Expanding the EU`s Institutional Capacities in the Arctic Region - External Relations

Image removed.
Cover: © John McConnico

By Roderick Kefferpütz and Danila Bochkarev

Introduction
Climate change is a key factor shaping the contours of international security and policy-making. This is particularly the case in the Arctic region, where studies such as the 2004 Arctic Climate Impact Assessment (ACIA) have forecast temperature rises between 4 and 7 degrees Celsius by the end of this century and climate models are already predicting an ice-free Arctic Ocean during the summer months by 2040 if not earlier – developments which open up a wide range of new opportunities and challenges.

According to the recent U.S. Geological Survey, the region holds significant oil and natural gas reserves. Melting ice cover would facilitate the exploitation of these resources and open up accessto fish stocks and particularly new shipping routes, which promise shorter distances for trade between Europe and East Asia. On the other hand, the melting of the Arctic’s ice cap, while increasing the region’s geopolitical and geo-economic importance, significantly exacerbates its environmental fragility, threatens the traditional way of life of the indigenous population and increases the potential for conflict in the region. It is clear that a melting Arctic ice cap and the resulting rise in sea levels would have serious global environmental, economic, and human security implications.

Besides the Arctic 5 countries (A5) that encircle the North Pole (United States, Canada, Russia, Norway, Denmark and Greenland), the European Union has signalled a clear interest in the region. Commissioners Piebalgs and Borg have both stressed the need to tap the region’s natural resources while the EU’s High Representative for the Common Foreign and Security Policy, Javier Solana, acknowledged the Arctic in his recent report on climate change and international security.

The strategic resources the region holds, together with the confluence of major Arctic powers, risk the emergence of a new ‘great game’. Such a geopolitical race could very well lead to an increased militarization of the Arctic, which current statements by several Arctic governments are already indicating.

In addition, besides the Arctic 5 and the European Union, non-traditional players, such as China and Japan, are also becoming increasingly interested in this region as the former has applied for observer status at the Arctic Council and the latter is funding research into Arctic class tankers.

This briefing paper aims to identify the Arctic’s current legal regime and institutional framework, the issues and disputes affecting the region, as well as the stakeholders and their positions, concluding with a succinct analysis of the situation and a set of recommendations for the European Union.

Legal Overview

The primary arrangement that currently governs the Arctic Region is the United Nations Convention on the Law of the Sea (UNCLOS), which covers all segments of the ocean space and regulates the area on a large number of issues. Enacted in November 1994, the Convention has been ratified by over 150 countries to date, including four of the A5 countries (with the exception of the United States). UNCLOS is significant because it provides for a delimitation of continental shelf boundaries, with signatories enjoying the right to a 200-mile (~320 km) Exclusive Economic Zone (EEZ), in which they enjoy the exclusive right to resource exploration. Article 234 of UNCLOS also allows signatories to enact special legislation to protect ice-covered waters within their Exclusive Economic Zone. In addition, the EEZ can be extended under UNCLOS if a claimant state can prove that the geological structure of the continental shelf is an extension of its continental platform. The seabed outside national EEZs, on the other hand, is controlled by the International Seabed Authority (ISA), which can sanction exploration and mining.

The fundamental drawback of the UN Convention on the Law of the Sea, however, is its particularly weak dispute settlement regime. Article 298 allows each nation to decline to accept any method of resolution for disputes, such as those surrounding territorial claims. States can therefore avoid an effective dispute settlement mechanism with a binding character that could solve territorial and resource disputes between the Arctic states.

Major Institutional Frameworks
Arctic Council

In 1991 the A5, in addition to Iceland, Finland and Sweden, established the Arctic Environmental Protection Strategy (AEPS) in order to provide a forum for discussion and co-operation as well as to identify the different environmental problems faced by these countries. The AEPS also includes several northern indigenous organisations, such as the Saami Council and the Inuit Circumpolar Conference. The AEPS consists of several working groups and task forces such as the Arctic Monitoring and Assessment Program (AMAP); Emergency, Prevention, Preparedness and Response (EPPR); Conservation of Arctic Flora and Fauna (CAFF); and the Task Force on Sustainable Development.

In order to increase the political relevance of the AEPS, the participating states supplemented it with the Arctic Council, a higher-level forum which is to date the only major intergovernmental forum for the Arctic. The European Commission has participated as an observer on an ad hoc basis in the past but has so far not sought a permanent observer status, which China, on the other hand, has already applied for.

While the Arctic Council is an important body for environmental issues surrounding the Arctic, having developed guidelines for responding to environmental emergencies such as oil spills and co-ordinating and identifying environmental co-operation, it too has some significant shortcomings. As the Arctic Council acts as a forum, it has no binding decision-making powers and members do not have to participate in programmes or issues which are not in their interest. While the Council’s main course of action has been to identify environmental threats and establish guidelines, national governments are responsible for their implementation, which often leaves much to be desired. In addition, the Council lacks an institutional framework as it has no permanent secretariat (the secretariat rotates with the Chairmanship of the Arctic Council), dedicated staff, or fixed budget, being dependent on voluntary contributions. As such, the Arctic Council cannot act as a proper co-operation framework nor can it properly enforce the necessary environmental protection policies or adjudicate territorial and resource disputes.

Barents Euro-Arctic Council

The Barents Euro-Arctic Council (BEAC) was established in 1993 by Iceland, Denmark, Norway, Sweden, Finland, Russia, and the European Commission to foster regional co-operation, defuse environmental (particularly nuclear) threats, and include Russia in multilateral bodies after the break-up of the Soviet Union. BEAC is primarily concerned with promoting economic and social development in the Barents Region. It initiates cross-border co-operation, which benefits from EU regional assistance, and co-ordinates environmental programmes together with the EU in the framework of its Northern Dimension initiative.

Similar to the Arctic Council, BEAC does not have binding decision-making powers and is therefore to a large extent unable to settle disputes or enhance co-operation. In addition, it only includes 3 of the 5 Arctic surrounding states as full members (Canada and the US hold observer status only).

Challenges & Issues

The Arctic region is not only a unique and fragile ecosystem; it is also a complicated web of challenges and new opportunities. Worthy of particular mention are:

  • The Arctic is probably the world’s largest untouched oil and gas reserve. The region may contain up to 25 % of the world’s untapped hydrocarbon reserves; it also has important fish stocks and precious metals. Natural resource abundance creates as many challenges as opportunities: additional continental shelf claims, territorial and resources disputes have already become top political issues, and the exploitation of the Arctic’s hydrocarbon resources is fraught with danger in a region where even the smallest oil spill could cause immense environmental damage.

The effect of global warming on the Arctic region will have a significant impact on human security, both on the regional and global scale.

  •  Not only will the melting of the Arctic’s ice cap affect the local ecosystem and therefore indigenous ways of life, it also leads to a catastrophic rise in the world’s ocean levels endangering small island states and other low-lying areas.
  • By 2020 or even earlier the melting of ice in the High North could open up new strategic summer sea lanes within the Northwest Passage (sovereignty asserted by Canada) and the Northern Route (sovereignty asserted by Russia, but open to international commercial navigation). Currently, operating an Arctic route requires icebreakers and is too costly; the melting of Arctic ice may cut the length of the Europe - East Asia route by 40% and therefore significantly reduce transportation costs. A summer ice-free sea already re-opened discussions on the sovereignty over new routes and the presence of third countries’ warships. In addition, heavier maritime traffic in the Arctic region increases the likelihood of accidents, as well as of invasive species entering the ecosystem through ballast waters.
  • Heavy militarisation, a relic of the Cold War, remains an important challenge for the foreseeable future, particularly in the context of policies pursued by Russia, the U.S. and Canada. The Kola Peninsula, for example, hosts Russian Northern Fleet bases and the North Pole remains a favourite location for U.S. and Russian nuclear submarines due to its strategic proximity to both nations’ territories as well as the technical difficulties of detecting passing submarines. Russia’s decision to start regular air patrols of the Arctic by strategic nuclear bombers fits this current trend. In addition, the presence of nuclear submarines in the region increases the likelihood of radioactive pollution.

Countries & Positions
Canada

Canada’s claims to the Arctic date back to 1909, when Ottawa suspected Inuits of murdering members of the Pearl polar expedition. In order to punish the alleged murderers, Canada extended its jurisdiction and, consequently, staked a territorial claim up to the North Pole. Canada subsequently adopted the Soviet-backed ‘sectoral principle’, thus claiming territory in the triangle formed by the North Pole and the extreme points of the Canadian continental landmass. Canada ratified the UNCLOS Convention in 2003. Both Canada and Denmark disputed the direct geometrical ‘sectoral approach’ and proposed to calculate the share of each state according to the length of its coastal line. The Canadian government has one of the most consistent and pro-active Arctic policies in the region, both on the policy and naval capacity levels. Ottawa was very skeptical regarding the legal consequences of Russia’s July 2007 Polar expedition, responding with massive integrated navy, air force, and army manoeuvres in the Arctic under an operation entitled ‘Nanook 07’, in order to prepare for any future challenges to Canada’s sovereignty in the High North. Ottawa is also planning to build eight armed icebreakers, use a deepwater port near Iqualuit for both civil and military purposes and launch electronic systems to detect submarines passing the Northwest Passage (claimed to be Canada’s sovereign waters) under the ice cap.

Canada’s priorities in the Arctic are not limited to the military and economic protection of its EEZ. Ottawa is also concerned with the disputed status of the Northwest maritime passage. For instance, a number of important international actors such as the EU and the U.S. do not recognise Canada’s sovereignty over these sea-lanes. The unauthorised passage of US civil and military vessels through the Northwest Passage, in particular, has been a latent source of conflict between Washington and Ottawa since 1969. As such, the issue will become increasingly important in the event that the passage becomes ice-free.

In addition, Canada is also very concerned with the protection of autochthon populations and environmental degradation in the Arctic.

Russia

Russia started to show its interest in the High North as early as 1910 when its navy was sent to explore and map the Northern Route. In 1926 the Soviet leadership took a unilateral decision to establish new state borders in the Arctic, declaring 5,842,000 square kilometers of territory between the North Pole, the Bering Straight and the Kola Peninsula as part of the Soviet Union. The Russian Federation ratified the UNCLOS Convention in 1997. In 2001, Moscow made a submission to the UN Commission on the Limits of the Continental Shelf, empowered to take decisions on extensions of the continental shelf, to extend its Exclusive Economic Zone beyond the 200-mile radius. The first claim was rejected and the approaching 2009 deadline has pushed Russia to be more pro-active in gathering new geological data. In summer 2007, Russia sent two expeditions to explore the Lomonosov Ridge, which is claimed to be a natural continuation of Siberia’s continental platform, including a large-scale expedition, headed by Artur Chilingarov, Vice Speaker of Russian Duma and famous polar explorer, in which two mini-submarines descended over 4,200 meters to the ocean seabed at the North Pole and planted a Russian flag.

If Moscow’s claims are accepted, Russia would be able to claim 45 % of the Arctic. Russia, with its seven polar-class nuclear icebreakers including the ‘50 Years of Victory’ (Pyatdesyat Let Pobedy), the world’s biggest vessel of this class, is poised to have a strategic advantage in the Arctic. Moscow recently started to actively use its Arctic capacity to explore the High North.

Russia is determined to use both legal UNCLOS mechanisms and its political/economic weight to increase its EEZ in the Arctic. However, Moscow still has to resolve its limitation disputes with the U.S. and Norway and win its continental shelf extension bid. Such territorial disputes are taken very seriously in the Kremlin. On 17 September 2008, for example, President Medvedev addressed the Russian Security Council with a speech on the protection of Russia’s national interests in the Arctic.

Moscow’s interest in the Arctic is not limited to the development of hydrocarbon and bio-marine resources. Other important issues are the protection and sovereignty of its Northern maritime route, environmental challenges and the importance of the Kola Peninsula as a major Russian navy base.

Norway

The Arctic is crucial to Norwegian security, economic and political interests. The bulk of Norway’s future hydrocarbon production could come from a 176,000 square kilometre disputed area in the Barents Sea or from Spitsbergen’s continental shelf, where Moscow challenges Oslo’s exclusive right to offshore economic activity.

The Paris Treaty (1920) confirmed Norway’s sovereignty over Spitsbergen, but gave other signatories (including Russia) the right to conduct economic activities on the islands. While Moscow claims that Spitsbergen’s EEZ falls under the Paris treaty, Oslo maintained the archipelago’s continental shelf is a natural continuation of Norway’s mainland and imposed an embargo on petroleum exploration in the area – a move openly contested by Moscow.

Norway ratified the UNCLOS in 1996. Therefore it is likely that Russia and Norway will reach a compromise on the Barents Sea disputed sector if the UN Commission on the Delimitation of the Continental Shelf recognises Russia’s claim to extend its EEZ, since a bilateral agreement is necessary to accompany the deliberations of the UN Commission. Norway’s StatoilHydro holds a 24 % stake in the super-giant Shtokman field, which has reserves estimated at 3.7 bcm of natural gas and 31 million tons of gas condensate – a strategic position which makes a ‘Barents compromise’ more likely in the mid-term future.

Oslo and Moscow also have a good co-operation record in managing fishing stocks: an interim agreement signed in 1978 divides 50:50 haddock and cod quotas. Nevertheless, some disagreement persists in relation to over-fishing in Spitsbergen’s EEZ, and the use of forbidden nets by Russian boats. Norway also sees Russia as the major polluter in the Arctic (including military nuclear waste), with environmental disputes even leading to spy scandals in the 1990s.

United States of America

Washington’s first legal claim for the Arctic seabed between the North Pole and Alaska’s coastline dates back to 1924. In 1973, the U.S. National Petroleum Council published a report assessing the effects of the Law of the Sea on the American Petroleum Industry and supporting ratification of the Treaty in an attempt to influence UNCLOS negotiations. Some of these recommendations were reflected in the final version of the UNCLOS. The Treaty ratification was almost unanimously supported by the U.S. oil and gas sectors alongside the Pentagon and the Executive Branch. Despite strong industry support, however, United States legislators strongly objected to the jurisdiction of the International Seabed Authority, citing concerns over the limits it can place on Washington’s freedom of action.

However, in 2007 the Executive Branch launched a new pro-UNCLOS ‘offensive’. In May, President Bush called on the U.S. Senate to ratify the Treaty, while in July, the legal adviser to the Secretary of State, John Bellinger, did not exclude the possibility of Washington sending a request for the extension of its EEZ by up to 965 km north of the Alaskan coast after UNCLOS ratification. Richard Lugar, Chair of the Senate’s Foreign Relations Committee, supported the White House initiative. Lugar argued that the U.S. should be present at the future negotiations and should prevent Russia from pressing its claims ‘without an American at the table’. In August, the U.S. Senate, without having ratified the UNCLOS, decided to pass a bill giving an additional 8.2 billion US dollars to the U.S. Coast Guard and increasing the number of officers and soldiers. The administration also decided to boost its Arctic navigation capacity by modernising two existing polar-class icebreakers and building two new ones. The Arctic holds an important place in the energy/environmental domestic policy debate regarding the possibility of removing a ban on the exploration of oil reserves off the coast of Alaska. The High North remains a place of security tensions with frequent encounters between Russian and U.S. nuclear submarines.

Denmark

In August 2007 Denmark send a polar expedition to gather evidence that the Lomonosov Ridge is a continuation of Greenland. This was further strengthened in 2008 by new research from Canada which indicated that the Arctic underground is connected to both Greenland and Canada itself. With this new information, Denmark will be able to claim an additional 200,000 sq km in the Arctic Ocean. This recent information is of interest as Denmark and Canada have contradicting claims surrounding the area, and this new Canadian research could be the beginning of working towards a compromise. Nevertheless, Canada and Denmark continue to have an outstanding dispute over Hans Island, a small uninhabited barren knoll that is located between Ellesmere Island and the northwest tip of Greenland.

While Denmark is adamant in staking its Arctic claim, it is one of the first Arctic nations to call for greater co-ordination in the region. This it has done by convening an Arctic conference in Ilulissat, Greenland, which was only open to the A5, to the detriment of the other Arctic Council members Sweden, Finland, and Iceland. In addition, Denmark had proposed prior to the conference that the A5 impose a moratorium on the exploitation of resources, similar to the treaty governing Antarctica.

However, Denmark’s link to the Arctic region is contingent upon its relationship with Greenland, a self-governing Danish province which seceded from the EU in a referendum in 1985. This relationship could be weakened after the referendum on further self-rule which is scheduled to take place on 25 November 2008. Greenland is therefore of great importance to Denmark because it gives it legitimacy as an important player in the Arctic region and because Greenland may hold oil and gas deposits equivalent to the North Sea reserves. Conversely, Greenland is, in a multitude of ways, dependent on Denmark and the EU for subsidies as well as international influence.

European Union

The EU does not play a very active role in the Arctic despite its ‘Arctic Window’ under the Northern Dimension Programme promoted by Finland. However, the European Council has recently drawn more attention to the impact of climate change on international security, in particular on the Arctic, where melting ice would create serious security threats and environmental challenges. The ‘Solana Report’ underlined that ‘the EU is in a unique position to respond to the impacts of climate change on international security, given its leading role in development, global climate policy and the wide array of tools and instruments at its disposal.’

This document illustrates Europe’s awareness of new challenges and opportunities in the Arctic, such as the opening of new navigation routes, the exploration of new natural resource deposits and, consequently, of the ‘changing geo-strategic dynamics of the region with potential consequences for international stability and European security interests.’ Brussels is becoming increasingly aware of the need for a more pro-active presence in the region to defend its interests by intensifying dialogue with the relevant stakeholders in the Arctic. The document calls for an improvement in the EU’s research, monitoring and action capacity, and mentions the need for an EU Arctic Policy, but does not go into further detail.

The EU’s international legal and climate change credentials may help the EU to realise one of the key recommendations made by the Standing Committee of Parliamentarians of the Arctic Region to the regional governments and the EU, namely: ‘in light of the impact of climate change, and increasing economic and human activity, initiate, as a matter of urgency, an audit of existing legal regimes that impact the Arctic and (to) continue the discussion about strengthening or adding to them where necessary.’

Analysis & Recommendations

The overview provided above illustrates that climate change is pushing the boundaries in the Arctic region, thereby dramatically increasing the risk of environmental damage as well as the conflict potential over borders, resources, and shipping lanes, which in turn again threaten the region’s unique ecosystem. Simultaneously, it has been identified that although there are certain legal rules and institutions governing the area these are inadequate to deal with the needs a changing Arctic region is facing. There are only soft law legal rules and spectacularly weak dispute settlement regimes and the forums for co-operation, such as the Arctic Council, lack institutional strength and the capability to enforce decisions.

A multilateral binding body governing the Arctic with sufficient institutional authority is needed to entrench co-operation in the fragile polar region on climate change, the environment and the sustainablemanagement of Arctic resources.

While the best regime for the region would be one that mirrors the Antarctic Treaty, with its moratorium on resource extraction for at least 50 years, it is unlikely that such an arrangement will be accepted. This is because energy security and international trade, alongside defence and national security considerations, are agenda-setters and are likely to dispel any proposal for an arrangement in line with the Antarctic Treaty.

A recent meeting of the A5 at Ilulissat, Greenland, strengthens this assessment. In their Ilulissat Declaration the parties stress that there is no need for a comprehensive legal regime. Moreover, the Greenland Summit demonstrates that the Arctic 5 wish to break away from the other members of the Arctic Council (Sweden, Iceland, and Finland), effectively attempting to insulate the region from other interested parties.

Under these circumstances it will be extremely difficult for the European Union to play a leading role in the region. This is not only because the Arctic is being carefully cordoned off by the A5 and the EU’s link to the Arctic via Denmark and Greenland is insubstantial, but also because the area has in the past received scant attention from the EU itself. However, as the Arctic plays a significant role in terms of global environmental stability, it represents in many ways a ‘common good’ that should not be left to the sole responsibility of the Arctic states. Moreover, as global emissions have a direct regional impact on the region, responsibility over the Arctic does stretch beyond the A5 and could be embedded in a global climate change agreement.

  • In this vein, the EU should increase its leverage vis-à-vis the Arctic. This it can do by first and foremost strengthening its institutional capacities in order to deal with Arctic issues. This means establishing a horizontal Arctic Unit in the Commission that can co-ordinate and develop the EU’s interests and Arctic policy between the DGs Environment, Maritime Affairs, Research, Energy, and External Relations. Such a unit based within DG Environment, would be a sensible step in order to avoid negative reflexes that Arctic countries could have were the unit based in the more politically-charged DG’s RELEX or TREN.
  • Secondly, the European Union needs to strengthen its links to the Arctic region. This can be done in several ways. For one, the Union needs to strengthen the relationship with Greenland, which seceded from the EU. The EU should set-up a trilateral commission consisting of Denmark, Greenland, and the European Commission, in order to discuss the ways in which relations with Greenland can be strengthened. This should also be in the interest of Greenland as the EU would lend it significant political clout in any future Arctic negotiations.
  • Furthermore, the EU must seek full membership of the Arctic Council through its memberstates Sweden, Finland, and Denmark. Joining the Arctic Council will anchor the EU more closely into the co-operative frameworks of the Arctic region and could vice versa increase the Arctic Council’s political weight and relevance.
  • In addition, the EU should build a privileged partnership on the Arctic region with Norway, a key player in the Arctic and possibly the most experienced in developing oil and gas fields in this harsh environment.

Entrenching its own position inside the Arctic will be a first step in increasing the EU’s presently only marginal influence in the region. After becoming a greater actor in bodies such as the Arctic Council, the European Union could emphasise UNCLOS Article 123 which calls on all states bordering an enclosed or semi-enclosed sea to co-operate in an ‘appropriate regional organisation’ in order to protect the environment, co-ordinate the conservation and management of resources, and to co-ordinate scientific research policies. The Arctic Council with an enhanced institutional and legal framework should naturally occupy this position.

Concerning an EU Arctic policy, the French and Czech Presidencies, who will have to initiate the preliminary steps, will play an essential role alongside Denmark with its Chairmanship of the Arctic Council from 2009 to 2011. Sweden will also be of great importance with its triple Presidency of the Nordic Council of Ministers in 2008, of the EU in autumn 2009, and of the Arctic Council from 2011 to 2013.

In conclusion, the EU’s leadership on climate change and environmental protection are needed in this fragile area. EU member-states have reiterated their concerns about the impact of climate change in the Arctic at a special session of the UNEP Governing Council in February 2008. The European Union must ensure that any activity in this region is carried out according to the basic precautionary principle that such a fragile ecosystem will not be put at risk and that when in doubt we will choose to forgo those interferences that might endanger the Arctic. The EU can draw on its experience in best-practice sharing, climate security and environmental co-operation measures, such as with the Northern Dimension Environmental Partnership between the EU and Russia which provides a strong international framework backed by adequate financial resources in order to bring solutions to the region’s long-standing environmental problems.

In addition, the European Union must prevent the emergence of a geopolitical ‘great game’ by minimising the risks of an increased conflict potential in the region and by furthering demilitarisation and co-operation measures as much as possible.

The fragile Arctic ecosystem is in urgent need of a comprehensive international body that can properly entrench co-operation on a multitude of issues in the region and ensure that environmental hazards and conflicts are contained. The European Union must step to the plate in order to preserve the common heritage of this unique ecosystem.

About the Authors

Roderick Kefferpütz is responsible for Energy Policy at the EU Regional Office of the Heinrich Böll Foundation, a think-tank and policy network affiliated with the German Green Party. He is a regular commentator on energy security, climate change, and EU-Russian relations in the international and German media, and has authored and edited a number of publications on these issues. Roderick has a degree in International Relations and an MPhil with distinction in Russian and Eastern European Studies from the University of Oxford.

Danila Bochkarev is the Project Manager for the EastWest Institute’s (EWI) Resource and Climate Security project. Prior to joining EWI, Danila was an Inbev Visiting Scholar in EU-Russian relations at Leuven University (UCL/KUL), Belgium, and spent time at DG EXPO of the European Parliament. Danila studied international relations, history, and political economy in Paris (Sorbonne), London (UCL) and Nizhniy Novgorod, Russia. He is the author of a number of publications on energy security/foreign policy and has several academic distinctions, including being a Royal Dutch Shell and French Government scholar. He regularly delivers academic and policy presentations and contributes to media and consulting firms.

The views expressed in this paper do not necessarily represent the views of the Heinrich Böll Foundation or the EastWest Institute.

The authors wish to thank Ralf Fücks, Claude Weinber, Satu Hassi, Benjamin Sturtewagen and Christine Lynch, for their comments and suggestions. The EastWest Institute is preparing a comprehensive study ‘Towards a New International Framework for the Arctic Region: Rebuilding Trust in Cooperative Solutions’ to be published in December 2008.