05.09.2009
Labyrinths of the Arctic Policy
№3 2009 July/September

The North and especially the Arctic have been a priority in
Russian foreign policy since the early 2000s. This is due to many
factors, above all a stronger emphasis on the energy aspect of this
policy. This includes building export pipelines and implementing
transport projects in northern and northwestern Russia, ranging
from the Baltic Pipeline System (BPS), launched in 2001, to the
Nord Stream gas pipeline, which will be laid along the bottom of
the Baltic Sea. Interest in the Arctic increased after the
publication of reports about the enormous natural resource
potential of the region. Those reports sparked an unprecedented
interest in the region among the leading countries of the world, as
well as among major oil and gas companies, and caused Moscow to
increase the pace of delimiting the borders of its northern
possessions.

Experts estimate oil and gas deposits in the Russian part of the
Arctic at 25 percent of the world’s hydrocarbon reserves
(approximately 15.5 billion tons of oil and 84.5 trillion cubic
meters of gas). At present, Russia is already extracting up to 90
percent of the nickel and cobalt in the Arctic, 60 percent of the
copper, 96 percent of platinoids and 100 percent of apatite
concentrate.

ARCTIC FEVER

Expert estimates suggest that rapid climatic changes, which have
affected the Arctic region as well, will make it possible to start
geological prospecting and commercial development of some areas
already in 2020. Simultaneously, it is becoming possible to further
develop strategic transport routes, of which the most promising
ones include the Northern Sea Route and cross-polar flights. Norway
is more cautious in estimating the prospects for the economic
development of the Arctic. According to Norwegian Foreign Minister
Jonas Gahr St?re, the Arctic Ocean could be ice-free for a large
part of the year by 2040, which would make it possible to open new
transportation routes. At the same time, many questions will
inevitably arise concerning sovereignty over these areas.

Yet the resumed demand for hydrocarbon resources has exacerbated
the problem of the international legal status of the Arctic and the
need to resolve long-standing territorial disputes and establish a
multilateral political dialogue among all the Arctic states –
Russia, the United States, Canada, Norway and Denmark.

The institutional and legal structure of the Arctic region is
still taking shape. Back in 1996, Denmark, Iceland, Norway, Sweden,
Finland, Russia, the U.S., Canada and several non-governmental
organizations established the Arctic Council. The Council has
proved to be an important platform for discussing key issues
relating to the region and protecting the unique Arctic
environment. But politically it was overshadowed for a long time by
the Barents Euro-Arctic Council, as its activity was largely
limited to environmental issues and the Arctic countries did not
co-ordinate their policies.

Things changed in spring 2008 when the five countries that
border the Arctic Ocean – Russia, Canada, the U.S., Norway and
Denmark – met in Ilulissat, Greenland, for the first international
Arctic Ocean Conference. Interestingly, Arctic Council members that
do not have direct access to the Arctic were not invited to the
conference.

The conference discussed Arctic climate change and its possible
impact on the Arctic ecosystem in light of the forthcoming
development of Arctic resources. The conference was held because of
a Russian Arctic expedition in 2007 that made a strong impression
on surrounding countries and which caused them to step up their own
policies in the region. Thus, the outgoing George W. Bush
administration unveiled its own Arctic doctrine in January 2009 and
expressed a desire to join the UN Convention on the Law of the Sea
(1982).

The high conflict potential of the Arctic region is one of its
main characteristics. Disputes between Russia and the U.S. over the
delimitation of their Arctic possessions and economic zones in the
Bering Sea have still not been settled (Russia has not recognized
the U.S.-Soviet Maritime Boundary Agreement signed by Secretary of
State James Baker and Soviet Foreign Minister Eduard Shevardnadze,
and the Russian parliament has not ratified it). Norway and some
other states, including Russia, have different views concerning the
Svalbard archipelago and the limits of an economic zone around it.
There are also unsettled territorial disputes between Canada and
Denmark, between Denmark and Russia, and between Russia and Canada.
Meanwhile, Canada and Denmark are actively drilling deep water
wells and mapping their Arctic sectors.

Against this background, the 2007 Russian Arctic expedition has
had a political and propagandistic effect rather than a scientific
and practical one, as Moscow has not yet started drilling wells in
the claimed Arctic sector nor begun drafting detailed maps. The
troubled political situation in the region has been exacerbated by
Greenland’s plans to change its autonomous status within Denmark
and seek political independence. Broader self-government by
Greenlanders rests on a solid foundation as the government of
Denmark has transferred to Greenland the ownership of oil and other
resources that may be present in the Greenland shelf. Several
Danish opposition parties have protested the move.

Meanwhile, an increasing number of countries have said that they
have a right to participate in the division of the Arctic pie. In
the early 2000s, Britain came out with a surprise statement that
only two nations have the right to the Arctic – Canada and Russia.
Many analysts took this statement as London’s desire to get a piece
of the Arctic pie via Ottawa, which is an active member of the
Commonwealth. Finally, several countries that do not have direct
access to the Arctic can influence the course and results of the
Arctic race via existing international structures. For example,
Iceland, Sweden and Finland, as member states of the Arctic
Council, participate in the discussion of long-term plans for the
region’s development.

PREPARING FOR BATTLE

The division of the Arctic into national sectors began in 1909
when the Canadian government declared its sovereignty over the
territory between the North Pole and mainland Canada. Soviet Russia
followed suit and in 1926 it unilaterally demarcated the borders of
its Arctic possessions, which extended from Norway’s Svalbard in
the west to the Bering Sea in the east, and from the North Pole to
the southern coasts of the Barents, Kara, Laptev, East Siberian and
Chukchi Seas. But that delimitation of Arctic water areas did not
apply to the continental shelf, as the bottom of the Arctic seas
was declared indivisible. In 1997, Russia ratified the 1982 UN
Convention on the Law of the Sea, which later became a tangible
obstacle to its Arctic ambitions. From then on, Russia could claim
only a 200-mile economic zone which, in exceptional cases, could be
extended to 350 miles.

Russia opened a new chapter in its Arctic policy in 2001, when
Moscow made an official submission to the UN Commission on the
Limits of the Continental Shelf, asking that its continental shelf
be expanded to include 1.2 million square kilometers of Arctic
territory. Russia argued that the underwater Lomonosov and
Mendeleev ridges are extensions of the Eurasian continent (the
Siberian Shelf). If Russia proves its claim, it could raise before
UN experts the issue of extending its influence to a
Murmansk-Chukotka-North Pole triangle, which contains enormous oil
and natural gas deposits.

To substantiate its position, Moscow launched an Arctic
expedition in 2007, during which two bathyscaphes, Mir-1 and Mir-2,
took soil samples. In a symbolic gesture, Russian explorers planted
the Russian national flag on the seabed below the North Pole. It
was the symbolism of this move that sparked angry reactions from
other Arctic countries. Particularly harsh criticism came from the
Canadian foreign minister. An outraged Peter MacKay said: “This
isn’t the 15th century. You can’t go around the world and just
plant flags and say ‘We’re claiming this territory.’”

Overall, the reaction of Western countries to Russia’s activity
in the Arctic ranged from indignant and alarmist (the U.S., Canada
and Denmark) to restrained and pragmatic (Norway). In response to
the Russian polar expedition, the government of Canada made several
harsh statements and decided to establish a permanent army reserve
of about 100 soldiers in Yellowknife, in northern Canada. The
Canadian defense minister said the reserve unit would “cover an
enormous amount of land mass and they will also work closely with
the Canadian Arctic Rangers.”

The U.S. expressed surprise at the Russian expedition and
announced plans to build new icebreakers. A nervous reaction came
from Brussels. The EU High Representative for the Common Foreign
and Security Policy, Javier Solana, said in a March 2008 report
that European countries should prepare for conflicts with Russia
over Arctic energy resources. Norway was the only country that, in
the person of its military experts, expressed understanding of
Russia’s motives and agreed to a permanent deployment of an Arctic
military force by Russia.

However, Norway’s former foreign minister, Thorvald Stoltenberg,
struck a somewhat different tone at a Nordic Council meeting in
February 2009, where he proposed setting up a joint Nordic
deployment force within the framework of the Nordic Council’s
foreign and defense policies. This force would ensure security in
the Arctic region. Nordic foreign ministers supported the
Stoltenberg plan. The deployment group is expected to include
well-trained and well-equipped Air Force and Naval forces from
Norway, Sweden and Denmark, which will permanently patrol air and
sea borders and monitor the Arctic. Judging by this plan, Nordic
Europe, along with the U.S. and Canada, seems to see itself and
Russia on different sides of the barricades in the struggle for the
Arctic. Thus, it calls into question prospects for interaction
between Russia and Nordic countries within the framework of a
renewed Northern Dimension policy. This project, launched by
Finland in the late 1990s, was conceived as a way to harmonize the
interests of countries in the region, with the European Union
playing the leading role.

The contraposition of rivalry for the Arctic versus cooperation
within the Northern Dimension frameworks only seems far-fetched at
first glance. The outwardly spontaneous nature of the Russian
Arctic expedition raises the inevitable question about the
coherence and integrity of the “northern vector” of Russian foreign
policy, if it should imply a combination of three aspects – Baltic
and Northern European ones and the Arctic aspect proper. The
Northern Dimension, a recently renewed regional format for
interaction, intended to harmonize the interests of the partners in
this program – the EU, Russia, Norway and Iceland, can unite these
three aspects. The territorial frameworks of the Northern Dimension
go beyond the borders of the participating countries and cover a
large Arctic sector.

In fact, the interests of only two Arctic countries – Canada and
the United States – remain outside the Northern Dimension
initiative; however, NATO’s enlargement and the extension of its
military and political infrastructure to Nordic countries and the
Baltics gives these countries an additional opportunity to control
political processes in the Arctic region. For example, Reykjavik,
Iceland, hosted a seminar in January 2009 that was attended by NATO
officials and which discussed security prospects in the Arctic, the
exploration of Arctic resources, and the need for a proactive
Arctic policy aimed at protecting the national interests of Arctic
states.

A NATO summit in Bucharest raised the issue of turning the
Alliance into an energy security instrument, which would reinforce
the potential role of the North Atlantic bloc in solving the Arctic
puzzle. The U.S. traditionally displayed the toughest approach
among NATO members as it made it clear that it would not remain an
impartial observer to Russia’s actions, which Washington views as a
seizure. However, the U.S. has limited possibilities for opposing
Russia’s plans at the state level, as the United States is the only
Arctic country that has not signed and has not ratified the UN
Convention on the Law of the Sea.

RUSSIA’S INTERESTS AND OBSTACLES IN THE WAY

The consolidation of Russia’s claims to a large part of the
Arctic shelf may cause strife in Russia’s bilateral relations with
other Arctic nations and fuel a revision of some projects that are
being implemented within the frameworks of the Barents Euro-Arctic
Council. For example, the idea of joint development of the Northern
Sea Route, codified in documents of this sub-regional forum, may
result in the loss by Russia of part of its sovereignty over this
transport route. This refers, above all, to Moscow’s ability to
regulate legislatively the navigation regime in the Arctic zone of
Russian interests and in the immediate vicinity of Russia’s state
borders.

Obviously, the internationalization of Arctic areas located
outside the 200-mile zone north of the Russian borders does not
meet Russia’s interests. The ratification by Russia of the UN
Convention on the Law of the Sea in 1997 and, especially, its use
for the international legal regulation of actions by states in
respect of Arctic territories, in particular for identifying the
borders of national Arctic sectors, looks rather ambiguous in this
context. It would be useful therefore to study the Canadian
experience of fixing the boundaries of the country’s Arctic sector,
which was done on the basis of national legislation. The Russian
authorities could use the Canadian experience as a precedent in the
event of similar actions.

A similar situation is taking shape with regard to the Nord
Stream project. More and more of Russia’s partners in the Northern
Dimension have been joining the opponents of this Russian-German
energy project. Sweden, Poland, Latvia, Lithuania and Estonia have
declared their open opposition to Nord Stream. Swedish experts
argue that the project, which is intended to diversify energy
supplies to the European market, is threatening regional stability
in the Baltic Sea region, is sowing discord among Europeans,
strengthening the positions of an “authoritarian” Russia, and
reducing the Baltic States’ opportunity to participate in ensuring
the security of the Northern Dimension region. Moscow will hardly
agree with this assessment of its policy in the region. However,
Russia is finding it increasingly difficult to reach a compromise
with its Western partners on both Arctic and energy security
issues.

The situation is worsening as Brussels and Washington are
becoming new centers of decision-making with respect to the
Northern region. Russia reacts nervously to discussions about the
possible admission of Sweden and Finland to NATO, realizing that
the lack of consensus within the Northern Dimension frameworks on a
wide range of military-political issues will also impede economic
cooperation in Northern Europe. This, in turn, will create an
undesirable situation in the context of disputes over Arctic
resources, since all the countries in the region, except for
Russia, will be integrated into European and Euro-Atlantic
structures.

Despite having the status of a Northern power and partnership
within the frameworks of the renewed Northern Dimension, Russia
remains a largely non-regional actor with regard to Northern Europe
and the Baltic region due to its weak interaction with the European
Union and NATO, which oversee economic and military-political
processes in the region. The position of a non-regional actor
offers some advantages, the main one is that Russia’s hands are not
tied and it can conduct a flexible multi-vector policy and form
alliances with other interested parties. However, this status
implies limitations as well, first of all the need to promote one’s
interests on one’s own, without support from regional countries.
Earlier, Russia already had to uphold the expediency of the
construction of new port facilities on the Baltic coast at the
Council of the Baltic Sea States, and to discuss with EU candidates
possible solutions to the problem of transit to the Kaliningrad
region.

The creation of a regional security system, such as a Baltic
Union, would help to consolidate Russia’s positions in Northern
Europe and in the Arctic, as this system could be a prototype for a
new, co-operative security system in Europe. Discussions about the
possible admission of Sweden and Finland to NATO, actively
encouraged by Washington, mark the opposite trend. Sweden fully
sided with the U.S. and shared the latter’s assessments of the
August 2008 events in Georgia and South Ossetia. Swedish Foreign
Minister Carl Bildt condemned Russia’s recognition of the
independence of Abkhazia and South Ossetia and compared its actions
to protect peacekeepers and Russian citizens living in South
Ossetia to the occupation of Czechoslovakia by Hitler in 1938-1939.
Earlier, Russian-Swedish relations became strained after Stockholm
refused to extradite to Moscow several people suspected of
terrorist activities in Russia.

At the height of the “Arctic boom” in September 2008, Russian
President Dmitry Medvedev instructed the Russian Security Council
to turn the Arctic into a resource base of Russia and to fix the
borders of Russia’s continental shelf as soon as possible. At the
same meeting, the Security Council approved the Fundamentals of the
State Policy of Russia in the Arctic in the Period Until 2020 and
Beyond and announced Russia’s plans to resubmit a claim to expand
its continental shelf with the UN Commission on the Limits of the
Continental Shelf in 2010. Russian General Vladimir Shamanov
reiterated the Russian Armed Forces’ readiness to ensure the
protection of the claimed Arctic sector. Plans were announced to
set up an Arctic military force based on units of the Leningrad,
Siberian and Far Eastern military districts.

These developments inevitably bring up the issue of a future
development model for this vast region, its new geographical
boundaries and international legal status, and the need for a
multilateral consensus and the search for adequate ways to govern
those vast territories. All these factors sow uncertainty with
regard to the renewed Northern Dimension and serve as a test for
the “Northern vector” of Russia’s policy in new geopolitical
realities. The economic crisis has already caused Russia to amend
and partially suspend its plans. In particular, the filing of the
Russian application concerning new outer limits for its continental
shelf has been postponed until 2012; geological prospecting in the
Arctic has been frozen; and the deployment of an Arctic military
group is still a dim prospect.

Therefore, building the “Northern vector” of Russia’s policy is
a problem with many unknowns. Depending on changes in the situation
in the region, Russia may either try to fully integrate into a
multilateral cooperation system, which is being created in the
region on the basis of the renewed Northern Dimension, the Arctic
Council or other institutional structures, or put an emphasis on
selective cooperation, presupposing the solution of the most acute
problems on a bilateral basis. Sooner or later, Russia will have to
choose its priorities for the “Northern vector” of its policy and
find a way out of the Arctic labyrinth.