Features | Diplomacy | Economy | Environment

Asia Eyes The Arctic

The admission this year of six new permanent observers to the Arctic Council was a pivotal moment, in more ways than one.

By Page Wilson for

In May this year, Japan, China, India, South Korea, Singapore and Italy were admitted as permanent observers to the Arctic Council—a forum bringing together the eight Arctic member states (United States, Canada, Norway, Denmark (via Greenland), Russia, Sweden, Finland and Iceland), indigenous Arctic populations, and other interested parties to discuss a range of issues posed in this unique region. Formed in 1996, the Council and its work has been attracting growing worldwide attention in the wake of the record low levels of sea ice coverage documented in the summer months of 2007—a  record which itself was broken last year.

That five of the six new observers to the Council are Asian states reflects two developments: first, the great interest of these states in the commercial opportunities made possible by a transformed Arctic region; and second, the Council’s need to reinforce its position as the preeminent body for the discussion of Arctic matters. Taken together, these developments suggest that the future of Arctic affairs, both inside and outside the Council, is likely to be far more complex and far more influenced by Asian actors than has been the case to date.

The economics supporting the Asian observers’ interests in the Arctic are well known. Increasingly long ice-free periods in the North West Passage (NWP) and the Northern Sea Route (NSR) due to the effects of climate change raise the prospect of a quicker and cheaper transit for Asian products destined for Europe than that currently provided by the Strait of Malacca and the Suez Canal.

In a speech given a few days after South Korea was accepted as an observer, its Vice-Minister for Foreign Affairs estimated that by using the NSR, travel time and distance between the shipping hub of Busan and Rotterdam would be reduced by about thirty per cent – leading him to refer to the new route as the “Silk Road of the Twenty-First Century.” Shipping in the other direction—from Europe to Asia via the NSR—has also begun, with the first Japanese-owned ship carrying Russian iron ore concentrate from the Kola Peninsula to China in 2011. Presently, China is attempting its first commercial transit of the NSR, expecting the journey time between Dalian and Rotterdam to be reduced to 35 days, instead of the usual 48 days. The dangers associated with the traditional Suez Canal route—namely, piracy around the Horn of Africa—only  adds to the appeal of new Arctic shipping lanes, despite the considerable uncertainty that still surrounds their viability in one of the world’s harshest environments.

Should regular, commercial, maritime activity in the Arctic become a reality, then this is likely to be a mixed blessing for global shipping hubs such as Singapore and South Korea. On the one hand, less traffic to these hubs as companies increasingly choose to “go over the top” means the direct economic contribution gained from marine transport will drop. On the other, the expertise these states have in related areas—including port infrastructure management, ship-building, plus offshore and marine engineering—will itself count as a valuable resource, particularly for certain Arctic states with an eye on the burgeoning economic opportunities in the region, but with little up-to-date experience in these areas.

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A second economic rationale underpinning Asian observers’ interest in the region is its resources. The U.S. Geological Survey has estimated that the Arctic contains 30% of the world’s undiscovered reserves of natural gas, and 13% of its undiscovered oil. The same survey suggested around 84% of the Arctic’s estimated resources are located offshore. While global prices for these commodities remain high, there will be a strong incentive to explore recovery options despite the high cost and high risk involved.

Already this year, the China National Offshore Oil Corporation (CNOOC) has submitted a joint application with Eykon Energy to Icelandic authorities for a license to explore and produce oil and gas in Arctic waters. Other recent deals by Chinese companies in relation to oil, gas and mineral exploitation in Russia and Greenland have already been documented. Similarly, the state-owned Korea Resources Corporation (KORES) signed a memorandum of understanding in September of last year with Greenland to pursue joint ventures with respect to rare earth elements, tungsten and cobalt. The cash infusion and know-how provided by Asian states to local resource companies has made it possible for these projects to proceed, given the ongoing budgetary constraints faced by many Arctic and/or European governments in the wake of the global financial crisis. To the extent that such activities become important sources of revenue for Arctic states, then their domestic politics are also likely to reflect the growing influence of the partnering Asian states.

It is more than just economics for both Asian and Arctic states that motivated the Council to admit the five new Asian observers; their admission achieved two other goals as well. First, their acceptance as observers can be viewed as a partial Council acknowledgement of the argument that the Arctic is best considered part of the global commons. From this perspective, the disproportionate impact of climate change on the region—and its social, economic and environmental consequences for the rest of the world—justify discussion and cooperation at the broader international level. The low-lying island state of Singapore, for instance, is especially concerned about the effect of rising sea levels caused by the melting ice cap. Granting the Asian states observer status helps to deflect criticism that the Council is nothing more than an exclusive club for Arctic states more interested in enriching themselves than in effective Arctic governance. In addition, by bringing in as observers rising global powers such as China, India and Japan, the Council aims to boost its legitimacy and standing on the international stage, thus undermining the case for Arctic-related discussions to be transferred to a more inclusive body reflecting a less narrow set of stakeholders. Suggested alternative venues include the UN, or the Arctic Circle, a newly established grouping that will meet for the first time in October.

At the same time, acceptance of the five new Asian observers permitted Council members to gain concrete support for their position that the Arctic is their “backyard” and so properly subject to their sovereign claims under international law. The five Arctic littoral states—the U.S., Canada, Russia, Denmark (via Greenland) and Norway—maintain that most of the Arctic is covered by the law of the sea and the UN Convention on the Law of the Sea (UNCLOS) and thus falls within their “sovereignty, sovereign rights and jurisdiction.” In the event of completing claims amongst the “Arctic Five,” then UNCLOS also provides a mechanism for making a final determination. On this basis, these states reject calls for an international treaty specifically for the Arctic, arguing that it is unnecessary.

Under UNCLOS, the preservation of territorially based rights ultimately protects the special position of the Arctic states vis-à-vis non-Arctic states. As a condition of being recognized as observers to the Council, China, Japan, India, Singapore and South Korea accept both the sovereignty of the Arctic states, and the law of the sea/UNCLOS as the legal foundation upon which the Arctic will be managed. Thus, the admission of the five new observers has helped to shore up backing for existing legal and political approaches to the Arctic which privileges the interests of the Arctic states. This, combined with the fact that the Council’s remit does not extend to security and trade matters, only underlines the extent to which the outlook of the Arctic lies in the hands of individual Arctic states themselves.

Against this backdrop, the admission of the new Asian observers on a permanent basis is an opportunity for more consistent engagement in the Council’s working groups, which tackle a selection of the environmental and technical challenges confronted by the region. Also, greater contact within the Council between Asian observers and Arctic states can be expected to facilitate further bilateral economic cooperation outside the Council. Having lobbied hard, largely on environmental grounds, to be welcomed as observers to the Council, the Asian states are likely to face mounting pressure over how they intend to reconcile this concern with their economic interests in the region—an enormous challenge, which the Arctic states themselves are only starting to grasp.

Within the Council, the influx of the five new Asian observers will also mean for the existing observers greater competition to be heard. Until now, observers such as the U.K., Germany, Poland and the Netherlands have enjoyed consistent and privileged access to the Council from its inception. With more observers participating, the influence of the old observers will be diluted, particularly as the Asian states’ clout intensifies in proportion to the growth of their Arctic economic activities. Moreover, as the Council matures—its secretariat was officially opened in January of this year—the  role observers generally play will also be subject to change. It is too early to predict what these changes might be, but it can be expected that all observers, old and new, will seek to shape the outcome.

The admission of the five new Asian observers will thus be seen as an important moment in the evolution of the Council. Perhaps more significantly, however, by committing the major Asian economies to playing by its set of rules, the Council has achieved a major watershed in the wider battle of ideas in, and over, the Arctic.

Page Wilson is Senior Lecturer in the Department of Defence and International Affairs at the Royal Military Academy Sandhurst, UK. The views expressed in this article are solely those of the Author and do not reflect the official policy or position of the UK Ministry of Defence, or any other department of the Government of the United Kingdom of Great Britain and Northern Ireland.