The Arctic – the New Crossroads between Asia and the West

The Minister based his speech on most of the points
below as well as some slides and maps. Check against delivery.

Introduction

• I am very pleased to be here in Singapore, and to have the opportunity to speak at the renowned S. Rajaratnam School of International Studies on my country’s most important strategic foreign policy priority – the Arctic. I hope to be able to convey to you not only why this is such an overarching priority for Norway, but also why it should be of interest to Singapore – and the rest of Asia.
• Contrary to what some people may think, speaking about the Arctic in Singapore makes a lot of sense. Developments in the Arctic matter to Singapore, a point which is well taken by your government, your academics and your business community alike. I appreciate and welcome the keen Singaporean interest in the Arctic region.
• Coming directly from the ASEM Summit in Vientiane, I am certain (my impression is) that the attention to the Arctic region from Asia will increase. The reason why I say this is mainly based on two observations made in Vientiane:
• Firstly, compared to the regional situation in Asian waters, the legal framework in the Arctic is in place. There is today international consensus that the Law of the Sea applies to the Arctic Ocean.
• Secondly, and perhaps even more important, the political framework equipped to deal with the challenges in the Arctic region is in place: the Arctic Council.
• I will come back to these issues in my presentation and I look forward to hearing your views on the Arctic and what you believe will be the main interests from Asian countries. The outline of my talk is as follows:
  
  
  • The main drivers for our Arctic policy
  • The legal and political framework
  • Some development trends in the region, and its increasing geopolitical significance.
  

Climate change - happening at record speed in the Arctic

• Firstly: the alarming pace of climate change. Scientific institutions from several countries have recently reported that ice thickness in the Arctic is being reduced far more rapidly than previously expected, with ice loss 50 % higher than predicted. The area of the ice cap is now at a record low. Just as worrisome is the fact that the extent of multi-year ice is also diminishing, making Arctic sea ice even more vulnerable to further decline in the summer.

• This is having alarming consequences not just for the Arctic itself, but even more so for other parts of the world. Singapore, as a low lying island state, knows all too well what the effects of melting ice and rising sea level would be.

• The Arctic is not necessarily where the effects of climate change are most severely felt, but it is where they are most easily observed. Hence, it has become a laboratory for studying climate change.


Resources are becoming more accessible

• Secondly: the vast natural resources in the Arctic.

• US Geological Survey estimates that about 22 % of global undiscovered petroleum resources are to be found in the Arctic (13 % of the oil, 30 % of the gas).
• Not all of this is equally accessible. The Arctic is an enormous area, some of which is ice covered all year round. However, other parts, such as the southern part of the Barents Sea, are ice free all year round.

• Hence, the Norwegian oil and gas industry is moving northwards (Snøhvit, Goliat, Skrugard, Havis). 72 of 86 blocks announced in the current 22th licensing round are located in the Barents Sea. Geological surveys are underway in the previously disputed areas. Development of the Shtokman Gas Project has been postponed, but the Maritime Delimitation and Cooperation Treaty between Norway and Russia opens up new opportunities for oil and gas exploration.

• The Barents Sea and the Norwegian Sea are also among the world’s most productive sea areas and are home to the world’s largest cod stock.

• The Barents region is also Europe’s leading mineral producing region, with a huge untapped potential.  


Russia as a major determinant in the development in the Arctic

• Thirdly: our relationship with Russia has been influential in shaping Norwegian Arctic policy. Russia is by far the leading Arctic state – in terms of territory, resources and activities. 41 % of estimated undiscovered Arctic oil and 70 % of estimated Arctic gas. Half of the Arctic coast line.
  
  
• Norway and Russia have enjoyed peaceful coexistence for a thousand years. In a historical perspective, the Cold War was a parenthesis (albeit an important one). Since its end, our bilateral relations have come to be characterised by mutual trust, with many points of contact and increased cooperation.
  
  
• At the same time there are some challenges. Russia’s internal development (democracy, rule of law, civil society, corruption).
  
  
• However, Russia will continue to be a key Arctic player, and is increasing its focus on and capacities in the region (Northern Sea Route, search and rescue centres, Border Guard/Coast Guard services, Arctic brigade). Hence, will continue to be a focus for Norwegian Arctic policy – and indeed for other countries with interests in the area.


Legal framework in place

• Let me now move on to the legal and political framework for the region.
  
  
• In the early phases of Norway’s High North policy we often encountered the notion of a “race for the Arctic”. However, this does not reflect the facts. The Arctic, as opposed to the Antarctic, is an ocean surrounded by land, where the Law of the Sea and the littoral states’ sovereign jurisdiction prevail.
• This is well understood in Singapore, a littoral state in its own right, as well as a major port and flag state, which places great importance on international maritime law, including the Law of the Sea.
• There is today international consensus that the Law of the Sea applies to the Arctic Ocean. The Ilulissat Declaration of 2008 was a seminal development. A binding expression of the coastal states’ recognition of their obligations and responsibilities under the Law of the Sea in the Arctic – including their commitment to the orderly settlement of any overlapping claims.

• Hence, the race metaphor is poorly suited to describe the actual situation. No race for the Arctic, if understood as a race between states. I might add that most of the natural resources in the High North are uncontested. All resources known to be commercially exploitable are within areas under coastal state jurisdiction. To the extent that overlapping claims exist, the modern law of the sea, to which regime the coastal states have committed themselves, provides and adequate legal framework for the settlement of such delimitation disputes.

• However, there could be competition between companies seeking to position themselves for economic opportunities in the High North – but again, this is happening within the framework set by the national legislation of the Arctic coastal states. And there could be a sense of urgency in the search for knowledge – about climate change, best practices for responsible economic activity, etc. That can only be a good thing.

Political framework equipped to deal with the challenges

• Another key development is the strengthening of the Arctic Council – the only government-level circumpolar body for political cooperation.

• The Arctic Search and Rescue Agreement of 2011 is an important development – the first legally binding agreement to be negotiated under the auspices of the Arctic Council. Negotiations on a new instrument on oil spill preparedness and response have just been concluded. Hope to be able to sign this at the ministerial meeting in May 2013. Will imply a further strengthening of the Council, together with the establishment of a permanent secretariat in the Norwegian city of Tromsø.

• Another issue of considerable interest in Asia, including Singapore, is the question of admitting new permanent observers.

• There are many good reasons for admitting new observers. Developments in the Arctic have an impact on the rest of the world, as I have just mentioned. Many non-Arctic countries have expertise, experience and knowledge that are highly relevant to the Council’s work. Singapore is a case in point. As a littoral state and a major port and flag state, you have a natural interest in being active in all international maritime forums. You are a multiracial and multi-religious nation and thus have experience of working with diversity that could be relevant to the work of the Arctic Council. You also have niche technology of importance for Arctic shipping.

• Let me be clear: Norway has consistently been in favour of admitting new permanent observers. At the ministerial meeting in Nuuk in May 2011 we reached agreement on a set of criteria for admitting new permanent observers. A positive development.

• One of the requirements for joining the Arctic Council is dialogue between the members and the applicants.

• There are also a range of other regional organisations, such as the Barents Euro-Arctic Council and the Northern Dimension, that promote dialogue and cooperation in the High North. These regional bodies have a two-pronged effect: they promote peace and stability in the region, and they are tools for pragmatic problem-solving in border areas, thereby contributing to the well-being of the inhabitants.
  
  

• To reiterate: We have the legal and political structures needed to meet the opportunities and the challenges facing us in the Arctic. This does not mean that there is no room for improvement. There is still work to be done on improving preparedness, security and response in connection with economic activity in the Arctic. But the fundamental framework for dealing with these issues is in place.


The success of the “classical security policy”

• However, this must not be taken to mean that security policy has no role in the Arctic. On the contrary, it is security policy in a classical sense that has laid the foundation for the stability and peacefulness that today characterises the Arctic.
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• By classical security policy I mean (among other things) a strong emphasis on NATO’s role, moving the focus of the Norwegian armed forces northwards, strengthening our operational capacity in the north. But all this combined with constructive practical cooperation with our Eastern neighbour.
• This increased security presence and visibility in the Arctic is precisely what makes “the new security policy” possible – i.e. focus on environmental challenges and human security and safety. And it is one of a number of factors that contribute to stability and predictability in the region.


The Arctic as a crossroads between Europe and Asia

• The Arctic Ocean is increasingly becoming an ocean that tie together three of the most dynamic continents in the world.
  
  
• A lot of the interest from Asian countries has focused on the possibility for developing new transit routes.
• The expected increase in shipping is mainly related to so-called destination transport within the region and to supply services to the petroleum industry. In a longer perspective, a marked increase in transits through the Northern Sea Route (NSR) is also expected, although this will start from a very low level.
  
  
• Both an increase in the number of transits and in the size of vessels (the first super tanker transit was in 2011). By mid-October this year there were 35 transits through the NSR with one month of the sailing season still to go. This is already more than last year, which was generally regarded as a breakthrough season (34 transits compared with 4 in 2010). DNV estimates that there will be around 480 transits in 2030.
  
  
• Russia has announced its intention to develop the NSR into a major international transit route. New legislation on the NSR signed and expected to enter into effect early in 2013. Also plans to build more search and rescue centres along the route.
  
  
• The advantage of the NSR is the shorter distance (the Rotterdam–Yokohama route is 40% shorter through the NSR than through the Suez Canal), hence saving time, fuel and money.
• However, useful to compare these scenarios to the approximately 18 000 voyages annually through the Suez Canal. The NSR may become an important alternative for certain types of goods, such as LNG and bulk transport (petroleum products, iron ore), but this is less likely for container transport, which requires more precision in terms of sailing time and arrival dates. Climatic conditions, insurance costs, Russia’s demand for ice breaker assistance for parts of the journey and limited search and rescue capacity are other factors.
  
  
• For Singapore, as a littoral state of the Straits of Malacca, I would therefore not be too worried about competition from the NSR. In fact, it might bring other opportunities for your ship and oil rig builders, as has already been demonstrated by the deal for Keppel Offshore & Marine to build two ice breakers for Russia’s Lukoil company in 2006. There will also be greater demand for other ice class vessels, such as ice class rescue vessels and ice class floating storage and offloading units (FSOs).

• As more stringent environmental demands for shipping in Arctic waters come into place with the prospective Polar Code currently being developed by the IMO, Singapore’s green technology sector could also find opportunities in reducing carbon emissions and developing more energy efficient ships.

• Let us see this as an opportunity for Norway and Singapore, two major maritime partners, to continue to lead in the area of green shipping.


Knowledge as the key

• This brings me to another crucial factor in the connection between Asia and the Arctic, namely knowledge.
  
  
• My Government has defined knowledge as being at the very core of our Arctic/High North strategy. The Arctic has an abundance of natural resources. But it is not the resources in and of themselves that is the key to value creation and economic prosperity. It is the knowledge that enables us to understand, to innovate and to act.
  
  
• Norway has world-leading knowledge in fields such as:
  • international maritime law,
  • sustainable resource management, and
  • technology for deep sea petroleum extraction in tough climatic conditions.
    
    
  • But knowledge is not created in a vacuum. The best knowledge emerges in partnerships – with industry, with research centres, with other countries and with regional organisations.
    
    
  • This is where Asia is important. Asian countries such as Singapore, Japan, China, South Korea and India have technology and expertise in areas such as polar and climate research and green growth that is highly relevant and valuable for developments in the Arctic.
  

Dialogue as a tool for increasing knowledge

• Dialogue is another principle of Norwegian foreign policy – in the Arctic just as much as in other areas. Since 2004, dialogues on the Arctic have been initiated with a number of countries.

• These dialogues may take different forms – for example bilateral meetings devoted to the Arctic, the inclusion of Arctic issues in other meeting agendas (as has been the case with our security policy dialogue with Singapore), and public diplomacy initiatives.

• This summer, for instance, we had the pleasure of having your Special Envoy for Arctic Affairs, Mr Kemal Siddique, as our guest on the annual “High North Study Tour” around the archipelago of Svalbard. I am happy to see that he came home safely and is here today.
  
  
• We also see that other countries and organisations, not just in Asia, take an increasing interest in the Arctic. The most notable development over the past seven years is perhaps the increasing attention given to the Arctic by the Arctic states themselves – Russia, the US, Canada, and the Nordic countries. All these actors have formulated specific Arctic strategies/policies in recent years.

• The EU is also increasing its focus on the Arctic. Hence, it becomes important both to expand our Arctic dialogues to new actors and to deepen them with already existing ones.
  
  
• The aim of our Arctic dialogues is twofold: to shape the agenda in the Arctic, position ourselves as a major player and win respect and understanding for our views and interests in the Arctic; but also to increase our understanding of other countries’ positions in the Arctic, both to be better prepared for the emergence of the Arctic as a new geopolitical centre, and to develop concrete cooperation projects.
  
  
• In the case of Asia, the Government has recently allocated funding to a new research project entitled “Asia’s role in the High North”, led by two of Norway’s leading foreign policy institutes (the Fridtjov Nansen Institute and the Institute for Defence Studies).

• The project will look into four dimensions: the interests of China, Japan, the Republic of Korea and India within the fields of security policy, energy policy, polar and climate research and new shipping routes.
  
  
• These are crucial issues for the future development of the Arctic, but knowledge is sparse as Asian ventures into the Arctic are still at early and formative phases.

• Some examples of recent developments:
  • China has a strong polar research capacity (research station in Svalbard, transit of the “Xue Long”) and commercial interests in the natural resources in the Arctic (mining investments in Greenland)
  • Japan, the Republic of Korea and India are building up their polar research infrastructure both in the Arctic and the Antarctica and are investing more in research on the NSR.
  • All over Asia seminars such as this one, devoted to the development in the Arctic, are appearing.

• What does this newfound interest means for us as an Arctic state? And what do developments in the Arctic mean for Asia?
  
  
• In order to answer these questions satisfactorily we need new partners and new arenas. Events such as this seminar are important in further enhancing our knowledge and understanding. Situated as it is between powerful regional neighbours, Singapore is, in addition to being an important partner in its own right, also an important meeting place with a view to understanding developments in the region. I look forward to an engaging discussion. Thank you.