Finland updates its Arctic strategy
Energy-EnviroFinland, 20 November 2012
With temperatures rising at twice the rate of the rest of the world, the sea ice in the Arctic Ocean is melting faster than projected making it possible to utilize the region’s rich natural resources and opening up the Northern Sea Route. Both of these issues have a direct impact on events in the region’s economy as well as on the global economy. In the Arctic the climatic conditions are harsh and the environment vulnerable. As renewing its Arctic strategy, Finland keeps environmental perspectives at the heart of the process and strengthens international parnerships.
Finland’s Arctic expertise and knowledge can be drawn on in the efforts to understand, adapt to and make use of the ongoing changes.
The measures proposed in Finland’s strategy for the Arctic region, completed in 2010, have been seen for being overly cautious and to a large extent already implemented.
To boost this work, each ministry has appointed officials responsible for Arctic issues. The network is chaired by Hannu Halinen, Ambassador for Arctic Affairs, Ministry for Foreign Affairs of Finland.
“The goal is to bring more concrete and farther-reaching proposals to the strategy and to assess the resources and costs that they entail,” says Halinen, who is Secretary General for the Advisory Board on Arctic Affairs.“We will also hear more extensively from various stakeholders in industry and trade, research institutes, regions and the indigenous Sami people, among others” says Halinen.
“Our vision is for Finland to reconcile its Arctic expertise, business opportunities and environmental considerations in line with the principles of sustainable development.”
“Environmental perspectives are at the heart of our Arctic strategy and are part of every stage of the process,” Halinen stresses.
“The access to the Arctic Ocean holds a central role both in terms of competitively utilizing Finland’s mineral reserves and the opportunities linked with the opening up of the Northeast Passage,” says Halinen.
International partnerships of importance
According to Halinen, when updating the strategy, networking among Finnish actors will become ever more important.
These aims are spearheaded by the maritime industry, under the leadership of Aker Arctic and Arctia Shipping. Other significant actors include the Finnish Meteorological Institute, the Geological Survey of Finland, the VTT Technical Research Centre of Finland, the University of Lapland, the University of Oulu, and the University of Eastern Finland. In addition, the Academy of Finland is launching an Arctic research programme.
“But international Arctic co-operation and widening its scope work in our favour to strengthen our Arctic position,” Halinen says.
Finland has traditionally co-operated with Norway and Sweden, and will reinforce this. Among the items on the agenda is to jointly respond to the demand for competent workforce. For Finland, this means increasing the offering of vocational education.
Finland and Russia embarked on Arctic co-operation in February 2011. Halinen co-chairs the Partnership together with Anton Vasiliev, Senior Arctic Official of the Russian Federation.
The new approach minimizes bureaucracy and assists universities, research institutes and companies in finding one another.
“If we consider the opportunities for exploiting Finnish know-how, Russia is our largest market and will probably remain so. But markets are also beginning to emerge in North America,” Halinen points out.
According to him, efforts have been made to strengthen the Arctic Council of the eight member states and to get Asian countries and the EU on board as observers.
The Arctic Council has considered the network of agreements and jurisdiction covering these areas from an international law perspective.
The United Nations Convention on the Law of the Sea, which was concluded in the 1980s, also largely encompasses the Arctic Ocean. It forms a good basis, but supplementary agreements are needed. This is what the Arctic Council has been trying to accomplish.
The first achievement was a search and rescue treaty. An oil spill preparedness and response agreement is expected to be ready next spring.
The northern actors require that the legal framework be as comprehensive as possible in order to facilitate the operations.
Spotlight on the Northern Sea Route
A voyage from London to Japan via the Suez Canal covering 20,300 km. The distance via the Northern Sea Route is only 13,000 km. By using this alternative, states and private companies would gain tangible economic benefits.
The amount of cargo transported along the Northern Sea Route (NSR) this summer broke the previous record, according to data from Rosatomflot.
The total cargo transported on the NSR was in mid-October already almost 20 percent more than in last year’s season. In all, 35 vessels have transported more than one million tons of different goods between Europe and Asia so far.
According to Halinen, China, India, South Korea, Japan and Singapore are all showing keen interest in the NSR. Asia’s largest merchant marine sails under the Singapore flag. It also encompasses sea traffic from Australia and New Zealand.
“The narrow passageways in southern routes, for instance in the Gulf of Aden and the Strait of Malacca, are considered accident risks. In Somalia there is the risk of pirates, and political threats are growing in the Strait of Hormuz and in Suez.”
“Russia’s legislation must be developed to cover the various traffic alternatives. The traffic monitoring system must also be made more extensive. Naturally we also have to make sure that the fees and tariffs are competitive compared to the Suez route,” says Halinen.
“Container transport generally must arrive within a few hours of the schedule. But nowadays when a ship leaves from Fukushima, it is difficult to predict within how many days it will arrive in Rotterdam. Sufficient accuracy is likely to be achieved by implementing monitoring systems. It is also important to find cargo for the return leg of the vessels,” Halinen stresses.
Transport connections need innovative funding
Infrastructure holds a central role, particularly railway connections. A report on Finnish traffic policy is currently being drawn up with this aspect in mind. It is expected to be finished by the end of this year. It involves major investments.
There are four harbour towns in Norway – Kirkenes, Tromsø, Hammerfest and Narvik – that each have their reasons for becoming Arctic centers.
“Murmansk, but also Arkhangelsk and Belomorsk would like to increase relations with Finland. These harbours are also highly interested in, for example, a Kostomuksha railway line, which would lead directly to Belomorsk. The railroad already exists,” Halinen says.
“The question is whether railway connections could be opened on the Russian side, and there is a lot of talk about finalizing the Salla-Kandalaksha track.”
In terms of airports, the situation is relatively good. There are four international airports in Finnish Lapland. The road network could be improved, but it is passable.
“In order to make progress in infrastructure projects, co-operation and innovative funding are needed,” underlines Halinen.
Exploiting natural resources in controlled manner
Halinen is certain that natural resources in the Arctic Ocean will be utilized. In the coming decades, alternative sources of energy will not be able to completely replace oil and gas.
About 95 percent of offshore natural resources are situated in the economic zones of coastal states. There will be no ‘gold rush’ in the sense of setting off to make claims in free zones.
Challenging Arctic conditions bring their own special characteristics into mining activities and have forced the development of advanced technology to go ahead, even globally. Accidents that occur in the region are more difficult to contain and the consequences much more serious.
“The important thing is to exploit the resources in a controlled manner, to be aware of the risks and to be prepared for them. Companies realize that it doesn’t pay to take the fastest or easiest path,” says Halinen.
Some organizations are saying that we lack effective means of preventing accidents and responding to them. Halinen says such means are coming. “For example, Lamor in Porvoo manufactures remote-control brush systems for collecting oil under ice.”
The Nordic Countries have a consortium of expertise in the minerals industry in place that includes Luleå, in Sweden, which serves as the centre, Tromsø in Norway and Oulu in Finland.
Creating more coherent picture on the EU’s role
The exploitation of Arctic gas resources is part of the EU’s overall energy policy. At the same time, the EU is also a leading global actor in the UN’s climate change negotiations. As a user of the area’s natural resources, it is important to the EU that the exploitation is carried out in a controlled manner.
“The EU does not, however, aim to be a demandeur and control the Arctic area, but rather is interested because of climate change,” Halinen notes.
The EU itself is largely at fault for contributing to climate change as a result of its own industrial activities, but it is also a victim of its effects. China faces much the same dilemma.
“It is important that we not lose sight of this mutual dependency. The EU clearly needs more understanding for its policy,” he stresses.
“There is also an abundance of misconceptions and a lack of information outside the EU. To that end, we are considering setting up an EU Arctic Information Centrein Rovaniemi. That would offer a more coherent picture of the EU’s role in the Arctic region,” Halinen concludes.