By Alex Binkley

The Yong Sheng, a non-descript looking Chinese freighter, and the hulking Danish ice-strengthened bulk carrier Nordic Orion have brought the debate about commercial shipping in the Arctic to the forefront.

With controversy raging on how much the Arctic ice cap melted this year and the International Maritime Organization plodding along in the development of its Polar Code, the Yong Sheng, owned by COSCO, transported a cargo of heavy equipment and steel to Rotterdam from Shanghai in 35 days during August and early September via the Russian Northeast Passage. It was the first non-Russian ship to complete the passage between Asia and Europe. A comparable trip through the Suez Canal would have taken about 48 days.

The 75,600 tonne Nordic Orion took on a load of coal in the port of Vancouver in early September and set out for Finland through the trickier Canadian Northwest Passage under the watchful eye of the Canadian Coast Guard. Three weeks later, it cleared Canadian waters becoming the first commercial ship to complete the Canadian route since the Manhattan in 1969.

John Higginbotham, a former Canadian civil servant turned academic fellow at Carleton University and the Centre for International Governance Innovation, says the events point to the need for Ottawa to develop a more co-ordinated and active approach to Arctic issues. Interest in Arctic shipping will only increase and Canada is far from ready for it.

The Yong Sheng concluded its voyage at about the same time Higginbotham outlined his proposals to a meeting of the Ottawa chapter of the Chartered Institute of Logistics and Transportation in North America. “There’s a gap between what we should do and we do do,” he said. While Prime Minister Harper has toured the region for the last seven summers, Ottawa’s dealing with matters in the Canadian Arctic lags because ten federal departments and agencies all have a role.

Although the government has named Environment Minister Leona Aglukkaq as Chairwoman of the eight-national Arctic Council for the next two years, it really needs a department devoted to handling Arctic issues, he added. Higginbotham noted that terrorist attacks on ships in the Suez Canal could generate even more interest in shipping in the Arctic although Russia has a big lead over Canada and its Northeast Passage is far easier to navigate than the Northwest Passage. While the Harper government has stressed northern development, it doesn’t have icebreakers to escort ships through its water as Russia does as a money-making venture.

Sweden and Finland both have more icebreakers than Canada while Denmark has built a fleet of modern Arctic icebreakers, Higginbotham pointed out. Canada’s remain on the drafting board leaving the Coast Guard with an aging fleet. Russia has a network of search and rescue stations and 16 ports in its Arctic region while Canada is still talking about it.

Canada’s Arctic policy is based on exerting its sovereignty in the region, especially over the status of the Northwest Passage, improving northern economic development, protecting the fragile Arctic environment and giving northern residents more say in the governance of the region. It still has unresolved boundary disputes with the United States, Russia and Greenland.

Canada is a founding member and first Chair of the Arctic Council established in 1996 along with the United States, Iceland, Denmark, Norway, Sweden, Finland and Russia. At first, the Council served as an intergovernmental forum on the northern environment and research. It has expanded its reach to cooperation in dealing with marine pollution incidents and search and rescue in the region.

The Council has granted six countries – China, India, Italy, Japan, South Korea and Singapore – observer status, but has yet to secure its status as a central decision-making body regarding Arctic matters. Ottawa is pushing the Arctic Council to establish guidelines for sustainable tourism and cruise ship operations in the Arctic. The potential for energy and mining developments has generated a lot of interest. U.S. Geological Survey estimates from 2008 suggest that 13 per cent of the world’s undiscovered oil and 30 per cent of undiscovered natural gas reserves are located in the Arctic Circle.

Arctic ice coverage reached a record low of 3.61 million square kilometers in September 2012, about 49 per cent lower than the average amount of ice seen between 1979 and 2000. This year, the extent of the ice melt was not as great but ice coverage was still one of the lowest ever.

Russia has reported that in 2012, 46 ships transporting a total of 1.3 million tonnes used its Northern Sea Route, compared to 34 in 2011. It has issued permits for 393 voyages this year. While the Arctic route offers lower fuel and crew costs, it still poses challenges in navigation, high insurance costs, and a limited shipping season of four months starting in July. The IMO is aiming to complete its Polar Code next year setting technical and operational standards. However, insurance costs for shipping in the region remain an issue for many companies especially in the Northwest Passage where ice is expected to remain an issue.