future membership. Deng Beixi of PRIC spoke of another collaborative effort at the conference. The China– Nordic Arctic Research Center (CNARC) was proposed by the PRIC in June 2013, established in December the same year and as per 2014 held two research conferences, as well as launched a scholarship for exchange between China and the Nordic countries. At the inauguration there were six Nordic member institutes and five Chinese. The aim of the CNARC is to increase awareness, understanding and knowledge of the Arctic and its global impacts, as well as promote sustainable development, both in the Arctic region and for China in a global context. Kim Jong-Deog recaps in his chapter the substance and questions raised at the North Pacific Arctic Conferences (NPAC) from 2011 to 2013, organized by his institute, the Korea Maritime Institute. The aim of the NPAC is to foster a common platform for sharing of ideas and positions in regards to the challenges posed by non-Arctic states’ participation in the Arctic region. Which issues relating to the Arctic region are important to the Asian countries? Three categories of concern stood out at the NPACs. First, the ongoing changes in the Arctic, climatically and consequently economic are influencing the Asian countries. Secondly, the economic aspect includes shipping possibilities. Potential fishing and oil and gas are natural resources are of interest too. Thirdly, the situation demands good governance. One concrete outcome of these areas’ need for attention is the consequent need for more research and research collaboration, to which end the North Pacific Arctic Research Community (NPARC) was established. The first NPARC seminar was held March 2014 in South Korea, with the participation of China, Japan, and South Korea.

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Opening the conference, Fridtjof Nansen Institute Director Leiv Lunde noted that while quite a few things have happened in the Arctic with regard to Asian actors, we are mainly discussing the future. This makes this research different from traditional research, understood as the study of phenomena in the past or present. Later at the conference, Leiv Lunde peered into the crystal ball. Looking towards 2030, he predicted which countries would be most important in the Arctic. He based his projections on indicators of population, geography, levels of economic activity and investments, trading routes, energy supply, science, and Arctic identity. Russia came out on top, with Norway in second place, followed by China, South Korea, the USA and Japan. Whether or not the Asian influence in the Arctic will be this strong by 2030, remains to be seen. What is certain, though, is that there are several platforms through which Arctic and Asian governments can communicate, and Arctic and Asian actors interact. Like the conference, this volume gathers together scholars from different academic traditions and countries, each bringing their own voice and assessments to the table. While it is in the global interest to keep climate change in the Arctic at a minimum and protect Arctic biodiversity and ecology, local Arctic communities still need economic activity to sustain themselves. An appreciation and understanding of each other’s objectives and policies allows to detect common interests and identify future win–win opportunities. References Lykten, L., 2012, ‘China Comes Closer to Greenland’s Attractive Raw Materials’, DR. Available at http://www.dr.dk/Nyheder/Udland/2012/11/02/233704.htm, November 2, 2012 (accessed on October 17, 2014), in Danish. Yoon, S., 2013, ‘Korea Announces Comprehensive Arctic Policies’, Korea.net. Available at http://www.korea.net/NewsFocus/Policies/view?articleId=110561 (accessed on October 17, 2014).

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Index

Arctic ascendency, 186 Arctic Circle, 24, 25, 225 Arctic Climate Change Research Project, 176 Arctic climate system, 226 Arctic communities, 259, 260, 262, 267 Arctic Contaminants Action Program (ACAP), 88 Arctic cooperation mechanisms, 222 Arctic Co-operation Programme, 90, 91 Arctic Council, 16, 18, 25–27, 39–44, 66, 85–89, 176, 177, 184, 189, 195, 199, 204, 222, 223, 229, 234, 241, 256, 261, 265–268 Arctic Council meeting in Kiruna 69, 78 Arctic Council meeting in Nuuk 69

Abe, Shinzo, 178 Adaptation Actions for a Changing Arctic (AACA), 19, 25 Adaptive governance for changing Arctic, 15–32 Aden Gulf, 205 Agreement on Cooperation on Aeronautical and Maritime Search and Rescue, 18, 19,37 Agreement on the Conservation of Polar Bears, 222 Alaska, 159 American Geophysical Union, 198 Antarctic Treaty, 20, 27, 28, 183, 187, 194, 195 Antarctic Treaty–Arctic Council Joint Meeting, 177 Arctic, 186–188, 196–200 Arctic affairs, 41, 95, 252–254 Arctic and non-Arctic countries, interactions between, 35–49 281

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Arctic Council’s 2013 Agreement on Oil Pollution Preparedness and Response, 26 Arctic Council Observer Manual, 43, 44 Arctic Council Secretariat, 89 Arctic countries, 265–280 Arctic Economic Council, 40, 267 Arctic economy, 233 Arctic ecosystem, 222 Arctic energy resources, 257 Arctic Environmental Protection Consultative Meeting, 85 Arctic Environmental Protection Strategy (AEPS), 16, 85–88, 222 Arctic environmental resources, 237 Arctic Environment Research Center (AERC), 173 Arctic Five meetings, 150–153 Arctic Frontiers conference, 24, 29 Arctic governance, 38, 217–235, 244–246, 266, 267 Arctic governance, exclusiveness and inclusiveness of, 39–41 Arctic governance, informal mechanisms, 24, 258 Arctic governance, integration and adaptive capacity, 25–30 Arctic governance mosaics, 19–25 Arctic governance, multi-level, 39, 221–223 Arctic governance programs, 37, 38 Arctic Home in the Vedas, 186 Arctic home of the Aryans, 186

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Arctic laws, 245 Arctic marine living resources, 258 Arctic Marine Shipping Assessment, 58 Arctic Military and Environmental Cooperation, 66 Arctic mineral production, 158–161 Arctic Monitoring and Assessment Programme (AMAP), 88 Arctic navigational channels, 225 Arctic Ocean, 54, 191, 247, 259 Arctic Ocean, governance and ownership, 143–153 Arctic Ocean governance, evolution of, 260 Arctic Oscillation (AO), 197, 198 Arctic Passage, 220, 252 Arctic policies, 175, 196, 239, 240, 262 Asian countries’ Arctic policies, 184 Arctic region, 158, 218–221 Arctic Regional Hydrographic Commission, 174 Arctic regional organizations, 234 Arctic research, p. 176, 213 Arctic Science Summit Week, 230 Arctic seaways and shipping, 18, 124, 125, 222, 225, 259 Arctic sovereign rights, 53–56 Arctic trans-boundary issues, 245 Arctic Waters Pollution Prevention Act (AWPPA), 128, 129, 131, 137

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Arms racing in the Arctic region, 65, 66 Asian countries, 196–200, 265–280 Asian Economic Interests, 203– 215 Asian FDIs, 155, 157 Asian Forum for Polar Sciences (AFoPS), 188, 279 Asian interest for mining in Arctic, 161–166 Asian involvement in Arctic governance, 51–59 Asian stakeholders, 278 ASIAN states’ Arctic stakes, 52, 53 Asia-Pacific Economic Cooperation (APEC), 241 Association of Southeast Asian Nations with China, Japan, and South Korea (ASEAN+3), 241 Atomflot–Yamal LNG agreement, 118 Australian Ironbark Zinc, 162 Baird, John, 149 ‘Baltic Sea Action’-exercise, 100 Barents Euro-Arctic Collaboration, 66 Barents Euro-Arctic Council, 92–95, 267 Barents Euro-Arctic Region (BEAR), 16, 222 Barents Regional Council, 94, 95 Barents Sea, Norwegian fishery resources in, 75

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283

Basic Plan on Ocean Policy, 178, 180, 181, 274 Beaufort Sea, 226 Bohai Sea Economic Circle, 253 Broad-based interdisciplinary approach, 187 Bucharest summit in 2008, 99 Bush, George W., 73 Business investment in Arctic, 261 Cairn Energy, 191 Canada, 41, 128, 157 Canada and Denmark, disagreement over Hans Island, 64 Canada and European Union (EU), conflict between, 38 Canada and the USA, disagreement on Beaufort Sea, 64 Canada’s claim for extended continental shelf, 148, 149 Canada’s First Defense Strategy, 135 Canada’s mandatory-reporting system, 131, 132 Canada’s Northern Strategy, 132, 134, 135 Canadian commercial ship, 125 Canadian NWP vs. Russian NSR, 121–140 Canadian Oceans Act, 131 China, 155, 156, 191, 205, 206, 209, 211, 217–235, 237–254, 269 China, influence of, 18

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284

Index

China as extra-regional country, 45–49 China in the Arctic, 70–73 China Investment Corporation, 162 China National Bluestar, 161 China–Nordic Arctic Research Center (CNARC), 279 China on Arctic issues, 246–250 China participation in Arctic affairs, 48, 49 China–Russia relationship, 185 China’s Arctic policy, 233 China’s economy, 225 China’s foreign-trade transportation, 140 Chinese Arctic expeditions, 226 Chinese government, 228–232 Circumpolar Business Forum, 40 Climate change, 218 Climate change in Arctic, impact of, 17, 18 Climate change mitigation, 268 Clinton, Hilary, 41 CNPC, 70, 272 Cold War, 15, 16, 65, 66, 88, 89, 221, 222, 238, 265 Commercial fishing, 255 Commercial shipping in Arctic Passage, 124, 125 Conference of Parliamentarians of the Arctic Region, 222 Conservation of Antarctic Marine Living Resources, 28 Conservation of Arctic Flora and Fauna (CAFF), 88

b2036_Index.indd 284

Consortium for Arctic Environmental Research, 176 Convention for the Protection of the Ozone Layer, 222 Convention on Conservation of Antarctic Marine Living Resources (CCAMLR), 187 Copper, 159 Da Gama, Vasco, 210 Dalian, 209 Deng, Beixi, 279 Denmark’s claim for extended continental shelf, 148 Department of Ocean Development (DOD), 186, 187 Earth Observation Facilitation Committee, 176 East Asian economies, 205, 211 Eastern Mediterranean, 210 East–West tensions in Ukraine, rise of, 18 Economic benefits to Russia from NSR, 130, 131 Eighth Ministerial Meeting of the Arctic Council, 177 Elkem, 161 Emergency Prevention, Preparedness and Response working group (EPPR), 88 Energy security, 224, 257 Environmental protection, 258 European Commission report on Arctic policy, 97, 98 European Union (EU), 20, 56, 165

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b2036 Asian Countries and the Arctic Future

Index

EU’s Northern Dimension Policy, 96 EU’s Northern Policy and Arctic Policy framework, 95–98 Exclusive economic zones (EEZ), 126, 127, 172, 191, 269 Extended continental shelves, delimitation of, 147–149 Exxon Valdez oil, 193 Factor-endowments theory, 249 Finland, 95, 96, 151 Foreign Policy Doctrine of 2013, 278 Fragile Arctic environment, 234 Free trade agreements, 249 G20, 242 Gandhi, Indira, 186 Global climate system, 226 Globalization, rapid development of, 218 Global science community, 230 Gold, 160 Gorbachev, Mikhail, 173 Greenland, 159, 163 Greenlandic authorities, 275 Greenland Petroleum Exploration Co. Ltd. (GreenPeX), 179 Green Network of Excellence (GRENE), 176 High North, 75, 76 High North Research Centre for Climate and the Environment, 195 Himalaya–Tibetan Plateau, 196, 197

b2036_Index.indd 285

285

2008 Ilulissat Declaration, 54 Iceland, 151 India, Arctic attention of, 183–200 Indian Navy, 195 India’s polar approach, conceptualization of, 188 India’s policy, 194–196 Indigenous communities, 259 Indigenous concerns, Arctic Council and, 56, 57 Indigenous peoples’ response to Arctic development, 262 Informal cooperative research community, 260 Institutions in Arctic region, 66, 67 International Arctic Science Committee (IASC), 16, 173, 222, 226, 265, 278 International community, 222, 234, 252 International Convention for the Regulation of Whaling, 221 International Convention for the Safety of Life at Sea (SOLAS), 22 International Convention on Oil Pollution Preparedness, 222 International Convention on the Regulation of Whaling, 227 International cooperation, 221–223 International Energy Agency (IEA), 189 International Maritime Organization (IMO), 22, 52, 66, 68, 227, 240, 258

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b2036 Asian Countries and the Arctic Future

286

Index

International Northern Sea Route Program (INSROP), 174 International Polar Year, 230 International regimes in the Arctic region, 66, 67 International Seabed Authority (ISA), 145 International use of Northern Sea Route, 107–119 Inuit communities, 259 Investment in Arctic region, 67 Isua iron-ore mine, 276 Japan, 155, 156, 185, 206, 237–254 Japan Agency for Marine-Earth Science and Technology (JAMSTEC), 173, 176 Japan Consortium for Arctic Environmental Research, 176 Japanese shipping companies, 178, 270 Japan Institute for International Affairs, 185 Japan National Oil Corporation, 175 Japan Oil, Gas and Metal National Corporation (JOGMEC), 158, 175, 179 Japan on Arctic issues, 246–250 Japan–Russia Investment Forum, 180 Japan–Russia summit, 180 Japan’s Arctic Policy Development, 171–182 Japan’s National Institute for Defence Studies in 2011, 72

b2036_Index.indd 286

Kalaallit Nunaat Marine Seismic (KANUMAS) project, 174, 175, 179 Kandalaksha, 174 Keppel Corp, 213 Kiggavik uranium project, 157, 161, 162 Kiruna Declaration, 42, 43 Kiruna meeting, 41 Korea Maritime Institute (KMI), 243, 256, 260, 279 Korean government, 275 Korea Polar Research Institute (KOPRI), 243 Korea Resource Corporation (KORES), 157 Kyoto Protocol, 227 Large Marine Ecosystems (LMEs), 23 Li Keqiang, 232 Liquefied natural gas (LNG), 185, 206 Living resources management in high seas of Arctic Ocean, 150–153 Malacca Straits, 204, 214, 247 Malay Peninsula, 204 MARPOL, 22, 23, 137, 222 Medvedev, Dmitry, 100 Migrating maritime species, regulation of, 146, 147 Military-strategic importance of the Arctic region, 65, 66 Mineral investments, 272

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b2036 Asian Countries and the Arctic Future

Index

Mineral production in Arctic region, 158 Mining, Arctic, 155–166 Ministerial Meeting of the Arctic Council in 2013, 42, 43 Ministry of Economy, Trade and Industry (METI), 179–182 Ministry of Education, Culture, Sports, Science and Technology (MEXT), 175, 176 Ministry of Foreign Affairs (MoFA), 172, 176, 177 Ministry of Land, Infrastructure and Transport (MLIT), 177, 178 Mirai, 173 Murmansk Harbour, 92 2008 NATO Loyal Arrow-exercise, 100 National Centre for Antarctic and Ocean Research (NCAOR), 195 National Institute of Polar Research (NIPR), 173, 176 NATO-involvement in Arctic affairs, 38, 99–101 Nerleq oil fields, 179 Nippon Foundation, 174 Non-Arctic actors, 266 Non-Arctic countries’ participation in the Arctic affairs, 44–49 Non-Arctic stakeholder claims, 54 Nordic balance, 99

b2036_Index.indd 287

287

Nordic Council of Ministers, 90–92 Nordic countries’ Arctic Policies’ regional coordination mechanisms, 83–104 ‘Nordic Foreign and Security Policy Cooperation’-report, 101 Nordic maritime-monitoring system, 101, 102 Northeastern Asian economies, 210 Northern Canada Vessel Traffic Services Zone Regulations, 131 Northern Dimension Environmental Partnership’s nuclear safety project, 96 Northern Dimension Partnership in Public Health and Social Well-being, 96 Northern Dimension Partnership on Transportation and Logistics, 96 Northern Fleet, 67, 68 Northern Forum, 16 Northern Sea Route (NSR), 67–69, 107–119, 174, 185, 204, 209, 210, 214, 255, 257, 258, 260, 270 Northern Sea Route (NSR) transit voyages, 2011–2013, 109, 110 North Pacific Arctic Conference (NPAC), 24, 29, 243, 255–262, 279 North Pacific Arctic Research Community (NPARC), 256, 260–262, 279

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b2036 Asian Countries and the Arctic Future

288

Index

North Pacific Coast Guard Forum, 78, 79 Northwest Passage (NWP), 258, 271 Norway and the Arctic, 75–77 Norway’s scientific documentation on extended continental shelf, 147, 148 Norwegian Polar Institute, 173 Novatek, 115, 116 Nunaoil, 175 Nuuk documents, 43, 44 Nuuk meeting, 41 1996 Ottawa Declaration, 22, 23 2010 Operation Nanook, 100 Obama, Barack, 73 Ocean Basic Act, 178 Ocean Policy Research Foundation (OPRF), 174 Oil and gas companies, 194 Oil and natural gas, 212, 255, 258, 259 Organization for Economic Cooperation and Development (OECD), 188 Ottawa Declaration, 229 Ottoman Empire, 218 Outer Continental Shelf (OCS), 145 Pacific Arctic Group (PAG), 243, 278 Panama Canal, 204 Pan Government Arctic Development Plan, 274 Persistent organic pollutants (POPs) Convention, 57, 58

b2036_Index.indd 288

PetrVelyki (Cruiser), 68 Platinum group metals (PGMs), 156, 160, 272 Pogo gold mine, 161 Polar Code, 28, 52, 53, 66, 68, 139, 194, 227 Polar Research Institute of China (PRIC), 123, 124, 278 Polar Shipping Guidelines, 258 Port of Sabetta, 116–118 Post-Cold War era, 32 Potential Arctic fisheries, 259, 279 Potential Arctic shipping, 258 Principles of State Policy of the Russian Federation in the Arctic for the Period up to 2020 and Beyond, 127, 132–134 Protection of the Arctic Marine Environment (PAME), 88 Protocol on Environmental Protection to the Antarctic Treaty, 188 Public–Private Coordination Meeting, 178, 179 Public–Private partnerships in Arctic governance mosaic, 23 Putin, Vladimir, 68, 126, 133, 149 1990 Regulations for Navigation on the Seaways of the Northern Sea Route, 130 2013 Rules of Navigation in the Northern Sea Route Water Area, 138 Rare-earth elements (REE), 156, 157, 160, 165

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b2036 Asian Countries and the Arctic Future

Index

Regional fisheries management organizations (RFMOs), 147 Regional governance, 221 Regional public goods in Arctic governance, 36–39 Regulations on Prospecting and Exploration for Polymetallic Sulphides, 193 Resources in the Arctic, 64, 65 Rosneft–China National Petroleum Corporation (CNPC) deal, 70 Rotterdam, 209 Royal Dutch Shell, 191 Rules of Navigation in the Water Area of Northern Sea Route, 126, 133 Russia, 100, 174, 185, 190, 193, 195, 196, 252, 265, 270, 271 Russia and Canada, 41 Russia and the Arctic, 67–70 Russian domestic law, 126, 127 Russian military in the Arctic, 126 Russian ports, 110, 111 Russia’s claim for extended continental shelf, 148 Russia’s Coast Guard, 73 Russia’s economic structure, 53 SAR agreement, 28 Saudi Arabia, 209 Scientific Committee on Antarctic Research (SCAR), 187 Severny Zavoz ‘Northern deliveries’ program, 110, 111 Ship and Ocean Foundation, 174 Sichuan Xinye Mining Investment Co., 162

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289

Singapore, 203–215, 274 Singapore Maritime Institute, 213 Sino-Russian agreements, 69–70 Sino-Russian relations, 190 ‘Snow, Water, Ice, and Permafrost in the Arctic’ report, 181 ‘soft-cooperation’ mechanisms, 246 South Korea, 155–157, 206, 207, 237–254, 274 Sovereign rights in the Arctic, 53–56 Soviet maritime doctrine, 66 Spitsbergen Treaty, 46, 47, 186, 221, 226 Standing Committee on Antarctic Logistics (SCALOP), 187 Stockholm Convention on Persistent Organic Pollutants, 28 Straits of Malacca, 209, 211 Sub-regional cooperation community, 253 Sub-regional governance mechanisms, 221 Suez Canal, 204, 205, 209 Sumitomo Metal Mining Company Ltd., 161 Sustainable Development working group (SDWG), 88 ‘Sustainable European Northern Policy’, 98 Sweden, 151 Technology innovations in Arctic, 262 Technology-intensive industries, 249

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b2036 Asian Countries and the Arctic Future

290

Index

Territorial disputes in Arctic, 63, 64 Territorial waters, 172 The High North — Visions and Strategies, 83 Tibetan glaciers, 197 Tibetan Plateau, 198, 199 Tilak, Lokamanya, 186 Trade and investment in Arctic region, 67 Trans-Arctic shipments via Northern Sea Route (NSR), 107, 108 Trilateral cooperation on Arctic issues, 242–244 Tulupov, Dmitriy, 277, 278 Tumen River Delta–Japan Sea Rim Economic Circle, 253 1995 UN Fish Stocks Agreement, 144, 146, 147 UN Commission on the Limits of the Continental Shelf (CLCS), 147, 148 UN Convention on Law of Sea (UNCLOS), 21, 22, 46, 47, 54–56, 66, 68, 97, 128, 143–147, 191, 222, 226, 227, 231, 241, 269 UN Fish Stocks Agreement, 152 UN Framework Convention on Climate Change (UNFCCC), 227, 241, 268 Unimmak, 179

b2036_Index.indd 290

United States and the Arctic, 73–75 Uranium, 157 US–China Dialogue on the Law of the Sea and Polar Issues, 75 US European Command, 74 US Geological Survey, 205, 219, 271 US Geological Survey’s World Petroleum Assessment of 2000, 64, 65 US Northern Command, 74 US Pacific Command, 74 Waterways administration from military-strategic perspective, Canada and Russia’s, 135, 136 Win–win opportunities, 250 Working Group of Arctic Research Examination, 176 World Trade Organisation (WTO), 70, 155, 241 Xuelong (Snow Dragon) (ship), 52, 70, 140 Yamal LNG project, 115–118 Yellow River Station, 226, 230 Yellow Sea, 253 Yeo, George, 210 Yongsheng, 209, 278 Zha Daojiong, 271

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