Towards an Active Role for the EU in the Arctic?

This excerpt is part of the journal article “The European Union’s Gateways to the Arctic”, which was published in European Foreign Affairs Review 19, no. 1 (2014), pages 101–120. The full article, which is available only via subscription, can be downloaded here.

By Kathrin Keil and Andreas Raspotnik The European Union (EU) is increasingly depicted as an actor with a growing interest towards the Arctic region. In order to shed light on the various possibilities for the EU’s involvement in Arctic affairs, the article aims to have a close look at potential EU ‘gateways’ to the Arctic, subdivided into geographical-institutional and policy links, and their logical interaction. The former aspect looks at the historical, institutional, and legal links between the EU and the three Arctic actors Norway, Iceland, and Greenland. The latter examines concrete steps of cooperation between the EU and these countries in selected, Arctic-relevant policy areas. These include the challenges of environmental protection in general and climate change and sustainable development in particular, and the possibilities of benefitting from newly available Arctic resources such as oil and gas, shipping routes and fishing grounds.

The article highlights different ways of explaining EU interest in the Arctic. One resorts to geo-strategic reasoning, pointing to the EU’s aim to increase or extend its influence and (normative) power to new, emerging regions like the Arctic, which may be of strategic importance in the future, and its grip on important commodities like energy and fish resources. Another, more geo-economicand institutional view, is that the EU reacts to processes of interdependence and globalization, which is especially prevalent in the area of climate change and resources, and aims to pursue its interest though involvement in relevant institutions. Finally, one could argue that the EU has a different understanding or conceptual narrative about the Arctic region. Instead of viewing the Arctic as not more than the sum of national, territorially fragmented nation-states, the EU sees a complex region with effects on the entire planet and demands common and cooperative responses due to shared responsibilities, which could be described as a geo-ecological viewpoint. The combination of the EU’s undoubtedly strong institutional capacities, the weight of its policy competences, its economic power and environmental effect on the region, and its political ties with Arctic states, point to a mix of geo-economic and geo-ecological footholds as the most promising approach to pursue its aim to become a relevant actor in the Arctic.

The article concludes that while the broad reasoning for EU involvement in the Arctic appears conclusive, the concrete approach the EU has taken so far to substantiate its Arctic role is rather elusive. Most importantly, it remains open why an overarching EU-Arctic Policy is necessary in order to substantiate the EU’s policy aims in the Arctic, especially against the background of the strong bilateral and regional ties that the Union already has with various Arctic states. It would seem more appropriate to speak of single EU-Arctic policies. But also here the question remains why a new and overarching EU-Arctic approach is at all necessary and why the existent bilateral and multilateral cooperation agreements with their foci on energy, sustainable development, climate change, environmental protection, transport or infrastructure should not rather be further developed to include an Arctic dimension where appropriate and where this has not happened yet.

Moving Mosaic: The Arctic Governance Debate

By Kathrin Keil Espen Barth Eide seems to have reason to worry. Norway’s foreign minister recently spoke out in favour of admitting new observers to the Arctic Council in order to avoid “the danger of them forming their own club”.[1] However, with the announcement of a new forum called the ‘Arctic Circle’[2] in mid-April 2013[3], the rival club that Eide fearfully anticipated appears to have become a reality.

If the announcement of a rival club was a means to increase the pressure on the eight Arctic Council member states to admit new observers states, then it seems to have been a successful strategy. At the Council’s Ministerial Meeting in Kiruna on 15 May 2013, six new observer states were admitted, expanding the (so far entirely European) observer list by five key Asian states (China, India, Japan, the Republic of Korea and Singapore), and one European country - Italy. The total number of observer states was thus raised to 12 and the number of observer non-governmental organisations kept at 11.[4]

Despite the extension of the observer list, the Arctic Circle is in the world now, and so the question arises: Will this new forum take clout and political relevance away from the established political forum for the region, the Arctic Council? Unfortunately, the debate about the effect of the new institution on Arctic governance too often takes a zero-sum game approach, taking place within the narrow margins of a rivalry concept, which gives short shrift to the complex issue of Arctic governance.

The Arctic Governance Mosaic

The Arctic governance system is already characterised by a multitude of different governance arrangements. This constellation includes bilateral, regional and multilateral/international institutions and regimes. The Arctic Council is but one piece of this colourful mosaic.[5] While many writings on Arctic governance often mention only the Arctic Council and the United Nations Convention on the Law of the Sea (UNCLOS) as relevant Arctic institutions, there exist a multitude of organisations, conventions, and agreements on various levels. To take Arctic fishing as an example, the table below outlines the numerous institutions with rules and regulations for Arctic fishing activities, ranging from broad, multilateral institutions on the UN (especially on the Food and Agricultural Organization (FAO)) level to the numerous regional fisheries management organisations (RFMOs) and bilateral agreements.

Overview of Institutions with relevance
for Arctic fishing activities © Kathrin Keil 

This is not to say that the Arctic fishing regime is perfect, requiring neither improvement nor reform. Not all relevant fishing actors are party to all relevant institutions; not all species are covered in all maritime areas; and especially the multilateral institutions with relevance for the high seas areas of the Arctic Ocean struggle in several ways with severe implementation and compliance issues. The recent initiative to debate a RFMO for the high Arctic Ocean[6] is indicative of the current shortcomings of the significantly fragmented Arctic fishing regime. Nevertheless, beyond the High Arctic Ocean, a regional approach to fisheries management makes sense. This is so because of the differences in climatic conditions, fisheries environments and species and stock distributions around the Arctic, as well as the varying importance of fishing regions for different fishing actors. The notable number of existing RFMOs mirrors this.

Existing institutions, new arrangements such as the Arctic Circle, and institutional changes such as the acceptance of new observer states to the Arctic Council must all be carefully analysed to assess their actual substantive meaning for policies and their effect on peoples’ livelihoods, the state of the environment, and the state of fish stocks, among others. All other talk, especially about one institution ‘stealing’ clout from another, remains shallow if it fails to address the actual issues at stake.

The Arctic Circle: The New Kid on the Block?

Against this background, what does the creation of the Arctic Circle mean for Arctic governance generally and the Arctic Council specifically? Any talk of competition between the Arctic Circle and the Arctic Council must first of all consider the desired spoils of any such competition. These might include pre-eminence in particular issue areas, funding, or political attention. Such a competition might also inadvertently cause redundant work on the part of the two organizations and, accordingly, a waste of resources which could have been avoided had the institutions joined forces, shared burdens, and exploited their synergies where applicable.

First of all, the Council is meant to be a policy forum predominantly for the eight Arctic states with the consultation of the Permanent Participants and the possible contribution of observer states and organisations to the working groups. Even with the admission of new observers, the Council keeps the principle of exclusiveness when it comes to its membership. Further, the Council is currently developing more and more into an umbrella institution for the eight Arctic countries to negotiate legal arrangements among them.

Second, one has to remember that the main purpose and biggest merit of the Arctic Council is to enhance Arctic research, which it does with tremendously detailed and sophisticated reports. At the recent Ministerial Meeting new extensive research reports were added to the already very impressive list of research reports from the Council, such as the Arctic Biodiversity Assessment, “the first Arctic-wide comprehensive assessment of status and emerging trends in Arctic biodiversity”[7], the Arctic Ocean Acidification assessment, the Arctic Ocean Review report, the report on Ecosystem Based Management, and reports from the Adaptation Actions for a Changing Arctic initiative.

The Arctic Circle, in fact, will work to be and do something different from the Arctic Council, at least as far as one can tell from today’s available information about it five months before its official inauguration.

First, the Arctic Circle is designed as a non-profit organisation and not as a political forum primarily for states. It does not intend to provide a forum for state negotiations to produce legally binding arrangements. On the contrary, it has a very inclusive approach to actor involvement, aiming to be a “forum for discussions” and generally an umbrella organisation for “as many Arctic and international partners as possible,” including “a range of Arctic and global decision-makers from all sectors, including political and business leaders, indigenous representatives, nongovernmental and environmental representatives, policy and thought leaders, scientists, experts, activists, students and media”.[8]

Second, while the forum aims to organize “sessions” on “global research cooperation”, there are no explicit research tasks outlined that the institution would adopt and implement on its own.

These fundamental differences illustrate that it makes little sense to talk of a rivalry between the Arctic Council and the Arctic Circle, at least from today’s knowledge of what the Arctic Circle is intended to be. If the Arctic Council loses clout, it will first and foremost depend on the political attention its members devote to it – in terms of actual usage as a forum, research efforts, national representation on ministerial meetings, funding, administrative endowment –and not on the decision by, for example, China, Iceland, and Google to discuss their involvement in the Arctic in a conference or business-like fashion on a regular basis.

The Arctic Council: Stronger and More Inclusive

At the moment, it looks like the opposite development in fact: the Arctic Council appears to gain in importance and the institution shows more activity than ever before, quite independent of the fuss about the admittance of new observers.

Two binding agreements have been negotiated under the auspices of the Council: the 2011 Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic and the 2013 Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic. The Kiruna meeting also saw the establishment of a Task Force to develop an Arctic Council action plan or other arrangement on oil pollution prevention, which will report at the next Ministerial Meeting in 2015.[9]

A considerable number of further initiatives have been announced in Kiruna, showing a highly active Arctic Council. Several Task Forces have been created; one to facilitate the creation of a circumpolar business forum; one to develop “arrangements on actions” to reduce black carbon and methane emissions in the Arctic; and one to work towards an arrangement on improved scientific research cooperation among the eight Arctic States.

Recommendations are planned to integrate traditional and local knowledge in the work of the Arctic Council. The Senior Arctic Officials (SAOs) will work on recommendations to increase awareness regionally and globally on traditional ways of life of the Arctic indigenous peoples and will present a report on this work at the next Ministerial meeting in 2015. The SAOs will further develop a plan to ensure the implementation of the recommendations from the new Arctic Biodiversity Assessment, which was presented in Kiruna, and present a progress report at the next meeting.

The Council has also been strengthened institutionally and politically. At the Ministerial Meeting in Nuuk in 2011, a standing Arctic Council secretariat was established in Tromsø. The Council’s prominence was further raised as Secretary of State John Kerry attended the 2013 Ministerial meeting, marking only the second time that the U.S. administration sent its highest-ranking cabinet member to the biannual meeting.

The member states have also been active in clarifying the different participation categories of the Council. Specifically, the role and admittance of observers has been institutionalised at the 2013 meeting with updated Rules of Procedure and an Observer Manual, which outlined the conditions, rights and duties of prospective and current observers.[10] Crucially, “[t]he 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”.[11]

For clarification, many commentators speak of the category of ‘permanent observers’, which has just been extended. This term has been used to differentiate from ‘ad hoc’ observer status, which for example China and the EU had in the past. However, one has to clarify that the official Arctic documents nowhere use the term ‘permanent’ and thus this category has no official and legal relevance. The term can also be quite misleading, as current and newly admitted observers can have their status revoked. As the Manual reads:

“Observer status continues for such time as consensus exists among Ministers. Any observer that engages in activities which are at odds with the Ottawa Declaration or with the Rules of Procedure will have its status as an observer suspended”.[12]

Finally, there is no automatic right to attend all Arctic Council meetings or access all related documents once observer status has been granted:

“Observers may attend meetings and other activities of the Arctic Council, unless Senior Arctic Officials have decided otherwise. The Heads of Delegation of the Arctic States may also at any time meet privately at their discretion […] Observers admitted to a meeting will have access to the documents available to Arctic States and Permanent Participant delegations, with the exception of documents designated as ”restricted to Arctic States and Permanent Participants””.[13]

The substantive influence of observers is also limited. They have to propose projects through an Arctic State or a Permanent Participant and “the total financial contributions from all observers to any given project may not exceed the financing from Arctic States, unless otherwise decided by the Senior Arctic Officials”.[14]

Observers also have to continuously prove their ability and willingness to actively and constructively contribute to the work of the Arctic Council; they must be accredited before each Ministerial Meeting:

“Observers are requested to submit to the Chairmanship not later than 120 days before a Ministerial meeting, up to date information about relevant activities and their contributions to the work of the Arctic Council should they wish to continue as an observer to the Council.”[15]

Institutional Rivalry? Think Again

In conclusion, against the background of the strengthening and opening of the Arctic Council to new observers and the different portfolios of the Arctic Council and Arctic Circle, it makes more sense to understand the Arctic Circle as an addition of another piece to the Arctic governance mosaic instead of a rival to the Arctic Council. This new piece will have to find its place and purpose among the many different institutions that already exist with relevance for the Arctic, and it should be evaluated according to the merit and added value it brings, especially for the people living in the region. This will, not least, also depend on how the new forum will be perceived by the eight Arctic states. As the above analysis outlines, there is little reason to expect rivalry with the Arctic Council given the substantial differences between the two institutions in terms of scope, membership outreach, and legal outcomes. Espen Barth Eide can thus put his mind at ease.

---

[1] Kim Ghattas, “Arctic Council: John Kerry Steps into Arctic Diplomacy,” BBC News (London, May 14, 2013), http://www.bbc.co.uk/news/world-us-canada-22528594.

[2] The new ‘Arctic Circle’ (homepage www.arcticcircle.org) is not to be confused with an existing New York artist and exhibition group called ‘The Arctic Circle’ (homepage www.thearcticcircle.org).

[3] Deborah Zabarenko, “China, India, Singapore Could Join New Arctic Circle Forum,” Reuters, April 16, 2013, http://in.reuters.com/article/2013/04/15/arctic-circle-idINDEE93E0I420130415.china

[4] See homepage of the Arctic Council, “Observers”, accessible at http://www.arctic-council.org/index.php/en/about-us/arctic-council/observers.

[5] The mosaic metaphor for Arctic governance was first introduced by Oran R. Young, “Governing the Arctic: From Cold War Theater to Mosaic of Cooperation,” Global Governance 11, no. 1 (2005): 9–15.

[6] Andrew E. Kramer, “Accord Would Regulate Fishing in Arctic Waters,” The New York Times (New York, April 16, 2013), http://www.nytimes.com/2013/04/17/world/agreement-would-regulate-fishing-in-arctic-waters.html?_r=0.

[7] Arctic Council, “Kiruna Declaration On the Occasion of the Eighth Ministerial Meeting of the Arctic Council, 15 May 2013” (Kiruna: Arctic Council Secretariat, 2013), 4, http://www.arctic-council.org/index.php/en/document-archive/category/425-main-documents-from-kiruna-ministerial-meeting?download=1757:kiruna-declaration-final-signed-version.

[8] For all quotes see the homepage of the Arctic Circle at www.thearcticcircle.org.

[9] Ibid, 2, 4.

[10] SAO, “Senior Arctic Officials Report to Ministers” (Kiruna: Arctic Council Secretariat, 2013), 78–96, http://www.arctic-council.org/index.php/en/document-archive/category/425-main-documents-from-kiruna-ministerial-meeting?download=1758:kiruna-senior-arctic-officials-report-to-ministers.

[11] Ibid, 93, own emphasis.

[12] Ibid, 92.

[13] Ibid, 94, own emphasis.

[14] Ibid, 95.

[15] Ibid, 88.

Review: Arctic Governance and Japan’s Foreign Strategy

Japanese Icebreaker Shirase

By Aki Tonami The Japan Institute of International Affairs (JIIA), a private Japanese policy think-tank focused on foreign affairs and security issues, released a report on Arctic Governance and Japan's Foreign Strategy. The institute has traditionally had a close relationship with the Ministry of Foreign Affairs, acting as an external advisor. Every year, the Ministry commissions a series of project reports from JIIA containing policy recommendations on specific topics. The most recent report focuses on the Arctic and is based on seven workshops held with selected experts in international law, shipping, defense, and international relations. At present, the report is not available in English and this article summarizes the main content of the report.

The 97-page report, written in Japanese, is divided into 8 Chapters covering various aspects of the Arctic. While the report has not garnered much attention outside of Japan, it stands out as one of the first ‘official’ Japanese reports on the Arctic from an organization closely linked to the government. The Japanese government has not released an Arctic strategy, but the commissioning symbolizes the government’s attempt to gather opinions and understand the topic. There has been ongoing discussion about the Arctic in various business sectors and academic fields, and the report closely mirrors these views. In this regard, the report is not ground breaking but should rather be understood as a comprehensive analysis of the general mood of the current and potential Arctic actors. It includes detailed data and analysis, which will be especially valuable for Japanese policymakers. 

In Chapter 1, Kazuhiro Nakatani, a renowned professor of international law, gives a general overview of the Arctic ’issues’. He contends that for Japan, the most desirable option is decision-making by the Arctic “stakeholders”; if impossible, decision-making by the Arctic Council would be second best. This is a rather frank opinion considering that Japan has been relatively quiet about what happens if the Arctic Council rejects Japan’s application for Permanent Observer Status, and that the Icelandic Prime Minister has recently suggested a new, more open forum to discuss Arctic affairs.

In Chapter 2, Masumi Kimura, who is a principal researcher at the Japan Oil, Gas and Metals National Cooperation (JOGMEC), reminds the reader why Japan needs to participate in energy developments in the Arctic. Energy development projects are highly profitable for any country that has capital and technology, and Arctic resources could be important for Japan’s energy security as well. 

While the overall tone of the report is positive about greater Japanese involvement in the Arctic, the shipping industry is not shy in voicing its cautious stance. The Japanese shipping industry has been skeptical about the economic feasibility of the use of the Northern Sea Route (NSR). Chapter 3, by two people from major Japanese shipping companies, stresses that it is still more expensive to use the NSR for container shipping: “There is no reason to use a shipping route if it does not make economic sense, even if it is the shortest route…shipping companies do not exist to enhance the national prestige.” (p.30)

In Chapter 4, Hideaki Kaneda, a former Vice Admiral of Japan's Defense Forces, discusses the Arctic and Japan’s defense. Kaneda argues that, in the short-run, Japan should promote the use of Arctic sea routes by the international community. In the medium to long run, however, as a maritime nation Japan must strengthen its independent defense capabilities. It is because as maritime and fishery activities in the Arctic eventually increase, such activities in the Sea of Japan will increase as well, and as a result straits such as Soya, Tsugaru and Tsushima will be more congested than they currently are. Further deepening the US-Japan alliance would be useful for Japan as the US is one of the Arctic 5 and considering its nuclear deterrence capability. Kaneda also argues for taking a multilateral approach and expanding Japan’s maritime defense coalition would be necessary.

The following chapters discuss the environmental problems in the Arctic, Arctic governance, and the relationship between Arctic issues and international relations in East Asia, arguing that Japan must closely watch for possible long-term impacts on Japan’s geopolitical environment as a result of changes in the Arctic.

The report concludes with six policy recommendations for the Japanese government:

1. Construct a win-win relationship with Arctic coastal states regarding resource exploration and development;
2. Secure appropriate implementation of UNCLOS;
3. Build a closer cooperation with the United States on Arctic issues;
4. Play a leading role in environmental conservation, using Japan's knowledge and environmental technology;
5. More active Arctic diplomacy;
6. Strengthen the government system for Arctic policy, such as establishing an Arctic Headquarters within the Cabinet Office.

It remains to be seen whether the Japanese government will implement the recommendations in full, but both the commissioning and tone of the report clearly indicate that Japan has finally recognized the political importance of Arctic affairs. There are also real actions moving the country in this direction: Just days before the report was publicly released, Japan took a step towards more active Arctic diplomacy, as recommended in the report, and assigned an Arctic ambassador for the first time.

Aki Tonami is a researcher at the Nordic Institute of Asian Studies at the University of Copenhagen. You may contact her at aki.tonami@nias.ku.dk

The Future of Arctic Shipping

By Malte Humpert and Andreas Raspotnik Arctic sea ice is melting rapidly, and within the next decade the effects of global warming may transform the Polar region from an inaccessible frozen desert into a seasonally navigable ocean. The summer of 2011 saw a record 33 ships, carrying 850,000 tons of cargo navigate the Northern Sea Route (NSR) off Russia’s northern coast. This year’s shipping season may see up to 1.5 million tons of cargo, as Germany’s Alfred Wegener Institute predicts the NSR to be ice-free and passable for ships by early summer.

The North West Passage (NWP), first ice-free in 2007, and the Transpolar Sea Route (TSR) may also open up to shipping traffic over the coming decades. An in-depth assessment of the viability of shipping along the TSR will be published in the upcoming Arctic Yearbook 2012, which will be available from the Northern Research Forum’s website from October 2012. The development of Arctic offshore hydrocarbon resources and related economic activities will also improve the integration of the Arctic economy in global trade patterns. Multi-year ice and the limited seasonal window for trans-Arctic voyages however, will for the foreseeable future remain formidable obstacles to the development of Arctic shipping and its economic viability. Trans-Arctic shipping routes will thus not serve as a substitute for existing shipping lanes, but will instead provide new and additional capacity for a growing transportation volume.

A navigable Arctic Ocean?

Summer ice extent has declined by 40 percent since satellite observation began in 1979, and over the same period sea ice has thinned considerably, experiencing a decline in volume of 70 percent. Studies differ widely in their predictions of when summer sea ice will melt completely. The latest findings suggest that Arctic sea ice may have entered into a new state of low ice cover. A recent article by Valerie N. Livina and Timothy M. Lenton on the bifurcation of Arctic sea-ice cover describes it as "distinct from the normal state of seasonal sea ice variation." Arctic sea-ice may have crossed a tipping point which could soon make ice-free summers an annual feature across most of the Arctic Ocean.

Longer ice-free periods

Sea ice extent observations (1970 to 2007) and forecast (2030 to 2100) 
reproduced using data from the NOAA GFDL model. 
Yearly extent represents an average 80 percent sea ice concentrationn

A new study by the National Aeronautics and Space Administration (NASA) suggests that multi-year ice, which is the oldest and thickest Arctic sea ice and the principal obstacle to shipping in the Arctic Ocean, is disappearing at a faster rate than the younger and thinner ice. The ice-free period along the Arctic’s main shipping routes is expected to increase from around 30 days in 2010 to more than 120 days by the middle of the century. Furthermore, the distribution of the remaining summer ice will not be uniform across the Arctic Ocean. Studies suggest that sea ice will collect and persist longest along the northern flanks of the Canadian Archipelago and Greenland while the central and eastern part of the Arctic will see the most significant decline of ice, further extending the shipping season along the NSR. In 2011 the navigational season along the NSR lasted for 141 days, from early July until mid-November (see figure 1).

Significant obstacles remain

Nonetheless, significant obstacles to shipping remain such as icing from sea spray, wind chill, remoteness as well as their implications for rescue and emergency operations, and the lack of reliable weather forecasts. During the winter and spring months ice conditions along Arctic shipping routes will remain heavy, and the amount of floating sea ice and number of icebergs - a hazard to the safety of marine transport, may increase during the early melt season as more ice floes break apart and drift across the Arctic Ocean.

Shorter sailing distances

Routing shipping traffic through the Arctic allows for shorter sailing distances resulting in shorter trips. Shipping operators can achieve cost savings through a reduction of number of days at sea, energy efficiency improvements due to slower sailing speeds, or a combination of both.

Distance savings along Arctic shipping routes can be as high as 40 percent compared to the traditional shipping lanes via the Suez Canal. Shorter sailing distances allow for considerable fuel cost savings. The reduced number of days at sea allows a ship to make more return trips resulting in increased revenue and potentially greater profits.

Instead of realizing time savings, operators can also adopt super-slow sailing. A vessel traveling from Murmansk to Tokyo can reduce its speed by 40 percent and still arrive in Japan at the same time as a ship sailing at full speed traveling through the Suez Canal. Super-slow sailing can also double a vessel’s energy efficiency performance, resulting in a significant reduction of greenhouse-gas emissions. If a future emissions control framework was to include global maritime traffic, this reduction of emissions could thus also result in significant cost savings.

Economic feasibility of Arctic shipping

Global shipping operations are dependent on three key factors: predictability, punctuality, and economy-of-scale, all of which are currently limited in Arctic shipping. Consequently, the lack of schedule reliability and highly variable transit times along the Arctic shipping routes represent major obstacles to the development of Arctic shipping.

The majority of cargo ships that travel the world’s oceans operate on regular schedules, known as liner service. In total more than 6,000 ships, most of them container ships, follow a set route calling at a number of ports to load and unload cargo, which consequently supplies the concerned country’s hinterland. Profitability can only be achieved with large- scale shipping based on stable and predictable (year-round) operations.The ability to schedule journeys a long time in advance and to guarantee uninterrupted service is considered key for container ship operators. Bulk dry and wet carriers, on the other hand, follow less predictable schedules and their routes depend more on changing supply and demand of less time- sensitive items. Of the four kinds of Arctic voyages undertaken in the Arctic Ocean - destination transport, intra-Arctic transport, trans-Arctic transport and cabotage - trans-Arctic shipping may face the most significant hurdle to becoming part of the global trade patterns.

Draft and beam restrictions

Arctic shipping routes, especially the NSR, are subject to significant draft and beam restrictions. Ships along the NSR must pass through a number of narrow and shallow straits in the Kara and Laptev Sea. The Yugorskiy Shar Strait at the southernmost entrance from the Barents to the Kara Sea follows a channel 21 nautical miles long and 12-30 meters deep. Along the eastern section of the NSR, ships must navigate either the Dmitry Laptev Strait or the Sannikov Strait to pass through the New Siberian Islands and travel from the Laptev to the East Siberian Seas.The eastern approach of the Laptev Strait has a depth of less than 10 meters, restricting the draft of ships to less than 6.7 meters. In addition, Russia’s government only permits ships with the highest ice classification – 1A Finnish Swedish, to sail the route. Currently, only three vessels out of more than 2,000 Panamax ships have that classification.

Arctic shipping infrastructure

A key characteristic of Arctic shipping routes is the limited number of ports of call. According to the Arctic Logistics Information Office, 16 ports, most of them ice-covered for part of the year, are located along the NSR. The port of Murmansk and the port of Petropavlovsk on Russia’s far-east Kamchatka peninsula are considered essential for the development of the NSR. Both ports are expected to serve as terminals and hubs of the NSR. In November 2011 Vladimir Putin announced a major overhaul of the entire Russian transport system with special attention to maritime traffic in the Arctic. Russia plans to build up to 10 emergency centers focused on meteorological and rescue services as well as border patrol along the NSR.The capacity of Russia’s seaports is scheduled to increase 50 percent by 2015 and the country plans to invest 134 rubles (€3.4 billion) into developing maritime traffic over the next 10 years.

The port of Kirkenes, Norway and the port of Vopnafjörður, Iceland may serve as major future Arctic hubs. Iceland’s strategic location at the entrance and exit to the Arctic Ocean and Vopnafjörður’s suitability as a deep-water port with depth up to 70m, may allow development into a transshipment hub. Future development and investment will however, depend significantly on the country’s financial and economic situation and foreign investments. Over the past decade China has continuously increased its economic cooperation with the small island nation and China’s premier Wen Jiabao recently visited Iceland to further strengthen the economic ties between the two countries. A Chinese delegation also visited the Faroe Islands, a small group of islands under the sovereignty of the Kingdom of Denmark, where domestic policy makers have also identified the island’s role in future Arctic shipping as a priority.

Conclusion

Over the past decades the Arctic has witnessed a much faster than anticipated decline of sea ice and the continuation of this trend will transform the Arctic Ocean into a navigable seaway over the coming decades.Yet due to the region’s unique navigational and economic challenges Arctic shipping will, for the foreseeable future, only be cost effective for a limited number of operators.

This article was first published in the 55th Edition of Port Technology International and is republished here with permission. 

Iceland For Sale - Chinese Tycoon Seeks to Purchase 300 km² of Wilderness

by Malte Humpert Huang Nubo, a real estate investor and among China's 200 richest people, put forth his plan to buy 300 square kilometers of Icelandic land to construct an eco-tourism resort and golf course. While the deal has already received preliminary approval from private landowners, it has yet to be approved by the Icelandic government. Mr. Nubo is seeking an exemption to an Icelandic law banning the sale of land to citizens from outside the European Economic Area.

The area in question in the Grímsstadir á Fjöllum region does not have any coastal access. It is however located near potential deepwater ports which raised concerns about geopolitical motives of the land purchase. Opponents also questioned why a tourist resort requires such a large piece of land, roughly 0.3 percent of Iceland's total area. 

The Icelandic interior minister, Ögmundur Jónasson, stated that "China has been very active in buying up land around the world so we need to be aware of the international ramifications." The country's president, Ólafur Ragnar Grímsson, in contrast, hailed the Chinese investment as a sign of "the country’s blossoming ties with the rising Asian power. China and India lent Iceland a helping hand in many constructive ways whereas Europe was hostile and the US was absent." China also recently opened the largest embassy in the Icelandic capital Reykjavík.

According to the Financial Times, Mr. Grímsson, who has been in office for more than 15 years, has developed close ties to China and India promoting Iceland as a future Arctic shipping hub. He visited China on numerous occasions and received more Chinese delegations to Iceland than “the US, UK, Germany, France, Italy and Spain combined."

Iceland occupies a strategic location at the intersection of a number of future Arctic shipping routes and could develop into a hub for shipping between Europe and Asia. Iceland sits near the western terminus of the Northern Sea Route. In addition the Arctic Bridge route from Canada's Hudson Bay as well as a direct Transpolar route would pass near the country's shores. 

Iceland has also struck a deal with China Petroleum Chemical Corp, the country's second biggest oil and gas company, to jointly develop the island nation's geothermal resources and further geothermal technology.

To learn more about the shipping routes and to see the approximate location of Mr. Huang Nubo's land purchase please consult the map below.

View Interactive Arctic Map (beta) in a larger map

NEW Report on EU Arctic Policy

Download the report

The Arctic sea ice is melting rapidly, and within the next decade polar warming may transform the High North from an inaccessible frozen desert into a seasonally navigable ocean. The prospects of exploiting the Arctic Ocean’s rich natural resources and gaining access to vital new shipping routes, particularly between Europe and Asia, have led to increased economic and political interest in the region. Rapid environmental change and the Arctic’s emergent economic potential may challenge the geo-strategic balance in a region where institutions, boundaries, rules, and customary norms have yet to be established or remain weak.                                        

The European Union, as the world’s largest exporter of goods and largest importer of fossil fuel resources, has significant economic and energy security interests in the region. Yet it has failed to respond adequately to the changing political environment. The existing regulatory and governance regime, the Arctic Council, has become inadequate, and given the pace of change it is difficult to see how the Arctic can be managed effectively within this regime.                                                                                                     
This memorandum explores possible alternatives, including developing a new international framework for the region. It also provides policy recommendations on how the EU can best secure its strategic economic and energy security interests—including by incorporating Arctic policy into bilateral treaties.