By K. Joseph Spears
The 21st century has been called a maritime century. A rapidly changing Arctic has brought the world to the Arctic. It has become a global Arctic. Canada is one of the five Arctic coastal states with much of its 244,000 kilometres of coastline in northern waters. Canada recently chaired the Arctic Council which is a multi-governmental agency mandated to foster Arctic cooperation. Since its founding in 1996, it has evolved into an effective international forum with technical depth to address a multitude of shipping and environmental issues. The United States now chairs the Arctic Council and has been very active in developing a policy framework and action plan linking this to massive changes brought about by climate change. It has the highest support of the United States government and the backing of President Obama and his Administration. President Obama was recently in Alaska raising concerns about climate change which is opening access to the region.
The Arctic Council
While the Arctic Council serves as a discussion forum for a variety of non-defence Arctic issues, there are lots of other economic vectors that are occurring in the Arctic that are outside the ambit of the Arctic Council and its members. The Arctic Council has expanded to include many non-Arctic observer nations. In the past, Canada had the benefit of multiyear ice that precluded international activity in or near its waters. Since there was little international marine traffic in the region, access was easy to control through its existing governance regime and minimal infrastructure – we did not have to worry too much about who might be in our waters. But this is rapidly changing. We are seeing increased commercial activity involving a variety of vessel types in our waters including cruise ships, international in transit shipping, adventurers, increased fishing activity, as well as resource development and offshore drilling. For example, the recent drilling off Alaska’s North coast by Shell in the Chukchi Sea would have clearly impacted Canadian coastal waters in the Beaufort Sea, had there been a blowout or other incident. We are not isolated from what happens in the Arctic Ocean, a semi-enclosed sea.
Canada’s new government needs to reboot its Northern strategy which, arguably, should be an Arctic strategy that takes into account international activities and how they impact Canada in a maritime century. We need to think clearly and strategically about these important issues in a maritime century but which also is an Arctic century. Other nations have clear plans, and are doing more than just talking. Here is an overview of what has been happening internationally recently:
The IMO Polar Code
The International Maritime Organization (IMO) has worked to finally have sign-off on the International Code for Ships Operating in Polar Waters (Polar Code) which is a comprehensive document that aims to provide a minimum mandatory regulatory regime for a variety of Arctic shipping activities that would be the responsibility of all Arctic coastal states. As a result, vessels operating in the Arctic Ocean Basin will have to abide by a set of minimum standards in the entire region. The Polar Code does not address the need for Arctic shipping infrastructure which is the responsibility of individual coastal states. This infrastructure is very expensive and which needs to go hand in glove with the Polar Code.
Among other things, hydrographic charting is very expensive but is an important element of managing shipping risk. We saw that with the Finnish ice-strengthened OSV MV Fennica, which was the main icebreaking vessel for Shell’s offshore drilling program off the north coast of Alaska This vessel (with a pilot on board) hit bottom in Dutch Harbor Alaska, in late June as it departed for the Chukchi Sea causing a hull fracture. The vessel was out of commission for almost a month as it underwent drydock repairs in Portland, Oregon. The ship carried a blowout preventer which was a mandatory prerequisite for Shell’s Arctic drilling activities. This incident highlights that there are charting issues even in well-used subarctic ports. This lack of charting could have shut down a time-sensitive $1 billion drilling program.
It appears that the IMO and the Arctic Council are working together to develop various regimes to buttress international shipping governance in the region. The Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic and the International Arctic Agreement on Cooperation on Marine Oil Pollution, Preparedness and Response have been the result of dialogue at the Arctic Council. These two important treaties are solid examples of international cooperation which impact Canada. It is important to note that the Polar Code requirements are minimum international standards, which do not preclude Canada from enforcing more rigorous standards. That was Canada’s approach taken with the Arctic Waters Pollution Prevention Act. Canada led the world in governance of Arctic shipping activities in 1970, which lead to inclusion of article 234 of the ice-covered water’s provisions in the subsequent Law of the Sea Convention.
China—The Snow Dragon
China continues to have a strong interest in the Arctic and has a large non-nuclear icebreaker under construction which will be used for research purposes. Its existing icebreaker Xue Long has seen action in both Polar regions. China recently sent its Navy PLA-N five ship task group through U.S. territorial waters located at the far western end of the Aleutian Islands chain. While this was done in accordance with the Law of the Sea Convention’s right of innocent passage, it highlights China’s continuing increase and capability. China recently underwent joint exercises with Russia in the North Pacific. Clearly China sees the Bering Strait as an international strait and entrance into the Arctic Ocean for transpolar shipping.
China continues to engage in a variety of commercial Arctic shipping activities. It is clearly in China’s interest, given its increasing global trade, to pursue international Arctic shipping routes. COSC bulk carrier Yong Shield made a return voyage along the Northern Sea Route this past year. COSC is bullish on continued Arctic shipping.
Specialized trades like LNG carriers are receiving investment consideration. For example, three major Chinese and Greek shipping firms are in talks to build five vessels worth $1.59 billion that will ship liquefied natural gas (LNG) from the Arctic, Chinese media report. The ships plan to transport gas from the Yamal LNG project, a $27 billion joint venture under construction by Russia’s Novatek, France’s Total group and China National Petroleum Corp.
Russia the Bear
Russia continues to push its Northern Sea Route with increased infrastructure expenditures for search and rescue bases, and capability that is brought to the table by its fleet of forty icebreakers, in addition to icebreaker newbuilds under construction. However, the Northern Sea Route has seen a significant decline of shipping activity over the last year, and it is unclear what is driving this decrease. Is it related to general economic conditions or potential Arctic risks? In addition, Russia continues to buttress its defence capabilities in the region through a variety of means and reorganization including reopening bases and creating new ones.
The German company Bremenports has concluded an agreement with Icelandic authorities and Icelandic engineering company Elfa to conduct a feasibility study of a large, deep-water harbour to facilitate international Arctic shipping and petroleum activity. The harbour is planned to be located in Finnafjörður on the North-eastern point of Iceland, and will have three main purposes: a base port for oil and gas operations in the Arctic, a hub port for trans-Arctic shipping, and a service port for both offshore petroleum activity and Arctic shipping. The plans for the port include LNG bunkering facilities and a search and rescue base. Again, this highlights the investment of non-Arctic nations in the region which Canada needs to pay attention to. For example, Canada’s proposed polar icebreaker CCG John G. Diefenbaker would have to bunker during the shoulder seasons at a port in either Greenland and/or Iceland.
Many non-Arctic nations are developing Arctic policies. Japan recently released its Arctic policy. Asian states, particularly Japan, South Korea, and Singapore, are mostly interested in economic aspects of the Arctic, but will utilize their willingness to promote scientific cooperation for sustainable development in the region. Given that the transpolar route is essentially a high seas route, Canada needs to engage in dialogue and discussion with the user nations. For example, the search and rescue region which it is responsible for under international treaty extends to the North Pole. The SAR treaty comes with very expensive obligations.
Arctic Nation Reboot
Canada needs to look critically at how international issues can affect Canadian interests. As noted, Canada has international obligations for search and rescue and for marine environmental response. There are also business opportunities in the Arctic and service delivery models that we need to consider. Canada’s Northern strategy needs a reboot to encompass an ongoing discussion and dialogue so that we can consider opportunities and global impacts. For example, international shipping in the Arctic will require Canada to have the necessary shipping infrastructure for international voyages that may have no connection with Canada. How will we pay for those investments and expenditures? The cost of owning and maintaining heavy icebreakers is high. Hydrographic charting that needs to be undertaken is a massive and costly task. Only ten per cent of Canada’s Arctic is charted to modern standards.
Canada was the driving force behind the creation of the Arctic Council which has now become a highly effective organization for achieving common results in a rapidly changing Arctic. We need to back up our promises of infrastructure buildouts, maintenance and renewals with action, if we are to avoid losing credibility on the international stage. For many years Canada led the way on Arctic thinking, and we need to reclaim this leadership role. We need to excite a new generation of Canadians about Arctic issues. Canada would be well served by following the lead of the Obama Administration and its views on the future of the Arctic future and its connectedness to climate change.
K. Joseph Spears, a maritime barrister and principal of Horseshoe Bay Marine Group, has been working on Arctic issues for the last 34 years, and has advised the Canadian government on Arctic issues. He helped develop Canada’s contribution to the Arctic Council’s Arctic Shipping Assessment. He can be reached at kjs@oceanLawCanada.com