Social License to Operate for Mining Companies in the Russian Arctic: Two Cases in the Murmansk Region
Main Expected Changes in Legislative Regulation of Environmental Protection for Environmentally Hazardous Facilities in the Russian Arctic
Arctic Shipping: An Analysis of the 2013 Northern Sea Route Season
The 2013 shipping season on the Northern Sea Route (NSR) commenced on June 28 when the Russian-flagged vessel Varzuga, carrying 13,658 tons of diesel entered the NSR at Cape Zhelaniya north of Novaya Zemlya.1 Over the course of 154 days a total of 49 vessels transported 1.35 million tons of cargo. A further 22 vessels transited the NSR unladen carrying 507,000 tons of ballast. The shipping season concluded on November 28 when the Russianflagged vessel Bukhta Slavyanka exited the NSR at Cape Dezhnev in the Bering Strait. Traffic on the NSR connected ports as far west as Ammassalik (Greenland) and as far east as Vancouver (Canada). In total, vessels traveling along the NSR called at 47 ports in 14 countries. The port of Murmansk (Russia) represented the key hub for shipping on the NSR with 24 vessels, carrying 492,000 tons of cargo, either departing or arriving here. The port of Pevek (Russia) located near the eastern entrance of the NSR, counted 18 vessels with a total of 311,000 tons of cargo. Other important ports were Rotterdam (Netherlands), Mongstad and Hammerfest (Norway) in Europe accounting for six ships and 408,000 tons. In Asia, the ports of Yosu and Ulsan (South Korea) and Chiba (Japan) totalled six ships and 421,000 tons. About 286,000 tons of cargo, representing 21 percent of traffic departed from or arrived in Chinese ports.
Not All Transits are Equal
Russian law defines the NSR as the sea route between Kara Gate and Cape Zhelaniya at the tips of Novaya Zemlya in the west and Cape Dezhnev in the Bering Strait in the east. According to this definition Yugorski Shar in the west and Cape Shmidt in the east represent the entrance and exit ports to the NSR. The Northern Sea Route Information Office lists 71 transits for 2013 but a closer analysis of the data shows that only 41 vessels traveled the entire length of the NSR and qualify as true transits. An additional 23 vessels either departed from or arrived at ports inside the NSR and did not fully transit it. A further seven vessels traveled exclusively within the NSR. Of the 41 ships that transited the full length only 30 carried cargo, transporting 1.19 million tons.
The first full transit of 2013 began on July 3, when the Nordic Orion entered the NSR at Cape Zhelaniy traveling from Murmansk to Lanshan (China) with 66,000 tons of iron ore. The transit shipping season concluded on October 28, when the Nordic Odyssey, carrying 73,500 tons of coal from Vancouver (Canada) to Pori (Finland), left the NSR via Cape Zhelaniya.
Oil products, including diesel, fuel oil, and naphtha, made up the lion’s share of cargo on the NSR in 2013. In total 31 vessels carried 911,000 tons of oil products representing 67 percent of all cargo. The flow of oil products was predominantly eastbound with 23 vessels carrying 589,000 tons traveling from Europe to Asia and 8 vessels transporting 323,000 tons moving westbound from Asia to Europe. Key ports for oil products were Rotterdam, Mongstad and Murmansk in Europe and Yosu and Busan in Asia. Out of 31 vessels delivering oil products, 11 vessels supplied local communities and ports along the NSR. Only 17 vessels transited the full NSR and transported oil products from Europe to Asia or vice versa. The prevalence of vessels supplying local communities helps to explain the small vessel size. On average ships carried less than 30,000 tons of oil products. Only eight ships carried more than 50,000
tons, the largest one being the Propontis transporting 109,000 tons of gas oil from Ulsan (South Korea) to Skagen (Denmark). Vessels carrying oil products spent an average of 14.7 days on the NSR.
Iron ore accounted for 203,000 tons representing 15 percent of all cargo in 2013. Three vessels, the NS Yakutia, the Nordic Orion and the Nordic Odyssey departed from the port of Murmansk delivering between 66,000 and 70,000 tons of iron ore each to the ports of Lanshan and Qingdao (China). The Nordic Orion departed Murmansk on July 1 and had to contend with medium to heavy ice conditions reducing its average speed along the NSR to only 5.4 knots. It took almost 20 days for the Orion to transit the NSR. The Nordic Odyssey and the NS Yakutia left port on August 11 and September 21 respectively and were able to take advantage of improved ice conditions. They traversed the NSR in 10.8 and 12.9 days respectively.
General Cargo, also called break bulk cargo, accounted for 7.4 percent of goods on the NSR. General cargo is carried in bags, boxes, crates or barrels rather than in inter-modal containers. Thirteen vessels, including the much-publicized Yong Sheng owned by COSCO Shipping, transported 100,000 tons of these goods. Two ships, the Nordic Bothnia and the Yong Sheng, accounted for more than half of all general cargo. The Bothnia departed Xingang (China) on September 22 bound for Amsterdam (Netherlands). It spent 14.8 days on the NSR traveling at 10 knots. The Yong Sheng departed Busan on August 17 bound for Rotterdam. It recorded the highest average speed of all vessels in 2013, traveling at 14.1 knots and spending just 7.4 days on the NSR. The remaining 11 general cargo vessels, carrying between 120 and 9000 tons, predominately supplied local communities along the Russian coastline. Seven vessels departed from the port of Arkhangelsk bound for either Anabar Bay, Kolymar River and Pevek within the NSR.
Coal deliveries accounted for 5.5 percent of traffic. A single vessel, the Nordic Odyssey, carried 73,500 tons from Vancouver (Canada) to Pori (Finland). The vessel departed Vancouver late in the shipping season on October 4 and did not enter the NSR until October 16. It recorded an average speed of 9.1 knots and sailed for 12.2 days along the NSR. The Odyssey’s journey represented the last major vessel to transit the NSR in 2013. All subsequent vessels constituted either local deliveries of oil products or traveled under ballast. Thus, as a transit route, the NSR shipping season concluded a full month before the last smaller vessels left the route.
Liquefied Natural Gas
LNG accounted for 5 percent of all NSR traffic in 2013. The NSR saw the first transit of a LNG carrier in 2012 when the Ob River carried LNG from Yosu to Montoir (France). In 2013 a single vessel, the Arctic Aurora, carried 66,868 tons of LNG from Hammerfest to Chiba. Despite the fact that the vessel transited the NSR during the month of September, when ice is generally at its lowest extent, it only traveled at an average speed of 7.1 knots and spent more than two weeks on the NSR. The ship departed Hammerfest on September 13 and exited the NSR via Cape Dezhnev on October 6.
In addition to the 49 vessels carrying cargo, 22 ship traveled the NSR unladen and under ballast. Ballasted journeys accounted for 31 percent of the official 71 transits. The vast majority of ballast traffic, 19 out of 22 journeys, traveled the NSR in westward direction and 12 trips arrived in and departed from ports between Murmansk and Pevek.
Differing Traffic Patterns
In contrast to the Suez and Panama Canals, the NSR largely represents a one-way traffic route. After delivering cargo at ports in Europe or Asia few ships make the return voyage either with or without cargo via the NSR. The Propontis was the only large vessel traveling the NSR with cargo in both directions transporting 79,000 tons of naphtha products from Mongstad to Mizushima (Japan) in early August and carrying 109,000 tons of gas oil from Ulsan to Skagen. Two other large vessels, the Nordic Odyssey and the Arctic Aurora returned along the NSR under ballast. Traffic patterns on the NSR differ significantly between east- and westbound transits. In 2013, 40 vessels traveled eastbound carrying 895,000 tons in cargo and 6,000 tons of ballast. In contrast, the 31 westbound vessels carried 460,000 tons of cargo and 500,000 tons of ballast. Oil products made up 65 percent of eastbound volume (cargo + ballast), followed by LNG with 23 percent and iron ore at 7 percent. Only three of 40 vessels transited the NSR under ballast in the easterly direction accounting for 0.1 percent of total volume.
In contrast, ballast accounted for 52 percent of the westbound volume followed by oil products with 31 percent and general cargo at 8 percent. Almost half, 14 of 31 westbound vessels, traveled the NSR without cargo.
Intraseasonal and Interannual Ice Variations
The 2013 season saw two distinct peaks in shipping activity. In eastward direction, supplies for local communities, mainly oil products, and two iron ore shipments dominated the first two months of the season, July and August. Unfavorable ice conditions near Severnaya Zemlya and in the East Siberian Sea during the first half of September led to a drop in traffic before a second peak emerged at the end of the month. (Suslin, 2013) September saw another iron ore delivery and the season’s sole LNG shipment. Eastbound traffic largely concluded by the end of October with a few small deliveries of oil products along the Russian coastline. Westbound traffic commenced around July 15, about two weeks after eastbound transits. The first
peak in shipping activity occurred between July 15 and August 15. Almost all volume carried during primarily oil products, general cargo and coal. The westbound shipping season extended until the end of November, however, traffic consisted exclusively of unladen vessels after October 25. The fact that Arctic shipping is subject to the intraseasonal variability of ice conditions represents a key economic obstacle of the NSR. Unfavorable ice conditions between the end of August and the middle of September had a noticeable impact on shipping
activity in 2013. Furthermore, interannual variations of ice conditions will also remain significant. While 51 vessels had transited the NSR by October 1 in 2013, no transits had been recorded by the same date in 2014.
Limited Geographic and Cargo Diversification
The vast majority of transits, 54 of 71 journeys, originated in Russian ports and those vessels transported 705,000 tons, equal to 52 percent of all cargo. South Korean ports represented the second largest points of departure with four vessels carrying 293,000 tons followed by Norwegian ports with six vessels transporting 208,000 tons. Ports in these three countries accounted for 89 percent of all cargo. The list of destination ports was slightly more diversified. Russian ports were the destination for 48 of the 71 journeys delivering 227,000 tons of cargo. Dutch ports received four vessels carrying a total of 242,000 tons. Ports in China, Japan and South Korea each received three vessels carrying 203,000, 183,000 and 182,000 tons respectively. Together these five countries accounted for 77 percent of all cargo. The lack of diversification, especially in terms of country of origin, is striking. The fact is that the NSR is primarily utilized as a domestic supply and export route for Russia and much less as an international transportation corridor by countries in Europe or Asia. The scatter plot below shows the importance of the NSR as a local supply route for Russian communities. Small vessels, carrying generally less than 20,000 tons of cargo travel along its northern coastline throughout the season delivering diesel and general cargo. More than 300,000 tons of cargo, equal to 23 percent of the total, were transported domestically between Russian ports and never left the country’s Exclusive Economic Zone. Another indicator of the NSR’s limited use as a twoway transit route is the fact that the NSR exhibits a high rate of ballast journeys in comparison to the Panama and Suez Canals.
The NSR remains a niche trade route with limited numbers of true transits and the majority of traffic originates in Russian waters. Only 30 vessels traversed the route with cargo in 2013. East and westbound traffic patterns are distinct and the share of unladen vessels remains high. Ice conditions will continue to have a significant impact on shipping traffic.
1. All figures based on data by the NSR Information Office unless otherwise noted.
Northern Searoute Information Office. (2014). NSR Transits 2013. Retrieved from http://www.arctic-lio.com/docs/nsr/transits/Transits_2013_final.pdf
Panama Canal Authority. (2014) Transit Statistics. Retrieved from http://www.pancanal.com/eng/op/transit-stats/
Suez Canal Authority. (2014). Transit Statistics. Retrieved from http://www.suezcanal.gov.eg/TRstat.aspx?reportId=1
Suslin, M. (2013). Arctic Shipping Development. Shipowner’s point of view. Retrieved from http://russiancouncil.ru/en/arctic2013/presentations/
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The Arctic: A New Internet Highway?
The Arctic Ocean is one of the last oceans of the planet, along with the Southern Ocean, not to be crisscrossed with fiber optical cable, information highways that carry the lion’s share of global communications. These cables are the spinal cord of the Internet and are a critical link with the rest of the world, increasingly so in our global village where instantaneous communication is expected. Today, there are nearly 300 submarine optical fiber cables on the ocean floor which carry, according to Alan Mauldin, research director at Telegeopgraphy, 99% of global communications (CNN, 2014). The remaining communications are via satellite for areas not yet connected to the global cable network. This is notably the case in the Canadian Arctic,1 where transmission is much more expensive and bandwidth much more limited as compared to optical fiber cable. In the coming years, with the melting of the polar ice and thanks to Canadian and Russian projects, Arctic residents may soon be linked to the global network and thus benefit from high-speed Internet connections. This offers great promise to northerners, especially in terms of education, health and economic development. These projects do face challenging weather conditions and require significant investment: cost estimates range from $650 million (USD) to nearly $1.9 billion.
Melting Ice Opens Northern Waters
Today, no submarine optical fiber cables lie on the Arctic Ocean floor, despite this being the shortest way to link Asia, the United States, and Europe by water, a distance of some 16,000 km. To date, ice and icebergs have sufficiently hampered navigation to make cable laying a dangerous prospect. However, the accelerated melting of the polar ice cap opens new prospects, not for raw materials or new maritime routes for commercial shipping, but for telecommunications companies to open the Northwest (NWP) and Northern Sea Route (NSR). The latter route is as much as 7000 km shorter than the NWP, which means not only less cables to lay, but also a shorter latency for communications. This latency gain is of high interest to financial institutions (Clayton, 2012), particularly those involved in high frequency trading (Morand, 2012). Russian and Canadian projects are promising latency reductions of 30%, which represents a gain of 62 milliseconds, going from the current 230 milliseconds to 168 milliseconds.2 Given that milliseconds can mean the loss or gain of millions of dollars (Anthony, 2012), there is little wonder that the new plans for Arctic cable have attracted the interest of traders.
The Arctic route has other advantages as well. Since the region has yet to be developed, there is for the moment little commercial shipping or fishing, which reduces the risk of damage to cables from anchors or fishing lines, as was the case off the coast of Egypt (Saffo, 2013). The Arctic route also avoids high-risk security areas such as the Suez Canal or the Strait of Malacca. The Arctic is seen as a stable area for development. Indeed, despite a few (managed) border disagreements between Canada and the US, and Canada and Denmark, and despite the Russian-Canadian diplomatic tensions in the context of the Ukrainian crisis in 2014, nothing today points to an armed conflict or a military crisis in the Arctic.3
Three Major Optical Fiber Submarine Cable Projects
In the early 2000s, Polarnet, a Russian company, was created to lay a 15,000 km fiber optic cable along the NSR. This project, named R.O.T.A.C.S. (Russian Optical Trans-Arctic Submarine Cable System) would link Tokyo to London via Terberka, Anadyr and Vladivostok.
The first phase of work is evaluated at $860 million and would connect London and Tokyo via the NSR. The second phase, evaluated at $500 would connect Russian Arctic regions to the cable. A final phase, also evaluated at $500 million, undertaken in partnership with the Russian oil company Transneft, would develop terrestrial connections to the cable in Russia. This brings the project total to $1.9 billion. According to Interfax, the R.O.T.A.C.S. is financed by the Russian oligarch Oleg Kim, already present in many sectors of the Russian economy. However, despite receiving approval from the Russian Intergovernmental Commission for Information and Communications Technologies in October 2011, and receiving financial support from the Ministry of Telecommunications in January 2013, no information is available about the status of the project (Telegeography, 2013). According to the think tank Telegeography (2014a), the cable will be in service in late 2016.
Arctic Fibre is a Canadian project that aims to lay a cable under the NWP. The implementing company, also called Arctic Fibre, is based in Toronto. The cost of the project is estimated at $650 million (Cunningham, 2014). The cable will cover 15,700 km, linking London, Tokyo and Seattle. The cable should be laid in summer 2015, using the southern NWP, and linking seven communities in Nunavut (Canada) as well as seven more in Alaska (USA). In the Canadian North, the communities targeted are Cambridge Bay4, Gjoa Haven, Taloyoak, Igloolik, Hall Beach, Cape Dorset and Iqaluit, representing 52% of Nunavut’s population. Thanks to a partnership with US-based Quintillion, of Anchorage, Alaska, Arctic Fibre will link in the Alaskan communities of Prudhoe Bay, Barrow, Wainwright, Nome, Point Hope, Kotzebue and Shemya (Dischner, 2014).
Figure 1: Arctic Fibre, in red with future extensions in yellow and orange. Image: M. Cunningham (2014)
The system is scheduled to be operational by January 2016, for the Arctic segment, with the complete cable network operational by November of that year (Cunningham, 2014). The mainobjective is to link Asia, the United States, and Europe. Linking to Canada’s Arctic communities is a secondary objective, with only a few thousand households to be connected; certainly not worthy of an individual investment. For this reason, Arctic Fibre has requested a subsidy form Industry Canada to lay a supplementary cable that would link 17 additional communities in Nunavut and Nunavik, an additional investment of $237 million (CAN). With this addition, 98% of Nunavut and Nunavik communities will be connected (Arctic Fibre, 2013). Most of the financing for this project is however from the private sector, with financial institutions and international telecommunications companies playing a leading role. No public financing has been announced to date.
Arctic Fibre’s President, Douglas Cunningham, regularly advocates for his company’s cable link that would offer, according to him, reliable, rapid communications with virtually unlimited bandwidth availability at a much more attractive price for northern communities than the Telesat Canada’s satellite service in Nunavut and Nunavik. For the moment, satellite is the only alternative for Internet there. Moreover, in August 2014, Industry Canada confirmed that it will extend Telesat’s broadband subsidies through 2021, pledging $50 million to prevent Arctic internet services from collapsing (Nunatsiaqonline, 2014).
Later that month, Prime Minister Harper announced that it would upgrade Internet connectivity in Nunavut and Nunavik as part of Ottawa’s $305 million dollars ‘Connecting Canadians’ program (Prime Minister of Canada Stephen Harper, 2014). While these investments are necessary to insure continued communications services in the North, Arctic Fibre’s president Douglas Cunningham is concerned. If the Harper Government continues to prefer satellite communications, his Internet services are jeopardized. In his view, if Ottawa refuses to utilize his submarine broadband services, it is impossible to make his project economically viable since without any public financial support there will be no significant client to sustain such services (Press, 2014).
The Ivaluk Network project was announced in January 2014, designed and to be implemented by the Canadian company Nuvitik Communication. Led by a former federal civil servant, the cable project is different from the two previously described, as it aims only to serve the needs of Northern Canadians, with a focus on Nunavut and Nunavik, and a planned extension towards the Northwest Territories (Nuvitik Communications, 2014). This future cable plans to connect 26 communities in Nunavut and 14 in Nunavik. The cable should be laid in the coming years, forming a loop of 8000 km, linking James Bay, Ungava Bay, Hudson Bay, Hudson Strait, Baffin Bay, Davis Strait and part of the NWP. They offer high-speed Internet connections at competitive rates compared to satellites.
Figure 2: Ivaluk Network (Telegeography, 2014b)
The total estimated cost for the project is approximately $800 million (CAN). Discussions are apparently underway between federal authorities and Nuvitik to provide public funds for the project. The project does not lend itself to private financing, given the small client base envisaged. Nunavut has only 35,600 inhabitants (Statistiques Canada, 2013) and Nunavik 11,000 (Statistiques Canada, 2007). Public funds would be a sine qua non condition for the project to go through.
A Catalyst to Initiate Northern Development?
Arctic regions, including the Far North of Canada, have limited infrastructure, making economic development challenging at best, and always costly. Transport costs are higher than elsewhere and reliable communications do not exist due to meteorological conditions. Internet connectivity could give these regions the boost they need to kick-start development, attracting investors and initiating broader development.
Table 1: Summary of submarine fiber optic cables for the Arctic
Japan, England & Russia via Terberka, Anadyr & Vladivostok; including regions of the Russian Arctic
$1.9 billion US
End of 2016
Japan, USA (7 native communities of Alaska; also Seattle); Canada (7 northern communities in Nunavut); Ireland & England
$650 million US
January 2015 for the cable in the Arctic; & November 2016 for the completed project
The 26 northern communities of Nunavut & the 14 communities of Nunavik in northern Québec; including an extension in the Northwest Territories
$800 million CAN
Exact timeline to be announced
Several recent examples from circumpolar states show that this hypothesis bears out over time. High-speed connectivity can be a critical factor for development, given that they have other assets to attract investors already. Iceland is a good example, with the reconversion of the former NATO base in Reykjanesbaern to a data center for Verne Global and Colt (Pialot, 2012). Hydraulic and geothermal power5 provide renewable energy, the Arctic climate provides fresh air and a high-speed connection via several submarine optical fiber cables. The upcoming Emerald Express cable (end of 2014) will enhance Iceland’s connectivity since it will be directly connected to North America via New York, and to Europe via Ireland.6 These competitive advantages may attract other companies, especially when one considers that Iceland has a lower cost of power per megawatt/hour than in Europe, at 38 euros versus 42 euros in France (Godeluck, 2012). Finland offers yet another example with Google’s investments, where the internet giant set up servers in an old factory. Facebook has chosen to invest in Sweden with a similar server site, a total surface area of 84,000m² (Clairet, 2012).The combination of a cold climate (requiring less air conditioning for servers) and quasi-infinite renewable energy, as well as submarine optical fibers cables, has been crucial to incite large business to set up shop in the north. However, the Arctic regions in Canada, Alaska and Russia do not offer the same potential for renewable energy. They do have large hydrocarbon reserves, which may serve as an initial replacement for green energy.
Despite the success of laying a cable in the famed Iceberg Alley between Greenland and Canada in 2009, there is still some uncertainty about the feasibility of projects crossing the entire Arctic. While cables have been laid since the early 20th century in both Atlantic and Pacific Oceans, such an endeavor has never been accomplished in the icy waters of the Arctic where the actual ice and the short window of operations to install (or maintain) the cables are obvious challenges. The climate may be a serious obstacle, both for laying and repairs. For now, the Arctic is only ice-free three months a year, in the summer. Even during this period, ice can block ships from entering and/or transiting the NWP, as was the case in 2013 when the ice pack did not recede as expected (in late summer 2014 the opening of the NSR in Russia was delayed due to ice conditions which affected all economic activities in the region). It does appear that existing projects have incorporated such variability risks. If current planning holds, 2016 will be a crucial year, with three new optical fiber cables being inaugurated in the NSR and NWP. They will link the three continents of the Northern hemisphere (America, Europe and Asia) but also the indigenous communities of Nunavut and Nunavik in Canada, and others in Russia and Alaska (USA). These populations will have better access to vital services such as tele-health and tele-education, improving their quality of life and possibly opening up greater economic possibilities. With technological advancements and the arrival of high-speed Internet, future Arctic shipping routes could even one take advantage of these submarine cables to establish a network of various reliable on-land communication services.
As a result of climate change and thawing sea-ice, “the last frontier” appears attractive and increasingly open to innovative projects like the ones mentioned above. These projects are major drivers that will continue to further the Arctic into globalization. An emerging Internet highway through the Arctic waters is definitely a clear example of this new reality.
1. Iceland, Greenland, Alaska, and the Svalbard Archipelago are connected to the Internet via submarine optical fiber cables.
2. According to Mike Cunningham, Chief Operating Officer at Arctic Fibre.
3. Despite tensions stemming form the Ukrainian crisis, cooperation within the Arctic Council between Canadian and Russian experts seems to proceed without impediment.
4. Cambridge Bay has a radar station as part of the old DEW line, now North Warning System.
5. These renewable energies are less susceptible to price fluctuations than traditional sources such as oil and gas.
6. Emerald Networks. Accessed via: http://www.emeraldnetworks.com/about-us/
Anthony, S. (2012). $1.5 billion: The cost of cutting London-Tokyo latency by 60ms. ExtremTech. Retrieved from: http://www.extremetech.com/extreme/122989-1-5-billion-the-cost-of-cutting-london-toyko-latency-by-60ms.
Arctic Fibre. (2013). Nunavut Briefings August 2013. Retrieved from: http://arcticfibre.com/wp-content/uploads/2013/08/Nunavut-Briefings.pdf.
Clayton, N. (2012). Retreating Sea Ice Could Benefit High-Frequency Trading. The Wall Street Journal. Retrieved from: http://blogs.wsj.com/tech-europe/2012/03/22/retreating-sea-ice-could-benefit-high-frequency-trading/.
Clairet, S. (2012, 21 October). Arctique : projets de câbles et desseins géopolitiques. Blog GeoSophie – Paysages géopolitiques. Retrieved from: http://geosophie.eu/2012/10/21/arctique-projets-de-cables-et-desseins-geopolitiques/.
CNN (2014). This is what the Internet actually looks like: the undersea cables wiring the Earth. Retrieved from: http://edition.cnn.com/2014/03/04/tech/gallery/internet-undersea-cables/index.html.
Cunningham, M. (personal communication via email correspondence, 11 February 2014).
Dischner, M. (2014, 29 May), Quintillion preps for $60M in 2014 work connecting Arctic. Alaska Journal of Commerce. Retrieved from: http://www.alaskajournal.com/Alaska-Journal-of-Commerce/June-Issue-1-2014/Quintillion-preps-for-60M-in-2014-work-connecting-Arctic/.
Godelcuk, S. (2012, 13 February). L'Islande inaugure le premier data center « propre ». Les Echos. Retrieved from: http://www.lesechos.fr/13/02/2012/LesEchos/21122-124-ECH_l-islande-inaugure-le-premier-data-center---propre--.htm.
Morand, J-L. (2012). Trading Haute Fréquence : le câble qui valait 1 milliard ! Locita. Retrieved from: http://fr.locita.com/societe/trading-haute-frequence-le-cable-qui-valait-1-milliard-67492/#sthash.yHRjtxLV.dpbs. Nunatsiaq Online. (2014, 26 August). Ottawa confirms five-year broadband subsidy extension for Nunavut, Nunavik. Retrieved from: http://www.nunatsiaqonline.ca/stories/article/65674ottawa_confirms_five-year_broadband_subsidy_extension_for_nunavut_nuna/.
Nuvitik Communications. (2014). The Ivaluk Network. Retrieved from: http://www.nuvitik.ca/wp/wp-content/uploads/2014/03/newflyer_email.pdf.
Pialot, D. (2012, 12 February). L'Islande déroule le tapis rouge aux "data centers." La Tribune. Retrieved from: http://www.latribune.fr/green-business/l-actualite/20120212trib000682792/l-islande-deroule-le-tapis-rouge-aux-data-centers.html.
Press, J. (2014, 1 September). Federal government balks at backing Arctic Internet project. Ottawa Citizen. Retrieved from: http://ottawacitizen.com/news/national/federal-government-balks-at-backing-arctic-internet-project.
Prime Minister of Canada Stephen Harper. (2014, 25 August). PM announces important investment to boost high-speed Internet in Nunavut and Nunavik. Retrieved from: http://pm.gc.ca/eng/news/2014/08/25/pm-announces-important-investment-boost-high-speed-internet-nunavut-and-nunavik#sthash.IDi11y7N.dpuf.
Saffo, P. (2013). Disrupting Undersea Cables: Cyberspace's Hidden Vulnerability. Atlantic Council Blog. Retrieved from: http://www.atlanticcouncil.org/en/blogs/new-atlanticist/disrupting-undersea-cables-cyberspaces-hidden-vulnerability.
Statistique Canada. (2013). Population par année, par province et territoire. Retrieved from: http://www.statcan.gc.ca/tables-tableaux/sum-som/l02/cst01/demo02a-fra.htm.
Statistique Canada. (2007). Profil de la population autochtone. Recensement de 2006 (produit nº 92-594-XWF). Ottawa. Retrieved from: http://www12.statcan.gc.ca/census-recensement/2006/dp-pd/prof/92-594/details/page.cfm?Lang=F&Geo1=BAND&Code1=24640002&Geo2=PR&Code2=24&Data=Count&SearchText=Nunavik&SearchType=Begins&SearchPR=01&B1=All&GeoLevel=PR&GeoCode=24640002.
Telegeography. (2013). Is dormant Polarnet project back on the agenda? TeleGeography. Retrieved from: http://www.telegeography.com/products/commsupdate/articles/2013/01/28/is-dormant-polarnet-project-back-on-the-agenda/.
Telegeography. (2014a). Submarine Cable Map, Russian Optical Trans-Arctic Cable System (ROTACS). Retrieved from: http://www.submarinecablemap.com/#/submarine-cable/russian-optical-trans-arctic-cable-system-rotacs.
Telegeography. (2014b). Submarine Cable Map. Ivaluk Network. Retrieved from: http://www.submarinecablemap.com/#/submarine-cable/ivaluk-network.
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Tourism Safety and Security: Findings from Tourism Intensive Finnish Lapland
The briefing note “Tourism Safety and Security: Findings from Tourism Intensive Finnish Lapland” describes the topic of tourism safety and security and then presents successful best practices that were developed in Finnish Lapland to tackle the challenges of tourism safety and security systems, describing the main actors on the regional, national and international levels.
The published briefing note is a deliverable of the European Dimension on Tourism Safety and Security project (ESF, 2012-2014) and has been co-created with partners in the project as well as the regional, national and international network of Tourism Safety and Security System in Lapland.
“The tourism safety and security network model, developed in Finland, is utilised in developing safety and security throughout the whole of the Arctic region”
- Arctic Strategy of Finland 2013 (50), translated from Finnish Introduction
For Finnish Lapland, tourism is a strategically important livelihood. Its development as a business requires innovation, faith in one’s own skills, hard work, a creative approach and an understanding of parallel global and regional dynamics. Furthermore, all actors must understand the dynamics of the postmodern service economy with respect to the more traditional industrial economy. Safety and security management in the tourism industry requires novel approaches that are not within the spheres of traditional organisation safety and security management. The actors in the Tourism Safety and Security System in Finnish Lapland have noticed that new developments in safety and security take place within networks and value chains that require new methods and tools.
The purpose of this briefing note is to describe and disseminate the approaches, activities and actors of Tourism Safety and Security System in Lapland and, in so doing, raise awareness of this regional innovation, following the guidelines of the Finnish Arctic Strategy (2013) referred to above. The aim of this dissemination is to enhance safety and security operations in sparsely populated areas through the more effective use of existing resources.
Finland has long been a pioneer in providing a broader understanding of safety and security, for example, within the initiatives of the Organization for Security and Co-operation in Europe, the Northern Dimension, the Rovaniemi Process and the Helsinki Process. Furthermore, developing safety in tourism fits well with the general national image of Finland.1 This briefing note is a deliverable of the European Dimension on Tourism Safety and Security project (ESF, 2012-2014). It explicates the best practices of Tourism Safety and Security System in Lapland and international network building (ESF 2012-2014). The consortium acknowledges the support of the European Union and is grateful for the input of all partners, who made this project possible – the Tourism Safety and Security System in Lapland and the corresponding work within the international Tourism Safety Network.
Theory: Safety and Security as Concepts
As concepts, safety and security have many meanings. In everyday speech they have several connotations. They refer to the subjective experiences of individuals as well as social relations. Safety and security can be understood as the absence of a threatening factor (van Steen 1996) or, for example, the presence of a negligent state of mind (e.g. Laitinen 1999). According to state-centric and traditional safety and security understanding, the sovereignty and sanctity of a state are crucial. This realist and neo-realist approach understands safety and security as “given” from state structures in which the important actors in modern society include military organisations, the police and, for example, border guards (for safety and security as “given” see Waltz 1979 and for a critique see Wendt 1999.)
Gradually safety and security have changed from a state-owned and state-defined virtue to a societal value and aim. The growth of interdependency, globalisation, environmental and climate change, cross-border interaction and the network society have challenged the traditional state-centric approach. New approaches to safety and security require the extension of our understanding of safety and security. This refers to the discussion on the transnational, idealistic and constructivist approaches that focus on social and civilian safety and security. The approach widens the agenda of the discussion by bringing the environment and economics into the discussion on safety and security (see e.g. Buzan et al. 1998). Environmental questions have appeared as security issues in questions related to environmental disasters and sustainability (see e.g. Dalby 2002). The economic approach highlights themes such as managing an economic crisis and the just allocation of financial resources within society and global systems (Hall et al. 2009).
According to its broader understanding, safety and security is based on human beings and is constructed “bottom-up” (see Kerr 2010) by being based on grass-roots level basic needs. The social security system, health care and other welfare services and associations represent this agenda as producers of safety and security. According to Campbell (1998), we live in societies where safety and security are the utmost virtues. However, these virtues are always, at least, partly out of reach. No individual or state can reach absolute safety and security. This poses a challenge to all in the safety and security research and development community due to the high demands for safety and security in modern society – with its multiple risks and uncertainty. In the sparsely populated Arctic region this issue is even more challenging, though positive developments are taking place (see e.g. Heininen 2005).
As a concept, tourism safety and security is broad and it combines state-centric, traditional security with more individual-focused, softer safety theories. In the tourism safety definition, process-thinking takes into account the safety and security needs of the customer, company and operative environment. According to the broader thinking on the issue, safety and security is formulated bottom-up – from people and local community needs and the grass-roots level. Social groups, such as ethnic minorities, define their safety and security needs between the individual and state and also across state borders. Similar to this broader thinking on safety and security, social security, health care systems and other well-being services and associations also represent safety and security policies
Actor that defines safety and security
Main safety and security questions
Producers of safety and security
Security of state, national security
Military organisation, police force
Communal security-safety, environmental safety and security
Associations, 3rd sector
Personal safety and security, work related (safety)
Local community, municipality
Figure 1 : Typology of safety and security frameworks (source: Iivari & Niemisalo 2013).
Together with the several scholars that we have cooperated with on this theme, we have noticed that research on tourism safety and security requires broader safety and security thinking. Furthermore, it is multidisciplinary work. Several initiatives to proceed with the topic have been made already (see e.g. Botterill & Jones 2010; Mansfield & Pizam 2006). The initiative developed in Finnish Lapland, i.e. Tourism Safety and Security System in Lapland, builds a holistic approach based on the previous work and research that has been already implemented. Our home organisation, the Multidimensional Tourism Institute, provides an excellent environment for this development as it combines academic education and research (University of Lapland), applied science (Lapland University of Applied Sciences) and vocational education (Lapland Tourism College) on tourism studies into a unique combination of research, education and innovation (see: http://matkailu.luc.fi/Hankkeet/Turvallisuus/en/Home).
Practice: Tourism Safety and Security System in Lapland as an Operative Model
Tourism Safety and Security System in Lapland is an innovative approach developed by various actors in a regional, national and international partnership, combining theory and practice. It has been co-financed by the European Union (ERDF, ESF) and it binds together the theoretical approach on the wider understanding of safety and security with practical level activities in sparsely populated Finnish Lapland. The activities are not coincidental as, on a national level, hospitality and voluntary activities designed for international tourists have a long tradition in Finland, for example, the Voluntary Road Service at the Helsinki Olympic Games in 1952.
Figure 2. Tourism Safety and Security System in Lapland: main activities and main actors
Therefore, Tourism Safety and Security System in Lapland is not without predecessors or parallel activities. On the contrary, innovation in the activities can be seen as resulting from strongcooperation with previous and existing parallel activities as well as the understanding of the contexts in which they are implemented. Tourism Safety and Security System in Lapland was implemented in practice as a network that has regional, national and international level members. It provides safety and security education for tourism destinations, tools for crisis communication, safety and risk management and foresight as well as quality. The approach has been identified as a national (Diamond Act 2010) and European (EPSA 2013) best practice. The network includes private companies, public authorities and associations. The activities are especially planned for Small and Medium-sized Enterprises (SMEs). It is an operative model that is possible to tailor to other operative environments based on our customers’ needs. This idea has gained support from regional level strategies, from the Finnish Arctic Strategy (2013) and also from the EU (for more information, see: www.luc.fi/matkailu/turvallisuus/en).
As an operative model the tourism safety and security development activities have existed since 2009. The activities have taken place in 14 tourism destinations within sparsely populated Finnish Lapland and have included hundreds of educational events, drills and company sparrings for tourism companies and SMEs, non-tourism companies, public authorities, associations and other actors. The participating tourism destinations are Enontekiö, Utsjoki, Levi, Ylläs, Saariselkä, Pyhä-Luosto, Kemijärvi, Posio, Rovaniemi, Meri-Lappi (Kemi and Tornio regions), Salla, Muonio, Pello, Ylitornio. Other actors in the Tourism Safety and Security System in Lapland are presented on our web-site.2
The education and training events have taken place in tourism destinations in Finnish Lapland. The key idea behind the training has been to enhance the safety skills of the enterprises, public authorities and local populations of the municipalities that operate in and around tourism destination environments. The key problems they tackle are long distances and a lack of safety and security resources combined with a significant increase of the international population during tourism seasons. This results in risks that would cause immediate economic losses and indirectly do major harm to the regional and national image if they occurred. Our core idea has been to create sustainability by committing the local population, public authorities, associations and other actors to safety and security skills and education. The cornerstones of our activities are:
• Listening closely to customer needs (safety and security end-users, tourism enterprises, associations and other third sector organisations, citizens in municipalities close to tourism destinations)
• Active network building: regional, national, international
• Creating practical tools for companies and SMEs
• International cooperation and maintaining our expertise by continually implementing multidisciplinary research into the topic
(Source: Qualitative interviews of the tourism safety experts in Finnish Lapland, April-June2014)
The approach has gained recognition due to its innovative and cost-efficient approach. The National Diamond Act award it received is the highest national recognition for safety and security innovations. This recognition has supported our international network building, indicated by European EPSA2013 award given to the network in November 2013. The significance of these awards is they were awarded after independent peer review and recognition. The internationalisation process serves all actors in the network, especially the tourism industry and SMEs. This briefing note is a co-creation of a particular internationalisation project (European Dimension on Tourism Safety and Security, ESF 2012-2014). The project lead partner is the Multidimensional Tourism Institute, which is a key initiator in the network building and has chosen tourism safety and security as its spearhead theme in RDI. This strategic choice is supported by Lapland University of Applied Sciences, which has chosen safety and security as a strategic priority.3 Other partners are Lapland State Administrative Agency and Lapland Hospital District, who both play crucial roles in tourism intensive Finnish Lapland.
The purpose of this briefing note has been to disseminate the theoretical and practical approaches that have created the presented best practice for developing tourism safety and security: the Tourism Safety and Security System in Lapland. The briefing note is also a material package enabling the dissemination of information about our best practices in this field. This is one way for us to be able to respond to the request made by the Arctic Strategy of Finland (2013), encouraging us to spread information about our regional innovation (best practice) to all Arctic countries. Safety and security are at the core of all responsible business, and a tourism destination that is not interested in safety and security will lose its competitive advantage sooner or later.
The briefing note introduced the topic and then presented the theoretical starting points on the concepts of safety and security research, demonstrating it to be a wide and multidisciplinary research field. Next, the practical operative model, main activities and internationalisation of the Tourism Safety and Security System in Lapland approach were presented. The activities are based on combining theory and practice. This combination is challenging but crucial for successful research and development activities. We believe that when researchers enter into dialogue with practitioners, they gain essential data for generalising the actual problems faced, making it possible to support the process of presenting these problems to a wider audiences as well as decision-makers, thus helping to solve these problems. When tourism practitioners can talk with research actors, it makes it possible for them to develop a broader understanding of the causes behind the problems, empowering them to find solutions from the correct sources. We welcome all countries in the Arctic in joining our common endeavour – contact us!
1. In the Finnish Ministry for Foreign Affairs there is a separate formal committee on safe travelling, see: http://formin.finland.fi/public/default.aspx?contentid=50470 (in Finnish only). See also: http://matkustusturvallisuus.fi/. The Tourism Safety and Security in Lapland initiative presented in this briefing note is a unique regional innovation (best practice) for all tourism actors, especially for SMEs. We have strong cooperation with the Finnish Ministry for Foreign Affairs in developing our activities and networking internationally.
2. Tourism Safety and Security: http://matkailu.luc.fi/Hankkeet/Turvallisuus/en/Tourism-Safety-and-Security.
3. Lapland UAS Strategy: http://www.lapinamk.fi/en/Who-we-are/Lapland-UAS-Strategy.
Arctic Strategy of Finland (2013, in Finnish only). Government of Finland. Retrieved from http://valtioneuvosto.fi/tiedostot/julkinen/arktinen_strategia/Suomen_arktinen_strategia_fi.pdf. Accessed 19.6.2014.
Botterill, D. & Jones, T. (2010). Tourism and Crime: Key Themes. Oxford: Goodfellow Publishers.
Buzan, B., O. Waever, J. de Wilde. (1998). Security: A New Framework for Analysis. London: Lynne Rienner Publishers.
Campbell, D. (1998). Writing Security: United States Foreign Policy and the Politics of Identity. Minneapolis, MN: University of Minnesota Press.
Dalby, S. (2002). Environmental Security. (Borderlines Series #20). Minneapolis: University of Minnesota Press.
EPSA 2013, press release on winners in annual EPSA2013 public innovation Competition. Retrieved from http://www.epsa2013.eu/files/Press%20Release_Winners%20November%202013.pdf. Accessed 23.6.2014.
Finnish Ministry for Foreign Affairs. Committee on Safe Travelling (in Finnish only). Retrieved from: http://formin.finland.fi/public/default.aspx?contentid=50470. Accessed 23.6.2014.
Hall, M. C., Dallen, T. J. & D.T. Duval (2009). Security and Tourism: Towards a New Understanding? In Hall, M. C., Dallen T.J. & Timothy, D. Duval, T. (eds.) Safety and Security in Tourism: relationships, Management and Marketing (pp. 1–18). New York: Haworth Hospitality Press.
Heininen, L. (2005). Impacts of Globalization, and the Circumpolar North in World Politics. Polar Geography. 29(2, April-June): 91–102.
Iivari, P. & Niemisalo, N. (2013, in Finnish only, Safety and Security Planning in Tourism Company): Matkailuyrityksen turvallisuussuunnittelu. In Veijola, Soile (ed.). Reader in Tourism Research (Matkailututkimuksen lukukirja) (pp. 129-143). Rovaniemi: Lapin yliopistokustannus.
Kerr, P. (2010). Human Security. In A. Collins. (ed.). Contemporary Security Studies (2nd ed.) (pp. 121–135). Oxford: Oxford University Press
Laitinen, K. (1999, in Finnish only). Turvallisuuden todellisuus ja problematiikka: tulkintoja uusista turvallisuuksista kylmän sodan jälkeen (Reality and Problematics of Security: Interpretations of New Securities After the Cold War). Tampere: Tampereen yliopisto.
Mansfeld Y. & Pizam, J. (2006). Towards a theory of tourism security. In Y. Mansfeld & A. Pizam. (ed.) Tourism Security and Safety – From Theory to Practice (pp. 1–28). Oxford: Elsevier Butteworth-Heinemann.
Voluntary Road Service. History of Voluntary road service. Retrieved from http://www.autoliitto.fi/in_english/road_service/voluntary-road-service/. Accessed 23.6.2014.
Waltz, K. N. (1979). Theory of International Politics. New York: McGraw-Hill.
Wendt, A. (1999). Social Theory of International Politics. Cambridge: Cambridge University Press.
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Oil Drilling & Ecosystem Management Planning of the Barents Sea
Biodiversity conservation in the Arctic is on the international agenda at the United Nations (UN). Greenpeace International calls upon the UN and governments for an immediate moratorium to save the Arctic Ocean from industrial development. The Arctic Ocean has historically been covered by sea ice, which has today suffered a significant reduction due to climate change. According to Greenpeace, the long term solution is an inter-governmental agreement to a permanent, equitable and overarching treaty or multi-lateral agreement that protects the Arctic Ocean’s environment and ecosystems and the peoples who depend on them (http://www.greenpeace.org/international/en/). The International Association of Oil and Gas Producers (OPG) is working on a Joint Industry Programme (JIP) for technological innovations in oil drilling in Polar Oceans to develop new technology for the emergency planning and management of large oil-spill disasters in ice conditions (Øvrebekk Lewis, 2013). This article presents the Norwegian solution to the oil and gas exploitation and biodiversity conservation of large sea areas in the Barents Sea, which is a part of the Arctic Ocean (Figure 1). In accordance with international UN agreements, the Norwegian state has implemented an ecosystem based management plan for large areas in the Barents Sea (Ministry of Environment, White paper nr.8, 2005-2006). This initiative is linked to the international conventions of biodiversity conservation and the Malawi convention of ecosystems (Sandstrøm, 2008). These international guidelines are based on user management at the lowest democratic level, the conservation of a large ecosystem and the use of local knowledge and natural science in the governance of nature.
Figure 1: WWF map of oil drilling in the Arctic Ocean. Red dots: Production of oil and gas. Black dots: Oil drilling for exploration. Yellow dots: Oil blocks with licences. Dark blue area: Permanently ice in summertime. Light blue: Ice-front maximum in wither time. Source: WWF ArkGIS.
The Norwegian state owns and governs the search for new petroleum on the continental shelf as far as 200 km off the coastline. The sea areas in the North Sea, the Norwegian Sea and the Barents Sea, are seven times larger than the onshore area of Norway (2 140 000 km2 of sea areas) (Figure 2).
According to international figures, 25% of the world’s undiscovered petroleum resources are located in the Arctic Ocean (Walsh, 2012). The Barents Sea is a part of the Arctic Ocean with a sea area of 1 300 000 km2 and is the most promising area for exploration by the international oil industry. Because of global climate change and rising temperatures, the sea ice is receding and the Arctic Ocean is now open for petroleum research and production. However, these marine areas have very important functions in the structure of the ecosystem of the Barents Sea because the important species of fish, birds and whales use these sea areas as spawning grounds in the spring and summertime. According to scientists at The Institute for Marine Research, these biological processes in the coastal zones and at the ice-front have key functions in the structure of the ecosystems in the Norwegian Sea and the Barents Sea (The Institute for Marine Research, 2010: 1a and 2013: 3). The search for new oilfields in the Arctic Ocean is potentially dangerous because large oil spills kill fish, birds and young mammals in particular. In the Arctic, with low sea temperatures and ice conditions, large oil spills have a greater capability of damaging large ecosystems for long periods (Fall, Miraglia, Simeone, Utermohle and Wolfe, 2001; Ott, 2005). Today the ecosystem of the Barents Sea holds the world’s largest populations of cod, herring and sea birds (Sundby: The Institute for Marine Research, 2013: 3). Large scale commercial fisheries of pelagic species provide 3 million tons of commercial fishery resources which provide the livelihood for fishermen and are the most important industry in rural communities in the North Atlantic region (Jentoft, 1998; Holm, 2001; Sundby, 2013). Industrial fisheries in the Arctic provide large export incomes and the basic conditions for human settlement in Norway and the Barents region of Russia. The new petroleum activity provides opportunities as well as a great challenge to other human activities such as fisheries, tourism, shipping and outdoor recreation (The Institute for Marine Research, 2010: 1 A; Sande, 2013). These human activities and settlements onshore depend on the human exploitation of the natural resources produced in the ecosystem of the Barents Sea.
Figure 2: Ecosystems and management planning by the Norwegian Government: The North Sea, Norwegian Sea and the Barents Sea. Green sea areas: open for petroleum exploration. Yellow sea areas: Temporarily closed for oil drilling. White diagonal striped areas: New area in the Barents Sea for oil drilling in 2013. Red sea areas: Temporary closed for oil-drilling because of ice-conditions or biodiversity reasons. Source: The Norwegian Ministry of Oil and Energy, White Paper nr. 28 2011-2012).
The empirical qualitative material used in this study is from the democratic decision-making in Norwegian society regarding the development and implementation of the management of the ecosystem in the Barents Sea (see Figure 2). Key areas at sea are at stake for lots of different stakeholders, local communities and interest groups in the Norwegian society. In regard to international collaboration between the national states in the Arctic region, petroleum and fish are treated as common resources divided between the national states of Russia, Denmark, Iceland and Norway. The national states’ sovereignty over sea areas and the property rights over natural resources depend on international and bilateral recognition of borders at sea between national states.
The Norwegian state policy of gaining legitimacy in the international community consists of using international agreements regarding managing sea areas, ecosystem management and the world heritage in the Barents Sea. This political process of decision-making has resulted in a national controversy within local communities, the government and parliament regarding conflicts between the development of petroleum, the fisheries and the world heritage status (Kristoffersen, 2011, Andersen, 2011, Sande, 2013). This briefing report is an attempt to analyze the democratic decision-making regarding the use of the key areas for large scale ecosystem planning. The question then is as follows: Does government based ecosystem management planning provide an institutional framework for solving the conflicting interests between oil drilling and the conservation of large areas of the Arctic Ocean?
National states govern large ecosystems, governing all human use of natural resources (Berkes, Colding & Folke, 2003: 75). The challenge for national governance is to integrate and coordinate international, national, regional and local interest groups in decision-making and implementing environmental policy (Jentoft, 1998, Carlsson, 2008). National governments have the political task of making decisions amongst conflicting human interests in regard to the exploitation of natural resources, creating a balance between different political goals, and finding solutions to social problems and conflicts of interests. The task of developing an environmental policy is a national obligation as a consequence of the ratification of international agreements, such as the Rio Declaration and UNESCO agreements (Ulstein, 2001; Hovi & Underdal, 2008; Sande, 2013). The methods used in this study are based on participant observation in national decision-making and a qualitative study of public documents (Sande, 2013).
National Government and Holistic Ecosystem Management of the Barents Sea
In 1980 the Norwegian Parliament opened the Barents Sea for oil drilling and exploitation. The sea area is south of 74 degrees north, which is now the limit of sea ice in wintertime. The Norwegian government has given 53 permits for oil drilling and exploitation in the Barents Sea. International oil companies have drilled 86 wells and discovered several fields for the production of oil and gas (Ministry of Oil and Energy, White Paper nr. 28, 2010-2011: 104). According to the Directorate of Oil, international oil companies have plans for 15 new wells in the Barents Sea in 2014. Due to the risk of large oil spills and the total destruction of the ecosystem in the Arctic Ocean, the Norwegian Parliament made a decision in 2002 to create a totally new system of management of large sea areas (Ministry of Environment, White Paper nr. 12.2001/2002; Knol, 2010; Arbo & Hersoug, 2010, Sande, 2013). The Ministry of Environment was given this task and developed a new system of “holistic governmental planning for large sea areas”. The Ministry of Environment invited the natural science research institutes and directorates responsible for managing natural resources onshore and offshore to take part in this development. In the process, 150 natural science researchers at 27 different research institutes and directorates used 500 million Norwegian crowns (100 million US dollars) in research and the development of a natural science-based management system of sea areas and large-scale ecosystems. This new policy was presented to the Norwegian parliament in 2005 and accepted as a new offshore policy (Ministry of Environment, White Paper nr.12, 2005-2006). The new management system is based on governing all human use of natural resources and the conservation of all parts of the ecosystem structure and functions (Knol, 2010). The decision in the Parliament related to research and planning and required revision periods of 5 years. Only the government and parliament have the opportunity to make decisions regarding the governance of all human activities at sea. The decision-making is institutionalized at the level of national Government and the decision uses only natural scientific knowledge as it is presented to them to make political decisions governing all human usage of the ocean. In March 2011 the Norwegian government finally announced its decision under its new revised management plan for the Barents Sea (Ministry of Environment, White Paper, nr. 10, 2010-2011). The national policy closed the sea area outside the Lofoten and Vesterålen Islands to petroleum activities and the area within 50 km of the ice-front, defined as the limit of 40% ice-cover in wintertime over the latest 10 years. As a political compensation, the Parliament opened, in 2013, 40 000 km2 of new coastal areas for petroleum activity in the Barents Sea along the border with Russia. These new concession blocks for petroleum activity are situated 35 km off the coast of Norway in the Barents Sea and south of 74 degrees north parallel. The political compromise within the government opened new areas for petroleum activity in the Barents Sea. The new conservative government of Erna Solberg supported in 2013 this policy of closing new areas in the Norwegian Sea, the Barents Sea and Costal zone of Norway for oil drilling for four years (Governmental declaration, Sundvolden, 2013-2017).
Political Government and Social Experiences
The analytical question is: is government based ecosystem management planning the institutional framework for solving the conflicting interests between conservation and oil drilling in the Barents Sea? This briefing report has presented a case study of national decision-making related to the development of large-scale ecosystem management in the Barents Sea. The issue concerned is the making of political decisions within government regarding conserving maritime biodiversity for the future and developing oil drilling and petroleum exploitation in the Polar Ocean. The national decision is based on national state implementation of different international agreements on the conservation of the Arctic Ocean and maritime biodiversity at the UN. The process of national implementation has produced national conflicts between petroleum stakeholders on the one hand and stakeholders of fishery and maritime conservation on the other. Politically, it is impossible to obtain a decision within the Norwegian government to secure the permanent conservation of key areas of the ecosystem. The key areas are the most important sea areas for the fisheries and for tourism in Norway, the Lofoten and Vesterålen Islands and the ice-front of the Barents Sea. The national experiment with ecosystem-based management has one outcome. The marine ecosystem based management is centralized at the national state level as the ideal type of national government system. This model of management has become an exclusive partnership between the national government and natural science institutions. This has made the local and regional level of democracy redundant, thereby concentrating power in the national government and parliament. The Norwegian Parliament has, in 2013, opened 40 000 km2 of the Barents Sea for drilling operations and petroleum exploitation while no new sea areas have been permanently made maritime reserves, national parks or world heritage. The Norwegian Government and Parliament has opened 25% of the sea areas in the Barents Sea and the Norwegian Sea for oil drilling and petroleum production while only 0.13% has been closed permanently as natural reserves, maritime reserves or national park areas.
Conclusions: Exploitation of the Barents Sea
Greenpeace is working internationally for a long-term solution on a governmental agreement embodying a permanent, equitable and overarching treaty or multi-lateral agreement that protects the Arctic Ocean. The solution sought is governmental and international agreement with permanent maritime reserves in the Polar Oceans. The Norwegian policy is permanent conservation of 10% of key areas for biodiversity production which includes the Lofoten Islands and ice-front of the Barents Sea. It has not been possible to implement this policy and thus far only 0.13% of the Norwegian Polar Seas are permanently protected as maritime reserves or national parks. The implementation of ecosystem based management of the Barents Sea has instead given the Government the opportunity to open a new sea area of 40 000 km2 for oil drilling, which is 3% of the Norwegian part of the Barents Sea. The innovation and implementation of ecosystem-based management has given the government and natural scientists more power at the national level. The result of the implementation of ecosystem management is the opening of 3% new areas for oil drilling and no new areas being permanently closed in regard to the natural conservation of the Arctic Ocean.
Andersen, G. (2011). Paper om systemøkologisk forvaltning av Barentshavet. Notat. Forskningsseminar i Kabelvåg. Bergen, Universitetet i Bergen.
Arbo, P. & Bjørn Hersoug. (2010): Oljevirksomhetens inntog i nord. Næringsutvikling, politikk og samfunn. Oslo, Gyldendal akademisk.
Berkes, F., J. Colding & C. Folke. (2003): Navigating Social- Ecological Systems. Building Resilience for Complexity and Change. Cambridge, Cambridge University Press.
Carlsson, L. (2008). Omstridd natur I teori och praktik. I: Sandstrøm, C. S. Hovik og E. I.
Dale, B. (2011). Managing Contingency: Risks and how they are perceived. Arbeidsnotat til Forskningsemarinar i Kabelvåg, 7th-9th February. Tromsø, Universitetet i Tromsø.
Fall, J. A., R. Miraglia, W. Simeone, C. J. Utermohle & R. J. Wolfe. (2001). Long-term consequences of the Exxon Valdez oil spill for coastal communities of South central Alaska. Alaska Department of Fish and Game. Juneau.
Havforskningsinstituttet. (2010). Det faglige grunnlaget for oppdatering av forvaltningsplanen for Barentshavet og havområdene utenfor Lofoten. Rapport fra Faglig forum, Overvåkningsgruppen og
Risikogruppen til den interdepartementale styringsgruppen for forvaltningsplanen. Havforskningstituttet. Fisken og havet, særnummer 1 a-2010. Bergen.
Hersoug, B. (2010). Fisk og/eller olje? In: Arbo, Peter and Bjørn Hersoug (red.) Oljevirksomhetens inntog i nord. Næringsutvikling, politikk og samfunn. Oslo, Gyldendal akademisk.
Holm, P. (2001). The Invisible Revolution. The Construction of Institutional Change in the Fisheries. Norwegian College of Fishery Science. Tromsø, University of Tromsø.
Hovi, J. & A. Underdal. (2008). Internasjonalt samarbeid og internasjonal organisasjon. Oslo, Universitetsforlaget.
Jentoft, S. (1998). Allmennings komedie. Medforvaltning i fiskeri og reindrift. Oslo, Ad Notam, Gyldendal forlag A/S.
Knol, M. (2011). Scientific advice in integrated ocean management: The process towards the Barents Sea Plan. Marine Policy 34 (2), page 252-260.
Knol, M. (2011). Ecosystem-based management as governance. PhD theses at University of Tromsø, Tromsø.
Kristoffersen, B. (2011). Actors and processes in the debate over whether to open for petroleum development in Lofoten and Vesterålen. Paper presented at Workshop in Kabelvåg, 7-9. February 2011. Tromsø, University of Tromsø.
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Ott, R. (2005). Sound truth and corporate myth: The legacy of the Exxon Valdex oil spill. Cordova Alaska, Dragonfly Sisters Press.
Øvrebekk Lewis, Hilde (2013). Vi kan begynne boring i Arktis nå. Stavanger Aftenblad, 16.oktober.
Sande, A. (2013). Slaget om Lofoten. Olje eller verdensarv? Oslo, Akademika forlag A/S.
Sandstrøm, C. S. Hovik og E. I. Falleth (red) (2008): Omstridd natur. Trender och utmaningar i Nordisk naturforvaltning. Umeå, Borea forlag.
Sundby, S., P. Fossum, A Sandvik, F. B. Vikebø, A. Aglen, L Buhl-Mortensen, A. Folkvord, K. Bakkeplass, P. Buhl-Mortensen, M. Johannessen, M. S. Jørgensen,Trond Kristiansen, C. S. Landa, M. S. Myksvoll og R. Nash (2013): Kunnskapsinnhenting i Barentshavet – Lofoten – Vesterålen. Rapport 3, Bergen, Havforskningsinstituttet.
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Social License to Operate for Mining Companies in the Russian Arctic: Two Cases in the Murmansk Region
Larissa Riabova & Vladimir Didyk
This paper presents research notes discussing the theme of social licensing of the mining companies in one of the mining regions in the Russian Arctic. The paper is the outcome of the authors’ participation in the research project “Sustainable Mining, local communities and environmental regulation in Kolarctic area” (SUMILCERE).1
The project is funded by the Kolarctic European Neighbourhood and Partnership Instrument of Cross-Border Cooperation (ENPI CBC) Programme and is carried out by researchers from several institutions in Finland, Norway, Russia and Sweden: University of Lapland, Northern Research Institute (NORUT, Tromsø), Institute of North Industrial Ecology Problems and the Luzin Institute for Economic Studies of the Kola Science Centre of the Russian Academy of Sciences, Luleo University of Technology. The lead partner of the project is University of Lapland; the project period is 2013-2014. The research within the project is carried out through 3 thematic research sub-projects. The authors of the paper were involved in the Working Package 1 (WP 1) lead by Dr. A. Buanes from NORUT. The thematic task of the WP 1 is “Current practices on the participation and relationships between mining projects and local mining communities in order to develop the suggestions for the social licensing”.
Within the SUMILCERE project the authors have conducted case study research aimed to understand whether and how the social license concept is used in Russia. This research note briefly presents the theoretical background for the study and discusses the results of the case study of the two mining and processing companies operating on the territories of the Kirovsk and Apatity municipalities in the Murmansk region. Data for the study have been obtained from scientific literature, statistics, media sources and through the semi-structured interviews conducted by the authors during the fieldwork in spring of 2014 with officials from the Kirovsk and Apatity municipalities, deputies of their municipal Councils, the representatives of both mining companies and ordinary people living in both municipalities.
Social License to Operate: Theoretical Aspects
The emergence of the “social license to operate” (SLO) concept is connected with growing public concern in many countries during the 1990s in the results of mining activities. These concerns arose due to a series of environmental damages made by some mining projects which evoked sharp conflicts of the companies with local communities. The term “social license to operate” was suggested by Canadian mining expert James Cooney in early 1997 at the meeting with the World Bank personnel. He suggested this metaphor to explain the quality of the relationship between a mining project and its host community (Thomson, Boutilier, & Black, 2012). The concept and terminology surfaced in May 1997 in discussions at the conference on mining and the community in Quito, Ecuador, sponsored by the World Bank (Thomson & Boutilier 2011: 1779).
According to the definition given in one of the documents of the World Bank, “a social license to operate is the acquiring of free, prior and informed consent of local communities and stakeholders” (Pike, 2012). R. Pike, who cited the definition in his article, stressed that “this is part, but not the whole, of the social license. The whole consists of both the acquisition and on-going maintenance of the consent of the local stakeholders” (ibid).
The SLO concept has several conceptual roots. Among them there are sustainable development and multilevel governance concepts, as well as the concept of corporate social responsibility (Buanes 2014). A very important pillar of a social license to operate is corporate social responsibility (CSR), widely understood as “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large" (World Business Council for Sustainable Development). According to an article of web resource for Canadian Mining Information – “the concept of “Social License to Operate” comes from the continuous study of the broader, older, and better established notion of “Corporate Social Responsibility” (Miningfacts 2012). Hence the SLO could be regarded as one of the derivatives of CSR.
In the literature, a social license is often regarded as having three normative components: legitimacy, credibility, and trust; and four levels of social license: withdrawal, acceptance, approval and identification with the project psychologically, or co-ownership level (Prno & Slocombe, 2012; Thomson & Boutilier, 2011). Meanings of the components and levels are described by Thomson & Boutilier (2011).
Defining the terms legitimacy, credibility, and trust Thomson and Boutilier (2011) suggested the following approach. First, they define legitimacy drawing on the Knoke’s approach who put legitimacy in the context of stakeholders and politics as “the acceptance by the general public and by relevant elite organizations of an association’s right to exist and to pursue its affairs in its chosen manner” (Knoke, 1985). As to credibility, Thomson & Boutilier (2011) see it as the foundation of trust. “When a company is regarded as credible, it is seen as following through on promises and dealing honestly with everyone” (ibid: 1785). Trust is fundamental to moving through the levels, and can take two basic forms: interactional trust and institutional trust. Interactional trust is observed when there is the perception that the company and its management listens, responds, keeps promises, engages in mutual dialogue, and demonstrates reciprocity in its interactions. Institutionalised trust takes place when there is the perception that relations between the stakeholders’ institutions (e.g., the community’s representative organizations) and the project/ company are based on an enduring regard for each other’s interests (Williams & Walton, 2013: 9, based on Thomson & Boutilier, 2011).
According to Thomson and Boutilier, the levels of SLO represent “how the community treats the company” (Thomson & Boutilier, 2011: 1784). The normative components (legitimacy, credibility and trust) serve as the boundary criteria dividing the levels. The levels represent how the community views the company in connection with the company’s behavior.
The levels and normative components (the boundary criteria) are arranged in a hierarchy, which could be interpreted as phases of earning a social license. Withdrawal level constitutes the lowest level of the hierarchy. It is the worst-case scenario meaning rejection of the SLO for a company. In this case realization of a project could even be stopped.
Acceptance level is the minimal objective for any company interested in its relations with the local community. It gives a company a social license for the project to proceed. The level could be achieved when the criterion of legitimacy boundary is met – not only legal legitimacy, but also pragmatic (based on audience self-interest), moral (based on normative approval) and cognitive (based on comprehensibility and taken-for-grantedness) ones (Thomson & Boutilier, 2011: 1784).
Approval is the level where a community regards the project as favorable. Approval could be granted to a company for the project realization when the company established both legitimacy and credibility (foundation of trust). This level of SLO represents the absence of sociopolitical risk.
Identification with the project psychologically (Prno & Slocombe, 2012), or co-ownership as Thomson and Boutilier (2011) suggest, is the highest level of social license when the community sees the company as having full trust in it. In this case the community shares responsibility for the project’s success. Psychologically, both parties come to view it as a co-ownership arrangement. The level could be achieved when the full-trust boundary criterion is met – communities that have full trust in a company believe that the company will always act in the community’s best interest (Thomson & Boutilier 2011: 1784-1786).
A recent evolution of this framework models SLO as three levels comprising economic legitimacy at the base; socio-political legitimacy and interactional trust as the mid-tier; and institutionalised trust as the highest level (Boutilier & Thomson 2011; Williams & Walton, 2013). These four factors represent a continuum and are displayed in Table 1. The authors distinguish between perceptions of the company’s behaviour at the regional (socio-political) scale and perceptions of its interactions with individuals.
Table 1. Four factors constituting three levels of SLO (after Thomson & Boutilier 2011) (Williams & Walton, 2013: 9)
Level and Label
Role in Determining SLO Levels as Described in Thomson & Boutilier Pyramid Model
1. Economic legitimacy
The perception that the project/company offers a benefit to the perceiver
If lacking, most stakeholders will withhold or withdraw the SLO. If present, many will grant an acceptance level of SLO
2a. Socio-political legitimacy
The perception that the project/company contributes to the wellbeing of the region, respects the local way of life, meets expectations about its role in society, and acts according to stakeholders’ views of fairness
If lacking, approval level of SLO is less likely. If both this and interactional trust (2a & 2b) are lacking, approval level is rarely granted by any stakeholder
2b. Interactional trust
The perception that the company and its management listens, responds, keeps promises, engages in mutual dialogue, and exhibits reciprocity in its interactions
If lacking, approval level of SLO is less likely. If both this and socio-political legitimacy (2a & 2b) are lacking, approval level is rarely granted
3. Institutionalized trust
The perception that relations between the stakeholders’ institutions (e.g., the community’s representative organizations) and the project/ company are based on an enduring regard for each other’s interests
If lacking, psychological identification is unlikely. If lacking but both socio-political legitimacy and interactional trust are present (2a & 2b), most stakeholders will grant approval level of SLO
The concept of an informal social license is “comfortably compatible with legal norms in the countries that operate under the principles of common law” (Thomson & Boutilier 2011: 1780). However, in the countries with legislatures operating under the principles of civil law (i.e. Finland, Russia, Norway, and Sweden) “the concept runs into difficulties” (ibid). The difficulties are related to the legal norms in these countries which constitute that only the official authorities can grant a license and, thus, many companies equate the license with formal permission to operate.
The SLO concept as well as different aspects of its practical use attracted high interest among scholars in many countries during the last years, especially in Australia, Canada and Finland. Beside the authors we have already referred to, see, for example, Kokko et.al. 2014; Lacey et.al. 2011; Nelsen & Scoble 2006; Thomson & Joyce 2008; Tognato 2011. For the Russian scientific discourse the concept of social licensing is quite new, and there are very few publications related to this theme.
Social License for the Mining Companies in the Russian Arctic: Relationships of Two Companies with the Local Communities
For the case study research on whether and how the social license concept is used in Russia we have chosen two mining and processing companies and two municipalities. Both companies have mines located in the central part of the Kola Peninsula in the Khibiny mountains, on the territory of the Kirovsk municipality, and processing plants in the Kirovsk and Apatity municipalities of the Murmansk region – one of the oldest mining regions of Russia located in the Arctic Zone of the Russian Federation. The first one is “Apatit” Joint Stock Company, which over 80 years has been extracting and processing apatite-nepheline ore (raw material for phosphorus fertilizers). The second one is the young “North-Western Phosphorous Company” Ltd (NWPC) that in 2007 started development of two deposits of apatite-nepheline ore “Olenyi ruchei” and “Partamchorr” in the eastern part of the Khibiny mountains (Bay-Larsen et. al., 2014).
The total number of population in the Kirovsk municipality by the beginning of 2012 was 30,600 people. The administrative centre of the municipality is the town of Kirovsk, founded in the beginning of the 1930’s, upon the decision of the Soviet government on the development of rich deposits of apatite-nepheline ore discovered in the 1920’s. The population of the town of Kirovsk is 28,400 people, and 2200 people live in two rural settlements of the municipality – Titan and Koashva; the latter is tightly connected to mining activity, too (“Municipalities of the Murmansk region” 2012).
“Apatit” company belongs to the group of companies “PhosAgro”, one of the biggest fertilizer manufacturers in Russia and around the world. It has four open and underground mines and two processing plants, and the total number of its employees reached 11,600 in 2012. The company is the town-forming enterprise for Kirovsk, which is officially recognized as a single-industry town, being included in the special Register of the RF Ministry of regional development. The company produces more than 90% of the total volume of the town’s industrial production and employs 30% of the town’s workforce (6400 out of 21,000 of the working age population). One of the company’s processing plants is located in Apatity – a neighboring city with a population of almost 60,000 people. About 5000 people living here are employed by the company.
Being the owner of a big part of the social infrastructure in the Soviet period and playing an essential role in social policy at the local level, “Apatit” used to be the socially responsible company not only towards its employees, but for several above mentioned local communities. Even though strategic decisions have been taken in Moscow, the company’s operational decision making, including social policies, was greatly locally based and the top managerial staff used to have strong personal attachments to the local community.
The inherited Soviet-era socially responsible behavior continued in the post-soviet period. It was stated in the interview with a top-manager of the company that the main motives for the company’s social activities are:“...the desire to establish good reputation on the domestic and international business arenas, the wish to support the town which is home for the company’s employees, the whish to demonstrate good image of the company to the authorities at all levels and to the local community, and the long-lasting since the Soviet times tradition of the company’s social responsibility”.
Additionally, the company is motivated by requests from different levels of governmental or political bodies and by the international requirements for corporate codes of conduct.
The company has been doing a lot for the towns’ improvement, repairing roads and reconstructing social infrastructure – for example, it financed full reconstruction of the lakeside promenade and of the swimming pull in Kirovsk in 2008-2012 and granted 20 million RUB for the renovation of the department of intensive therapy at the city hospital in Apatity in 2013. It also used to buy equipment for the hospitals in Kirovsk and Apatity and regularly organized the contests of socially important projects “Problems of our town we resolve together” and funded the realization of these projects. Due to its long-time role of main-employer enterprise in Kirovsk and regular social activities in several local communities, “Apatit” used to enjoy strong trust among the inhabitants of these communities, and in Kirovsk even a psychological identification with the company for a major proportion of the community. For instance, a deputy of Kirovsk municipal Council stated:
“In the meetings with people in Kirovsk, especially with the older generation, I’ve many times heard that they considered their lives and destinies inseparably linked with “Apatit” company”.
In accordance with the SLO concept, such attitudes pointed to the high level of social license that for decades had been given to the company. However, lately the level of social license for “Apatit” company has decreased. Since April 2013 “Apatit” company, due to the decision of its main owner (based in Moscow managing company “Phosagro AG”), started a deep-restructuring program aimed at the reduction of operational costs and growth of labor productivity. The restructuring anticipates the dismissal of 2420 employees and the phasing out of the company’s internal servicing subdivisions towards outsourced companies (Information, 2014). As a result, the total number of the company’s employees dropped from 11,600 to 7600. people by the beginning of 2014. This has led to the decision of the special governmental commission of the RF to include Kirovsk in the list of single-industry towns with the most difficult socio-economic situation (List, 2013). In addition, during the last decade the company has been transferring all of its social objects (sport complex, palace of culture etc.) to the Kirovsk municipality. As a result, the burden for the municipal budget notably increased.
It is worth mentioning that over the last decade, first, decision-making processes in regard to the company’s activities, including its social policies, have concentrated outside of the Kirovsk municipality – in the company’s head-quarters in Moscow and other towns of central Russia. Second, gradually the top managerial staff of the company has been replaced by the newcomers from outside the community. In interviews, a gradual loss of the top-managers’ local attachment is seen as one of the reasons for the weakening of the company’s social responsibility. In one interview a top-manager of “Apatit” company stated:
“Trust is the main thing. If there is no trust between the company and people, living in the towns, nothing good will come out. It is not possible for the company to possess trust if we (the company) don’t speak about social problems and don’t solve them. It is absolutely important to have locally attached leadership of the company, the leaders who was brought up here, who love, respect and understand the place”.
These events strongly influenced public attitudes towards the company and have lowered the SLO level. During the last years it decreased, and as of today we estimate it as “approval”, or even as the lower “acceptance” level.
The second case is the new “North-Western Phosphorous Company” Ltd. It was founded in 2005 as a subsidiary company of JSC “Acron”, a large fertilizer manufacturer and consumer of apatite concentrate in Russia. “Acron” previously consumed the concentrate from “Apatit” and, due to the monopolistic position of the latter on the Russian market, had contradictions with “Apatit” concerning the prices for the concentrate. “Acron” has created the NWFC to ensure its own source of raw material. In October 2006, NWPC won a contest for acquiring the state mining permit to develop two new deposits of apatite-nepheline ore “Olenyi ruchei” and “Partamchorr”. In 2007 the construction of the mine and processing plant at “Olenyi ruchei” deposit for production of the apatite concentrate began. In 2012 their exploitation was started (Bay-Larsen et al., 2014). Today NWPC employs about 2000 people, of which more than half live in the city of Apatity.
Implementation of the new project caused serious conflicts between several interest groups. Firstly, was the conflict between “Apatit” company and the newly appeared NWPC, since they became direct competitors for the production and supply of apatite concentrate in Russia. Moreover, the new competitor has started to use the ore deposits which “Apatit” considered its own prospective reserves. Secondly, initiation of the construction of the mine and the new ore processing factory caused a conflict with environmental NGOs since the deposits and processing plant were located in close proximity to the “Khibiny” National Park, which is planned to open in 2015.
In spite of the conflicts, the implementation of the new mining project was actively supported by the government of the Murmansk region. The support was provided mainly due to large investments (around 1 billion USD) on the territory of the region and expectations for the additional tax revenues to the regional budget. It was also supposed that implementation of the project would provide benefits to the Kirovsk municipality: Additional working places for the locals (along with the weakening almost monopolistic position of the “Apatit” company as an employer in the local labour market) and good prospects for the revival of the formerly depressed rural settlement Koashva situated in the vicinity of the newly developed deposits (Bay-Larsen et al. 2014).
There are many examples of the social activities of NWPC, such as investing in the reconstruction of several municipal social objects, in particular on the territory of Koashva settlement – renovation of the house of culture and the first-aid station, establishing of the youth center, a children’s playground, and others. However, dissatisfaction with the social and environmental aspects of the new company’s behavior was one of the main themes in the interviews. As the interviews with employees of the company revealed, they are not satisfied with the social policy of the company first of all towards its own employees. As an example they mentioned the recent canceling of quarterly monetary premiums that notably decreased the level of wages, weak concern for the creation of favorable working environments and the absence of adequate compensations for unhealthy job conditions. Such irresponsible behavior was largely explained by the extremely weak attachment of the new company’s leadership to the community since the company’s decision-making is taking place outside the territory where the company operates (from the head-quarters of its ultimate parent – JSC “Acrone”) and the top level managers are almost entirely from outside the municipality. A reason for the negative attitudes was also the company’s conflict with environmental NGOs on the “Khibiny” National Park. The conflict reached its peak in 2012 due to the intention of the new company to build the technological road for ore transportation from the “Partamchorr” mine to the processing plant near the “Oleniy ruchei” mine. The road (about 30 km long) had to cross the area of the planned National Park. Local ecological NGOs were strongly against the road construction. To resolve the conflict the regional government initiated the creation of a commission with participation from various interested parties, including representatives of NWPC, ecological NGOs and research organizations. The conflict was actively discussed in the local media and among the members of internet communities, but public hearings, which were conducted at the planning stages of the new project in 2006, were not used this time for its resolution. After long and hard negotiations involving the RF Ministry of Natural Resources and Ecology, a compromise was found. It was decided that the company would cancel the initial plan of ore transportation through the nature reserve and organize processing directly on the “Partamchorr” mine site. The decision negated the necessity to construct the road and satisfied the demands of local environmentalists.
An example of prevailing attitudes from the representatives of the Kirovsk local community to NWPC could be found in the opinion of this municipal official:
“Almost everything what NWPC does for the Kirovsk municipality is done mainly for their selfish interests. Most of their social doings are done because it is required by the state mining permit – it prescribes to transfer annually during several years the sum equal to $1.5 million USD to the municipality for social goals”.
The latest conflict caused by the lack of social activities on the part of the new company occurred in April 2014 when the local government of the city of Apatity filed a claim in Court in the amount of $5.6 million USD to NWPC, requiring it to pay the debt from the execution of the company’s social obligations towards the Apatity municipality. The obligations were obtained from the 2006 state mining permit to develop the “Partamchorr” deposit (NWPC, 2014). Municipal authorities accused the company of avoiding fulfilling the agreement on socio-economic partnership that was stipulated in the state mining permit, and failed to transfer the funds for the development of the city. Such agreements, which have been concluded by NWPC with the Kirovsk local government in the past, have been usually fulfilled.
The study revealed that the new company NWPC has not acquired full trust and support from the majority of the local population in the municipalities of Kirovsk and Apatity. The level of SLO given to NWPC in both municipalities we estimate as “acceptance”, however, getting closer to “withdrawal”.
Discussion and Conclusions
This case study has shown that neither the officials and politicians of the Kirovsk and Apatity municipalities, nor the representatives of the two mining companies described here are familiar with the concept of social licensing. On the corporate side, obtaining and maintaining a high level of social license from the local communities has not been explicitly declared as one of the companies’ goals. This is typical for companies in Russia, however, where the SLO concept is quite new even in the scientific discourse.
By contrast, the concept of corporate social responsibility (CSR) – one of the pillars for the social licensing concept – is widely used. The main motives for the mining companies’ social activities include the wish to demonstrate good image of the company to the authorities at all levels (federal, regional and local) and to the local community; the desire to establish a good reputation in the domestic and international business arenas; the wish to support the town which is home for the company’s employees (as the case of “Apatit” company demonstrates); and the long-lasting tradition, going back to the Soviet-era, of CSR. Furthermore, demands for CSR can also be laid down within the state mining permit (as it was in the case of the new company NWCP in our study). Additionally, the companies can be motivated by requests from different levels of governmental or political bodies and by international requirements for corporate codes of conduct. Also, an important motive, as our study has shown, is basing the company’s decision-making locally and, especially, a strong personal attachment of the top managerial staff to the towns where the companies operate.
Building relations with communities on the concept of corporate social responsibility, and being motivated by internal (corporate, such as considerations of image, tradition or, in the case of strong attachment of top management to the place, a desire to support the local community) and external (institutional requirements, e.g. the state mining permit) factors, the companies do not prioritize the attitudes from the local population which, we believe, is the essence of the SLO concept. At the same time, drawing on the CSR concept, the companies possess certain levels of social license, and themes which are central to the SLO concept such as trust, acceptance, and compensation are present in the local mining discourse, though sometimes implicitly.
Institutionally in Russia, relations between the municipalities and large resource-based companies often are framed by bilateral, trilateral or multilateral agreements on socio-economic partnerships between the company, municipality and/or regional government. However, so far, as a rule, the local population plays a minor role in determining their content. The study has shown that on the community side, instruments such as public hearings were not used for decisions on the content of the agreements in any of the cases studied, a quite typical situation. Moreover, changes in federal legislation related to environmental impact assessment introduced in 2006 cancelled the norm to conduct public hearings for most of the mining projects, with an exception for projects occurring on the territories of protected areas.
Such factors as generally weak development of institutions of public participation and organizational weakness of civil society, typical for many of the post-communist societies, as well as often low levels of cross-community social capital do not allow strong local communities’ participation to influence mining companies’ activities.
However, even under such conditions there are instruments that make it possible to voice out and to meet the local demands for socially responsible behavior of the companies. As the case of the conflict of NWPC and local plans for the establishing the nature reserve revealed, it can be local information campaigns on the acute problems in the “company-community” relations, establishing the multilateral commissions for conflicts of interest solving, or lawsuits from the local government against the company demanding the compensations stipulated in the state mining license.
To sum up, today the social license concept is a “white spot” in the Russian Arctic mining discourse, both theoretically and practically. However, the SLO concept can be an important and highly relevant instrument for the adoption of sustainable mining practices in the Russian Arctic. Thus, there is a need for more research in this field in the Russian Arctic context and for popularization of their results to promote the practical use of social licensing in corporate and public policies.
1. Information on the project can be found at: http://www.ulapland.fi/InEnglish/Units/Faculty-of-Law/Research/Research-Projects/SUMILCERE.
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Buanes, A. (2014). Social License to Operate – A Relevant Concept for Northern Mining? Mining projects between legal requirements and local acceptance – with case studies from the European North. Presentation at the SUMILCERE meeting, Luleå, 11th June, 2014. Unpublished.
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Lacey, J., Parsons, R., Moffat, K. (2012). Exploring the Concept of a Social License to Operate in the Australian Miningand Minerals Industry: Results from Interviews With Industry Representatives. CSIRO, Brisbane.
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Main Expected Changes in Legislative Regulation of Environmental Protection for Environmentally Hazardous Facilities in the Russian Arctic
According to the main documents on Russian Arctic development, the Arctic is considered as the strategic resource base of Russia. Under the conditions of increasing economic activities and global climate changes, preservation and protection of the Arctic environment, and also elimination of ecological consequences of economic activities, are the main goals of Russian state policy in the field of ensuring environmental safety of the Arctic. For minimization of negative impact on the Arctic environment, an increase in enterprises’ responsibility for environmental pollution is required. At the same time, in order to implement the state policy in the field of socio-economic development of the Russian Arctic, state support is provided to economic agents, which are carrying out their activities in the Arctic Zone, primarily in the field of development of hydrocarbon resources, other minerals and water biological resources.
The Main Expected Changes in Environmental Regulation
Currently, Russia is in the process of reforming its environmental and use of nature governance. One of the objectives of the reform is to differentiate economic agents at the level of potential environmental pollution and (or) of impact on human health and to apply to them proportionate measures of state regulation. The differentiated approach is provided for the separation of objects that have a negative impact on the environment in four categories (Figure 1).
Figure 1: Differentiation of economic agents at the level of potential environmental pollutionFor objects in Category IV, measures of state regulation in the field of environmental protection will not be applied. The main measures of state regulation for the other objects are shown in Table 1.
Categories of economic agents
Quantity of economic agents (objects)
Measures of state regulation
1. Agents with significant potential of environmental pollution (Environmentallyhazardousfacilities - 99 % of negative impact on the Russian environment), including:
- The establishment of standards for permissible emissions, discharges (the technological standards) by integrated permitting;
- The implementation of the state environmental control at the federal level;
- Carrying out the state ecological expertise.
- a negative impact on air;
- a negative impact on water bodies.
2. Agents with moderate potential of environmental pollution
- Submission of a declaration of the planned emissions, discharges volume
3. Agents with small potentialof environmental pollution
- Submission of a report about the volumes of actually made emissions, discharges in the notification procedure
Table 1: Government regulation of economic agents based on their category in the field of environmental protection
Under the technological standards there will be understood the norms (standards) of permissible emissions, discharges, wastes, water and electricity consumptions, and levels of physical impacts, which are set for the main technological processes and equipment of the best available technologies (BAT) using their technological indicators. Setting these technological indicators is assumed by normative documents after the development of information and technical reference books based on European BREF catalogs, adapted to economic and geographic Russian conditions. It should be noted that for the process of equipment reconstruction, impact on the environment which does not exceed the technological indicators of BAT, is also recognized as the implementation of BAT. Thus achieving technological standards will allow the environmentally hazardous enterprises to have the minimal pressure on the environment at the present stage of development.
For the realization of economic activities, objects with a significant potential for pollution (category I) will be required to contact a territorial agency of the federal executive authority with the application for an integrated environmental permit. The federal executive authority will approve the list of category I objects that need to get the integrated environmental permit between 01/01/2019 and 31/12/2022. This list will include up to 300 objects that have a negative impact on the environment, whose contribution to the total emissions, discharges of pollutants in the Russian Federation is not less than 60 percent. The remaining category I objects must get the integrated environmental permit before 01/01/2025.
For agents with a significant potential for environmental pollution (so-called environmentally hazardous facilities) related to the fields of application of a best available technology (BAT) there is a transition phase provided for technological standartization that creates economic incentives for modernization, including environmental ones. This will have a direct impact on the financial and economic activity of the environmentally hazardous enterprises.
The main legal act, on the basis of which there will be carried out changes in environmental regulation and management in Russia, is the Federal Law of 21 July 2014 N 219-FZ “On Amending the Federal Law ‘On environment protection’ and some legislative acts of the Russian Federation”, which comes into force on January 1, 2015, except for certain provisions (hereinafter – Federal Law N 219-FZ). This act proposes to intensify the economic sanctions on businesses exceeding limits of permissible impact due to increasing coefficients on the rates of payment for the negative impact on the environment (Table 2).
Types of negative impacts
For emissions / discharges within technological standards after the implementation of BAT
For emissions / discharges within acceptable standards and for waste of production and consumption within the limits
For wastes to be temporary accumulated and actually used (recycled) in own production in accordance with the technological regulations or transferred for use within the prescribed period
For emissions/discharges of pollutants within the temporarily permissible emissions/discharges for the period of realization of the environment protection plan or the program to improve the eco-efficiency
For wastes placed above the established limits
For emissions / discharges of pollutants exceeding temporarily permissible emissions / discharges
Table 2: The change of the coefficients to the rates of payment for negative impact on the environment
Within the framework of the reform, it is expected to reduce the list of regulated pollutants, and define a list of substances banned for emissions or discharges by March 31, 2016; and at the same time increase the base rates for negative impact on the environment. It is supposed to keep the system of temporary permissible emissions/discharges for a seven-year period provided that the reduction plans of negative impact on the environment or the BAT implementation programs (eco-efficiency programs) will be carried out. In the case of failure to comply with reduction of emissions, discharges within 6 months after the due date specified in the plan or the program, the calculated payment shall be recalculated applying the coefficient 100.
So the fees for emissions/discharges of pollutants could increase up to 5 times compared with the present period.1
The Forms and Conditions of State Support for BAT Implementation
State support for BAT implementation in the form of tax incentives; benefits in respect of payments for negative impact on the environment; and state capital investments is provided for in the reforms. These incentives will be given to enterprises if they realize such measures as:
1) Implementation of BAT;
2) Design, construction, reconstruction of:
• recycling and wastewater free water supply systems;
• centralized water disposal systems, sewer systems, local structures and equipment for wastewater treatment, including drainage water, for treatment of liquid waste and sewage sludge;
• constructions and installations for the capture and utilization of emitted pollutants, heat treatment and cleaning of gases before their emission in the atmosphere, for the beneficial use of associated petroleum gas;
3) Installation of:
• equipment to improve fuel combustion modes;
• equipment for the use, transportation, neutralization of the production and consumption waste;
• automated systems, laboratories for the control of the composition, the volume or weight of waste water;
• automated systems, laboratories (stationary and mobile) to control the composition of the pollutants and the volume or weight of their air emissions;
• automated systems, laboratories (stationary and mobile) to monitor the state of the environment, including natural environment components.
At the same time Federal laws and regional laws may establish other measures of state support, at the expense of federal and regional budgets.
Reducing sum of payments for negative impact on the environment on the sum of costs for financing the above measures can be regarded as benefit for the enterprises. It is necessary to consider that these payments affect the enterprise profit indicators, as they are included in production costs if the economic agent’s impact on the environment is within the permissible standards, and when the economic agent exceeds the permitted standards, the fees are levied from the profit.
As a result of reforming the environmental standardization system and introducing incentive coefficients, fees for negative impact on the environment will be around 2% of the cost structure of environmentally hazardous enterprises.
Some Strategic Documents and the Main Tasks in the Field of Environmental Development
Several strategic documents in the field of environmental development of our country were accepted in 2012 and 2014.
First of all, the Russian President approved “Basics of state policy in the field of environmental development of the Russian Federation for the period up to 2030” (hereinafter – “Basics…”). According to the “Basics…” the strategic goal of the state policy in the field of environmental development is to solve social and economic tasks, providing for an environmentally-oriented economic growth, preservation of a favorable environment, biodiversity and natural resources to meet the needs of present and future generations, their human right to a favorable environment, the strengthening of law enforcement in the field of environmental protection and environmental safety. On December 18, 2012 the Action Plan for the implementation of “Basics…” was endorsed by the order of the government of the Russian Federation № 2423-p. Among the main tasks of the state environmental policy are: providing environmentally oriented economic growth and introduction of eco-efficient innovative technologies, and also preventing and reducing the negative current impact on the environment. The mechanisms of these tasks realization are:
• Registration of absolute and specific indicators of the efficiency of natural resources and energy use and the negative impact on the environment;
• Environmental regulation based on the technological standards, under the condition of acceptable risk to the environment and human health;
• Step-by-step elimination of the practice of setting the temporary above permitted standard emissions and discharges.
Secondly, on the 15th of April, 2014, the State Program of the Russian Federation “Environment 2012 to 2020” was approved by the RF Government Decree № 326. Taking into account the priorities of the state policy in the field of environmental protection the objective of the Program is to improve environmental safety and preservation of natural systems. It includes financing for a subprogram named “Regulation of Environmental Quality” which consists of over 70 billion rubles from the federal budget.
The transition to the new state regulation system in the field of environmental protection will take about 10 years. The main tasks of the transition to this system are presented in the Table 3.
- Put all objects of economic activity on the state records;
- Differentiation of enterprises according to the degree of impact
- Adaptation of sectoral BREFs to the Russian conditions;
- Enterprises must prepare the action plans to reduce the negative impact on the environment.
- A ban on putting into operation new facilities whose emissions / discharges do not correspond to the BAT, except for those companies that received a building permit before 01.01.2019
- Implementation of the transition to integrated environmental permits and declaring of the negative impact on the environment.
- Increase in the coefficients to the rates of payments for emissions / discharges of harmful substances (pollutants) within the temporarily permissible emissions / discharges carried out with their excess
- Administrative restrictions will address the existing businesses
Table 3: Main tasks of the transition to the new system of state regulation in the field of environmental protection
In accordance with the “Plan of the Ministry of Natural Resources and Ecology of the Russian Federation for 2013 to 2018”, by the fourth quarter of 2017, the normative legal acts necessary for the implementation of the Federal Law N 219-FZ must be approved, Russian sectoral BREFs published and organizational measures for the functioning of a new system of integrated environmental permits implemented.
It is expected that not less than 30 major companies will have integrated environmental permits by the fourth quarter 2018 and will have begun to realize ecological modernization programs.
In order to provide reliable information about the level of impact on the environment, objects category I, stationary sources, the list of which is established by the Government of the Russian Federation, will have to equip their stationary sources with automated tools measuring and accounting emissions and discharges as well as technical communication to the state fund of the state environmental monitoring data.
The Important Environmental Protection Measures at the Current Stage
Thus, in the context of the transition to technological standardization for environmentally hazardous facilities in the Russian Arctic, environmental protection measures such as the following become important:
• Creation and implementation of automatic control system for the composition and volume of wastewater discharges;
• Creation of automatic control systems for air pollution, equipping emission stationary sources of control devices, construction, purchase and equipment of laboratories for air pollution control;
• Construction of facilities and manufactories of raw materials production or finished products from production wastes;
• Research and project works aimed at the environmental safety of production.
Now, companies can finance the implementation of theses measures within the accrued sum of payments for negative impacts on the environment, by reducing this sum on incurred expenses.
Stricter requirements in the field of environmental protection will have a major impact on the enterprises that could potentially become significant polluters. Such companies need to use methods of strategic environmental planning to receive economic benefits from the state.
Not only environmental quality of products will be critical in the competitive struggle in the long term, but also the mode of production with use of the BAT, which combine minimal negative impact on the environment, and the rational use of nature and economic efficiency.
There is the economic possibility and practicability of using regulatory mechanisms to reduce fees for negative impact on the environment as the instrument to stimulate the transition of enterprises to the best available technologies.
1. The History of the development and use of environmental policy instruments in the Russian Federation, including the system of payments for negative impact on the environment, is considered in detail in the publication Environmental Policy and Regulation in Russia. The implementation challenge. OECD. (2006) Available at http://www.oecd.org/environment/outreach/38118149.pdf
This study was funded by the Russian Foundation for the Humanities as part of research project № 14-12-51003 “Optimization of the executive authorities of the Murmansk region in the field of environmental protection and nature management at the present stage of the reform of public administration”.
The Right Not to be Indigenous: Seal Utilization in Newfoundland
The discussion surrounding the commercial seal hunt has for many decades revolved around the well-being of individual seals and claims of cruelty have long been the centrepiece of opposition towards the hunt. This opposition stands in contrast to the acceptance of Inuit or indigenous seal hunts irrespective of the numbers of seals hunted and animal welfare considerations. This is based on the high cultural and utilitarian value a seal represents in Inuit society and culture and this narrative has equally found its way into political processes and legislation, such as the recent ban on trade in seal products on the European internal market, Regulation 1007/2009 on Trade in Seal Products.
This Briefing Note claims that the utilization of seal stemming from commercial hunts in Newfoundland, where the largest commercial seal hunt is conducted, goes beyond the notion of commercialisation and represents a cultural, utilitarian and identity-giving means while being an important element in the social cohesion of the island’s coastal communities. It claims that the discourse on seals and sealing is biased as it does not consider cultural and social elements of the hunt and the industry. Results stem from fieldwork conducted in April, May and November 2013 in the communities of Woodstock, Blaketown and South Dildo, Newfoundland.
Seal Utilization in EU Political Discourse
The preparatory works leading to the adoption of the EU seal products trade ban have been well documented and shall not be reproduced here (see De Ville 2012; Sellheim 2013a; Wegge 2013). The underlying motivation for the European legislative to adopt a ban on trade in seal products was to reduce the suffering of seals by decreasing demand for seal products through blocking the EU’s market for products stemming from commercially hunted seals. While the Commission Proposal from 2008 still saw a potential opening of the market for products from hunts in which certain animal welfare standards were met (EU Commission, 2008: Recital 11), the adopted regulation, Regulation 1007/2009 on Trade in Seal Products (basic regulation), no longer provides for such derogation from the ban. Instead, all seal products that stem from commercial seal hunts are banned from the European markets, unless they are in the personal property of a traveller. Moreover, non-commercial dispersion of seal products is granted when the products stem from marine management initiatives while the trade in products from Inuit or other indigenous hunts is also not prohibited.
It is especially this so-called ‘Inuit exemption’ and its application in non-indigenous contexts which is the centrepiece of this note. Enshrined in art. 3 of Commission Regulation 737/2010 (implementing regulation), seal products are still allowed to be traded in when they 1) stem from hunts conducted by Inuit or other indigenous communities that have a tradition of seal hunting; 2) are at least partly used, processed and consumed in the communities; and 3) when the hunts contribute to the subsistence of the community. These three exemptions stem from the inchoate will of the European policy makers not to affect the socio-cultural integrity of Inuit communities, as expressed throughout the crafting process of the legislation and responding to the adverse effects of the 1983 Directive banning the trade in products stemming from seal pups (Council Directive 83/129/EEC or ‘Seal Pups Directive’) (see Wenzel, 1991).
On the other hand, socio-economic effects of a ban for commercial sealing communities or communities in which the sealing industry is located are by and large not considered (Sellheim 2013a: 422, 423). Argumentum a contrario, throughout the legislative process of the ban, adverse effects on commercial sealing communities are silently accepted.
Seal Utilization in Newfoundland
I have argued elsewhere that these three characteristics are equally applicable in non-indigenous communities and therefore pose empirical problems in the exemption’s applicability and feasibility beyond ethno-cultural considerations (Sellheim 2014: 8-10). In a similar manner as in the whaling context, the cultural importance of sealing and the commercial sealing industry is closely linked to ethnos although similar traits of utilization between indigenous and non-indigenous resource users exist (see Sowa, 2013). Although also discursively the utilization of seal skins for clothing is recognised, it is predominantly located in a context of ‘luxury’ as high-quality seal skin products such as boots, jackets or mittens are sold for very high prices on the domestic and global markets. In Newfoundland’s capital St. John’s at least two fur stores sell these products.
This, however, is a difficult claim to uphold as it inevitably raises the question on the limits and definition of luxury: while, for example, some claim high prices for e.g. seal skin jackets are an indication for luxury, others claim that the high prices are an indication for the life-long lasting quality of the product and should therefore be considered an investment.
Notwithstanding the debate surrounding luxury and the pricing of seal products, the following paragraphs present a snapshot of selected historical and current small-scale seal products utilization in Newfoundland which represents the identity-giving value of their production beyond the notion of luxury.
Historically, and with the advent of the commercial sealing industry in the late 18th century, it was primarily the skin and the fat of the seal which were used for making clothes for the domestic and European markets as well as for rendering fat into oil as a cheap alternative to whale oil (Ryan 1994: 70). Here lies the core of the tradition of the sealing industry in Newfoundland – the commercial exploitation of the seal – around which subsistence elements have developed. Thus, it is not the resource per se recognized in the tradition, but the captains, vessels and events that have shaped the history and societal construct of Newfoundland’s villages and cities – best reflected in the numerous songs and poems surrounding the hunt and hunters (Ryan & Small 1978) and in the erection of the Sealers’ Memorial ‘Home from the Sea’ in Elliston, Newfoundland, in 2014. But even within the large-scale seal hunts of the 19th century, sealers and their families benefitted from the hunt on a non-monetary basis when seal flippers and carcasses were brought home as an additional food source (Ryan 1994: 239, 240).
But apart from the larger scale utilization, also small-scale skills developed based on the seal hunt. One, only briefly documented skill, was wooden sheath-making for sealing knives when the men were on the ice skinning the animals and which were “almost works of art” (Wright, 1984: 43). This skill, while still prevalent in the 1980s, has largely disappeared from the hunt since seals are now skinned on the boat where the knives are no longer the personal property of the individual sealers. While sheath-making was a spin-off skill of the hunt, Newfoundland’s northern tip at the Street of Belle Isle was home to the emergence of a skill relating to seal skins. Since the region’s settlement in the early 1800s a long-standing tradition of making resilient seal skin boots had developed which is believed to have merged skills from Inuit and First Nations with European boot making (Bock 1991: 19).
Permanent settlement was significantly supported by the sale of seal skin boots when the funds generated through the trade were used to establish an Anglican Mission in Flower’s Cove in 1849 and ultimately to build the St. Barnabas Anglican Church in 1920, which is also referred to as the ‘Skin Boot Church’ (ibid.: 47-54).
The current utilization of seal products is manifold and begins with the landing of the seal hunting vessel in its home harbour. Prior to the hunt, villagers ask the hunters to save specific seal parts, such as whole carcases, ribs, hearts or flippers for them. Upon arrival of the vessel from the hunt, these parts are given to those having ordered them. This occurs without monetary exchange, but payment occurs through other goods and services (Field notes April 2013).
Apart from the meat of the seals, it is especially the furs which are of interest for small-scale users in Newfoundland. As shown above, the skill to make seal boots has been historically embedded in the settlement of the Northern Peninsula where now the skill has been revived (Bock 1991: 58-63) and seal skin products can also now be ordered through the internet. But apart from the small business approach of the Northern Peninsula, also on the Avalon Peninsula, in the south-east of the island of Newfoundland, seal product processing can be found – both large-scale processing in the last processing plant in South Dildo, Carino Processing Ltd., whose workers are significantly affected by anti-sealing sentiments (Sellheim, in press) and home-based handicraft.
In the seal processing plant where waste products such as damaged and therefore unsellable skins are generated, these products do not go to waste and are used for further processing by private individuals. Hand-made hats, mittens or bags are then either sold in convenient stores in the vicinity of the plant or by private citizens who point to their products with self-made road signs. Interview partners revealed that the skill to make these products has been in their families for generations and that the style of making mittens, for instance, is the same as three generations ago (Field notes November 2013).
Apart from the utilization of furs, seal meat is a common good to be found all over the island. While pickled or brined seal heart is a delicacy in seal hunting communities and constitutes a commodity arising out of generations-old tradition (Field notes April 2013), also other forms of seal meat for private consumption and commercial sale are commonly found in Newfoundland: Shortly after the sealing season when seal flippers are either directly given to the people waiting on shore or later on sold to the public in the central squares of the communities or in the centre of Newfoundland’s capital St. John’s. Seal meat, which is processed by small-scale meat processing facilities, is consumed in various forms, such as seal flipper pie, seal sausages or marinated. The interest in seal meat is also documented in Wright (1984: 82) while the traditional social and cultural significance of seal flipper preparation and consumption is highlighted by Ryan (1994: 387, 388).
Subsistence, Market or Relay Economy?
As Ryan (1994) shows in his treatise on the emergence of the sealing economy in Newfoundland, the traditionality of the sealing economy is by and large built on commercial interests and driven by commercial factors. Yet, to dismiss the seal hunt as purely commercial, leaves out the subsistence elements described above making it rather difficult to distinguish clearly between immediate-return (subsistence) and delayed-return (market) economies (see Ingold 2011: 66; Barnard 2002: 7).
In general, the sealers on board Steff & Tahn - the boat which this author joined to conduct field research – considered their hunt a subsistence seal hunt as it directly generates food as well as monetary income later on. This was particularly true in 2009 when the prices of seal products were extremely low (Sellheim 2014: 11, 12), making a larger hunt unfeasible. In that year therefore a few speedboats from the community of Woodstock engaged in the ‘landsmen hunt’ - day-trips to the ice to hunt seals - generating direct supplies for the community while the pelts were sold to the market, thus turning the incentive to hunt seals to become subsistence, rather than market-based (Field notes April 2013). It needs mentioning that Greenlandic hunts are to a large extent essentially commercial, because a government-owned tannery processes and sells the same products as in Canada to the world’s markets (Government of Greenland 2012). But since Greenlanders are originally of Inuit descent, heritage protection is a common part of the discourse on seal hunting and they therefore fall under the so-called ‘Inuit exemption’ in the EU ban.
As in the whaling debate and in the International Whaling Commission (IWC) where subsistence is equivalent to aboriginal, small-scale non-aboriginal hunts for community consumption is generally not considered a subsistence hunt irrespective of the same characteristics, i.e. sharing and community processing, of these products (see for instance Freeman 2001). Leaving the ethno-cultural considerations aside, an interesting picture emerges as the economic circumstances on the market for seal products drive the degree of subsistence activities in Woodstock: with a declining market for commercial seal products, the landsman hunts gain importance and the consumption of seal products stemming from hunts conducted primarily for community consumption increases with fewer products being sold commercially. It is therefore difficult to draw a clear-cut line between commercial and subsistence drivers of the seal hunt in Woodstock as the incentives to engage in the hunt are mixed. Yet, while the industry itself is framed predominantly by commercial characteristics, changes in the markets shape the degree to which subsistence-based seal hunts are conducted. This type of economy can be termed “relay economy”, describing the increase of subsistence usage of a given resource by the same users that engage in its commercial utilization. It is thus that the driver of resource usage shifts with varying market conditions. Although sealers in Woodstock are part of the commercial sealing industry, one Woodstocker stated that “as long as we in Woodstock know how to hunt [seals] and fish, we won’t have any problems” (April 2013 Field notes), thus indicating a subsistence use in case of collapsing markets.
Through a decline in the sealing industry as well as a declining fish industry in Newfoundland in combination with other factors, outmigration is a common concern for small coastal communities (Sellheim 2013b: 3, 4). The primary constant in the times of change is the notion of the ‘sea as the provider’ for communities like Woodstock. All life is based around the sea and community cohesion is shaped by the sea to provide while markets drive the feasibility of economic opportunity. The seal hunt as well as fisheries are the only economic opportunities in Woodstock and social ties are directly linked to the possibility to engage in these activities. Thus, increasing pressure on the exertion of the seal hunt contributes to a significant weakening of the socio-cultural fabric in seal hunting communities, thus in turn accelerating community dissolution. At the same time, also knowledge about the sea, its resources and its characteristics is no longer transmitted to the next generation putting local knowledge with regard to subsistence activities in jeopardy.
Discussion and Conclusion
Although the seal hunt is not the only element holding the community together, it is primarily the loss of knowledge and identity that indicates the important role of seal hunting in coastal communities in Newfoundland. The stereotypical depiction of the commercial seal hunt as merely an economic activity, the recognition of the cultural role of seals and sealing in Inuit societies, and the non-consideration of any socio-cultural aspects of the hunt in the discourse surrounding the sealing industry in Newfoundland points towards a bias in the debate. This bias appears to be based on ethnic rather than activity-based considerations, best exemplified by the fact that the socio-cultural role of the sealing industry has played a significant part in shaping Newfoundland’s identity, while it is discursively recognized as being of relevance for Inuit communities only. The ‘Inuit exemption’ in the EU seal products trade ban stands exemplary for this.
A question that must therefore be asked is: do only indigenous peoples have the right to culture, resources and traditions and can it be acceptable to neglect those of non-indigenous people? Indeed, this question must be answered negatively. As these lines have shown, also the commercial seal hunt should be located in a discourse on tradition, culture and knowledge and it seems unfitting for secular societies to grant discursive rights to one group of people while denying others the same rights.
Barnard, A. (2002). “The Foraging Mode of Thought.” In A. Barnard and K. Omura (Eds.). Self- and Other-Images of Hunter Gatherers. Henry Stewart (pp. 5-24). Osaka: National Museum of Ethnology.
Bock, A. (1991). Out of Necessity. The Story of Sealskin Boots in the Strait of Belle Isle. Shoal Coast East: Great Northern Peninsula Craft Producers.
de Ville, F. (2012). “Explaining the Genesis of a Trade Dispute: the European Union’s Seal Trade Band”. In: Journal of European Integration. 34(1): 37-53.
EU Commission. (2008). Proposal for a Regulation of the European Parliament and of the Council Concerning Trade in Seal Products, COM/2007/0469 final. Retrieved from
Freeman, M, M.R. (2001). Is Money the Root of the Problem? In R. L. Friedheim (ed.). Toward a Sustainable Whaling Regime (pp.123-146). Seattle and London: University of Washington Press.Government of Greenland. (2012). Management and Utilization of Seals in Greenland. Nuuk: Ministry of Fisheries, Hunting and Agriculture. Retrieved from http://dk.vintage.nanoq.gl/Diverse/404.aspx?ErrorPath=http%3A%2F%2Fdk.vintage.nanoq.gl%2FErrorPages%2F404.aspx%3Fsmarturlredirect%3Dtrue. Ingold, T. (2011). The Perception of the Environment – Essays on Livelihood, Dwelling and Skill. London
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Ryan, S. (1994). The Ice Hunters. A History of Newfoundland Sealing to 1914. St. John’s: Breakwater Books Ltd. Ryan, S. & L. Small. (1978). Haulin’ Rope & Gaff. Songs and Poetry in the History of the Newfoundland Seal Fishery. St. John’s: Breakwater Books Ltd. Sellheim, N. (2013a). The Neglected Tradition? – The Genesis of the EU Seal Products Trade Ban and Commercial Sealing”. The Yearbook of Polar Law. 5: 417-450.
Sellheim, N. (2013b). Living with ‘Barbarians’ – Within the Commercial Sealing Industry. In: Northern Research Forum Open Assembly 2013 Proceedings, Akureyri: Northern Research Forum. Retrieved from http://www.rha.is/static/file/NR/OpenAssemblie/AKUREYRI2013/nikolas_sellheim.pdf.
Sellheim, N. (2014). The Goals of the EU Seal Products Trade Regulation – From Effectiveness to Consequence. Polar Record. FirstView Articles.Sellheim, N. (Forthcoming 2014). Direct and individual concern’ for Newfoundland’s Sealing Industry? – When a Legal Concept and Empirical Data Collide. The Yearbook of Polar Law. 6.
Sowa, F. (2013). The Konstruktion von Indigenität am Beispiel des Internationalen Walfanges. Grönländische und japanische Walfänger im Streben nach Anerkennung. Anthropos. 108(2): 445-462.
Wenzel, G. (1991). Animal Rights, Human Rights. Ecology, Economy and Ideology in the Canadian Arctic. Toronto: University of Toronto Press. Wegge, N. (2013). Politics between Science, Law and Sentiments: Explaining the European Union’s Ban on Trade in Seal Products. Environmental Politics. 22(2): 255-273.Wright, G. (1984). Sons & Seals. A Voyage to the Ice. St. John’s: Memorial University of Newfoundland.
Economic Development, Indigenous Governance, & Arctic SovereigntyBack to top
Karen Everett & Heather Nicol
There have been differing visions for the future of Canada’s north and the role of resource development in Canada’s nation-building project. While for some, resource extraction is the ‘magic bullet’, for others there is also the fear that rather than being the solution to economic development problems, resource extraction activities may prove detrimental to the economic health of many northern communities. Beginning with the 1970s, indigenous leaders have urged the federal government to increase cooperation with local populations, especially in terms of facilitating equitable benefits of economic development, social services, education, and health, environmental protection. But there is a continuing resistance of government agencies to facilitate northern indigenous populations’ control over their resources and a general failure of those who envision the future for Canadianists more generally to engage with economic development strategies. This paper assesses recent attempts towards co-management of resource development in the context of new rounds of development pressures on the Canadian North, situating part of the problem in the degree to which a scholarship in general has failed to move beyond the convenient but rather simplistic understanding of the North as ‘frontier/homeland’.
In 2010, the Standing Committee on Arctic Defence released its statement on Canada’s Arctic Sovereignty. The Committee stated that “[e]xercising Arctic sovereignty is a pillar of the Northern Strategy and the number one priority set out in Statement on Canada’s Arctic foreign policy. Canada’s Arctic sovereignty is long-standing, well-established and based on historic title. Launched on August 20th 2010, the foreign policy statement is the international dimension of the Northern Strategy, and it provides the international platform from which to project our national interests in the world.” So the Northern Strategy is also key to understanding that there is an important relationship between development and foreign policy. It builds upon what then Defence Minister Gordon O’Connor stated in 2006, that:
The basic problem in these [Arctic maritime boundary] disputes is a matter of resources - who owns which resources. For instance, let’s take the Beaufort Sea. We may declare that a boundary goes to the Beaufort Sea in one position and the Americans in another. If a country wanted to drill for oil in the Beaufort Sea, and there's a lot of oil and gas there, they, at the moment, if they’re in this disputed area, wouldn't know who to approach, whether it’s the United States in Canada to get drilling rights. So these sort of things have to get resolved (Vongdouangchanh, 2006).
The ‘sorts of things’ O’Conner referenced represented international challenges to Canada’s historical understandings of state territory in the Arctic, particularly in the Arctic Ocean. Speaking from an international studies perspective, Palosaari (2011: 18) placed this in broader perspective, arguing that “when the state sovereignty perspective is more specifically focused on the Arctic, the impact of ice retreat on issues that concern the national interest gets highlighted.”
What Palosaari referred to was what was then looming as a competitive basis for international relations in the Arctic Ocean. While much writing ensued on the North, it came largely from an International Relations scholarship where regimes, cooperation and conflict, international law and political order (see Wegge 2011; Young 2012) were the dominant issues. While some of these issues were also covered in Canadian Studies literature, what we might consider to be a Canadian Studies approach to the Canadian North still retained a distinctive interest in specific national issues and approaches, such as questions about the relationships embodied in understandings of identity, counterpoising development and environment, indigenous knowledge, and focused upon establishing sovereignty in the North. It remains somewhat distinctive from this larger approach to the North which examines relationships between state agency, environment, and geopolitics.
Grounded in a distinctive school or thought, historically, the Canadian Studies literature suggests that the North suffers from the tension of being both a frontier for resource development that defines national interests and a homeland for indigenous communities, based upon narratives of environment and development first articulated in the 1970s (see Nicol 2013; Berger 1977). It is a literature concerned with history, national history and exploration, colonization, and redemption. It was not just a region, it had a meaning. Indeed, the Arctic was even understood to be a masculine space in terms of the Victorian era, where hardy men tested their prowess against nature’s worst (see Dittmer et al. 2011)
Beginning from the perspective of a foundational Canadian Studies approach to the North, this report examines the way in which the changing landscape of economic development has been explored in the region. The problem becomes one of tracing how the literature has dealt with issues of development from the perspective of indigenous involvement in expanding economic investment and opportunity. For the most past, the Canadian Studies literature has been more absorbed with identifying and critiquing enduring colonial structures in the North, with little attention paid to how and where such structures have changed. While Berger’s frontier/homeland metaphor remains the bedrock of such a literature, Berger’s 2003 analysis of the existing development landscape is less studied (Campbell, Fenge & Hanson 2011). It is this dilemma, we conclude, that challenges us to undertake a more critical read of recent events, including where does the current interest in ‘Arctic sovereignty’ leave us with respect to resource development and local governance? Where is the Canadian Studies literature positioning this issue as economic development in the Arctic unfolds?
Canadian Studies Perspectives on the North
Northern imagery is fluid, embodies Canadian identity, and represents the changes in the larger political and social contexts of both Canada and the world. While perspectives on the North have changed quite considerably over time and remain different for different groups of people, however, there are also some foundational beliefs. Canadian literature and historical analysis reflects this variety. Early literary works, for example, were largely responsible for creating and perpetuating the imagery of an empty space through representations of a landscape that could only be conquered by overcoming adversity and by conquering the harsh environment (Berger 1966; Grant 2010; Page 1986). The effects of this imagery were twofold: first, a clear distinction was made between those who lived in the North as uncivilized in comparison to European settlers. This perspective was reinforced by a scholarship which reinforced the concept of the ‘other’ through the lenses of modernity. Second, treks to the North eventually turned from being an adventure to a mission to protect sovereignty claims as explorers from other nations made their way into the North in the 20th century in particular (Grant 2010; Page 1986). Such perspectives fit well with the fact that well into the late twentieth century, the Canadian North was still greatly affected by structures and relationships which had their origins in an earlier era of colonialism; colonialism being defined as the “dominance over a separate group of people, who are viewed as subordinate, and their territories, which are presumed to be available for exploitation” (Said 1993: 8). While the era of colonial occupation, (at least for those Canadians of European decent), was effectively over by the mid-19th century, and more generally dismantled throughout the globe in the post-World War II era, by the late 20th century, many historical Canadian scholars, like Coates (1985) still viewed the political situation within Canada’s northern territories as one of effective ‘internal’ colonialism, in the sense that the state had become the colonial master of its indigenous populations. The perspectives of indigenous scholars (like Alfred and Corntassel 2005 or Nadasdy 2012) were not heard at all.
The colonial relationship lasted somewhat later in Canada’s North than it did elsewhere in Canada, (see Eber 1989; Grant 2010; Page 1986) for various reasons. Indeed, northern indigenous peoples still continued to be largely excluded from both land claim and decision-making processes well into the late 20th century (see Campbell, Fenge & Hanson 2011). The outcomes generated a crisis of underdevelopment and human security, which exists, both in the territorial and provincial Norths. Current efforts to settle remaining land claims and to create co-management structures respond to this historical legacy, because “the rights of First Nations to traditional territories and the natural resources therein are ill-defined by both the Canadian governments and the judiciary. The special rights of aboriginal people as guaranteed by treaty are not generally considered when resource development projects are proposed or resource management plans are prepared. Consequently, resources located on aboriginal traditional territory often become the focus for conflict between government, natural resource industries, and First Nation peoples.” (Campbell 1996). Indeed, Bone (2008: 83) reminds us that by the late 20th century, the establishment of a resource economy in the North resulted in conflict over land but that even more than this, it was a conflict “between goals, preferences and values.”
Evolution of Land Claims
It is now relatively normative to consider that the appropriation of indigenous land was a colonial tool used by the Canadian government through the land treaty process. Basically, agreements were formed to outline rights to land, that while on the surface were supposed to provide equal benefit to the indigenous populations and federal government, they significantly privileged the government and marginalized the indigenous groups (Usher 2003). Treaties 8 and 11, for example, concerned land in Northern Canada, although Treaty 11 covers much more land in the region that belonged to the Dene. In both cases, the Dene did not believe that signing the treaty meant that they were giving up their rights to the land; rather, they saw it as a way of building a relationship with the state (Berger 1977).
In terms of resource development, the government used Treaty 11 as a way to gain access to natural resources for development. However, many of the Dene did not fully understand the value of the resources they on the land covered by the treaties (Fumoleau 2004). The Dene worked to rectify this wrong, and in 1973 both of these treaties were voided based on the differing interpretations of the treaty and because reserve lands were never created as outlined in the treaty (Irlbacher-Fox 2009). In 1994 the Sahtu Dene and Metis reached a new agreement in the Mackenzie Valley area of the NWT.
Elsewhere in the Canadian Arctic, there were no historical treaties, and it was not until the early 20th century that the idea of comprehensive land claims developed. The territorial North was neglected in times of peace, and sovereignty asserted by few and scattered RCMP and RCMP posts (Grant 2010). Several subsequent landmark land claims, however, brought the Inuit into the land claims process: beginning with the James Bay and Northern Quebec Agreement of the 1970s, and the Inuvialuit comprehensive land claim, also negotiated in the 1970s. Furthermore, “In the James Bay and Northern Quebec Agreement in 1974, Cree and Inuit exchanged aboriginal rights to land and resources for cash, title to hunting areas, and exclusive hunting and fishing rights in some areas. The James Bay agreement created significant new political institutions and paved the way for expanding co-management elsewhere in Canada and beyond” (Caulfield 2004: 123). Although in other ways the James Bay and Northern Quebec Agreement is not seen as an unqualified success story for the Cree, Innu or Inuit – and although since that time, there have been further arrangements in the region, such as the establishment of the Nunavik regional government – the James Bay Agreement was one of the first steps towards current self-government arrangements in Canada. Followed by the Inuvialuit Settlement Agreement, Nunavut, Nunivak, the Tlicho land settlement, and a number of other new self-governance and territorial arrangements, the era of greater indigenous control and self-governance accompanied the latest rounds of resource extraction in the north. Indeed, in many ways resource development and self-governance were related to each other. In 1984, the Inuvialuit of the Mackenzie Delta, for example “signed an agreement with the federal government that exchanged aboriginal claims for a cash settlement, title to some 91,000 square kilometres of land, and mineral rights. These developments led to the division of the Northwest Territories and the creation of the new Nunavut Territory in 1999. The Nunavut Agreement, which laid the groundwork for the new territory, was signed in 1993. The latter also provided a settlement of claims and gave Inuit a role in decision making” (ibid.: 123). Thus both Inuit and non-Inuit were involved in the process, which includes much of the Canadian Arctic, and is also well developed in the Northwest Territories. This process to resolve land claims in the 1970s was accompanied by a push for development (Stuhl 2011; Nicol 2013). Nevertheless, the reservations of environmentalists which surfaced in the 1970s, in relation to development within the North, was reinforced by those who felt that development within the Canadian North should not proceed until land claims had been settled (Berger 1977; Christensen & Grant 2007; Watkins 1977).
This was precisely the conclusion of the Berger Inquiry. In wake of the controversial proposed development of the Mackenzie Valley, for example, the Berger Commission visited 35 communities from 1974-1977 to hear the concerns of local residents. This was the first time that the aboriginal voice was really heard with regards to proposed development. The major conclusion of the report is that it challenged the prior images of the North as an empty space when Berger (1977) proclaimed that there were duelling realities in the North – “for one group it is a frontier, for the other a homeland” (xvii). Berger’s comprehensive report covered a multitude of issues, including the environment, culture, the northern economy, and social impacts. The message the report sent was that any new development efforts cannot ignore local indigenous populations because the North is their home, development will not benefit everyone equally, and local indigenous groups will be left to deal with the consequences (Berger 1977).
Since then, the dual perception of the Canadian North as both a resource frontier and homeland for indigenous and non-indigenous communities has been recognized by a number of scholars and practitioners. As such, a distinct Canadian Studies tradition on the North and northern development that began with Thomas Berger’s report on the Mackenzie Valley Pipeline (Berger 1977) has continued with a tradition of writing on development including the work of Coates (1985), Feit (1988) or by geographers like Bone’s The Geography of the Canadian North (2012) or even Petrov’s work in Trembly and Chicoine’s (2013) The Geographies of Canada (2013). Such reports and approaches identify the special nature of Canada’s Arctic and sub-Arctic regions, the issues and challenges to its human populations, and the potential threat of large resource-oriented extraction projects like the proposed Mackenzie Valley pipeline in the 1970s, or the Windy Craggy Mine Proposal discussed by Bone in 1992. They recognize the vulnerabilities of the resource economy and advocate greater indigenous involvement in decision-making.
These assessments rightly identified the potential for large-scale environmental destruction and unalterable change to indigenous lifestyles in the north, counterpoising the politics of environment, in this region against the politics of resource extraction industries. Indeed, the political in the Canadian Arctic context was, until the 1990s, generally exclusive of community participation within the development and mitigation processes. In other words, the homeland/frontier dichotomy resonated in a scholarship which was focused on politics and environmental debate. It situated resource development initiatives in terms of known regional economic effects, most of which had been negative for Northerners and Northern environments. DiFracesco (2000) echoed the comments of the Royal Commission of 1995, in its assessment that “large non-renewable resource-based projects and heavy infrastructure development” had failed “to create a dynamic regional wage economy” in the North (ibid.: 122). DiFrancesco suggested that the “panoply of economic development initiatives which had been implemented” in places such as Canada’s Northwest Territories would not have the intended developmental results (ibid.: 122), primarily because of the existing political context in which regional development models had been conceived and implemented.
Over a decade later, large-scale resource extraction is still on the agenda in Canada’s northernmost regions, but the development context has changed. The development landscape has been supplemented by several major land claims agreements, like Nunavut and Nunatsiavut, as well as the establishment of Canada’s Northern Economic Strategy, its Northern Economic Development Agency and its roster of initiatives designed to encourage just such investment and development. Still, the problems are similar with respect to the potential economic and environmental legacy of extractive activities in the North, including the issue of oil and gas development in the Mackenzie Valley. Richard Caulfield (2004) has observed that since the 1970s the context of development has clearly changed, as have the management practices and overall assessment processes. The land claims have, by and large, been negotiated. Recent land claims settlements in North America, and specifically in the Canadian North, have now placed millions of square kilometres in the North, “in the hands of for-profit and non-profit entities controlled by indigenous peoples.” These corporations, Caulfield notes, “control vast resources, and they interact actively with both public and private resource governance institutions” (Caulfield 2004: 122).
It is here, again, that a Canadian Studies approach to the North distinguishes itself. While IR literature is generally concerned with the relationship between states and corporate stakeholders in the Arctic (see Wegge 2011; Dodds 2010; Borgerson 2008), the Canadian literature is more strongly focused upon the constituent parts which contribute to the Canadian state’s position in the North (see White 2008; Heininen & Nicol, 2007; Stuhl 2013; Grant 2010; Coates et al. 2008). The understanding of the relationship between state or national agency and governance issues, including regional land claims and indigenous self-government (Loukacheva 2007; Fenge 2008), as well as a running critique of the problematic consequences of state-centred definitions of sovereignty (Grant 1991; Nicol 2010; Nicol 2013) are well developed. A similar, but less developed literature distinguishes itself in debates surrounding the current landscape of economic development within the contemporary Canadian North, certainly in parts of the Western if not the entire Arctic and sub-Arctic region. While, as Caulfield (2004) notes, development of non-renewable resources such as oil and gas, gold, lead, zinc, and diamonds have had a profound impact on the livelihoods of Arctic peoples”, it is not just the fact of development that is important: rather it is the context within which exploration and resource development occurs which is crucial. Furthermore, “[e]arly development was often associated with colonization and exploitation, where Arctic residents, who lacked recognized rights to resources, benefited little but paid substantial costs in terms of environmental impacts and loss of power. With growing attention given to indigenous land claims, resource rights, and self-determination, some Arctic peoples are now finding ways to engage productively in non-renewable resource extraction” (Caulfield 2004: 122). The unqualified belief that ‘development is bad for the North’ has little credibility, even among indigenous groups. For those outside the Canadian Arctic, attempting to make sense of the politics of development, it is important to understand that indigenous land claims – and specifically those which lead to self-governance, accompanied by more explicit control of rights to land ownership or use – are central to the new landscape of mega-project development within the Canadian North. While the long term sustainability of a wage economy linked to resource extraction for local communities is often uncertain (i.e. boom and bust cycles), the question of how revenues are shared, how investment is designated, and how control over resource extraction is regulated rests upon the success of indigenous self-governance and the consultative process it has encouraged. It is the management of the latter which, to a larger degree, influences the success of the former. As such, a new and distinctive concern with co-management of resources has complemented the rise of an indigenous studies component in Canadian Studies which is distinctively focused upon development and the North (see Campbell 1996; White 2008; Natcher and Davis 2003; Natcher 2013), of which there are approximately 34 in all of Nunavut, the NWT and the Yukon (Natcher 2013). But, as Campbell, Fenge & Hanson (2011) remind us, there seems to be a false consensus that if the problem of frontier/homeland has been assessed politically, the problem of economic development impacts and benefits is under control. Nunavut’s creation did not end the problem of self-governance in the North, nor the sharing of development benefits. Instead, there is a new complexity and intertwining of issues which is as yet, poorly addressed. This relates not just to the idea that development is inherently ‘good’ or ‘bad’ for indigenous communities and environments, depending upon whether land claims are in place, but rather how developmental frameworks continue to be manipulated in ways which lessen their potential ability to resolve the crisis of underdevelopment within First Nation communities in the Canadian North.
To better appreciate this claim, which is that the Canadian Studies literature has remained rather simplistic in its analysis of Northern development issues and focused upon seminal research in need of reassessment in contemporary terms, we need to think about three important issues. The first is whether there is any evidence to support the idea that a lens on economic development has not developed in the Canadian Studies literature. This is the case – only about two per cent of articles in the three flagship journals which reflect the state of Canadian studies both at home and abroad discuss the Canadian North, and of these, only two articles explicitly examine economic development issues. These are the Journal of Canadian Studies, The American Review of Canadian Studies, and the Intentional Journal of Canadian Studies. Approximately 600 articles have appeared over the past ten years which reference the Arctic, and while next to none deal specifically with economic development, there is limited concern, more generally, for environment and governance issues. In general, while there are several other important journals which are directed specifically to the study of the Canadian and International North which do contain more explicit discussion of economic development issues, as well as single discipline publications which discuss development issues, in general Canadian Studies literature as a interdisciplinary field have avoided the topic.
The second issue to think about is how development is now being promoted in context of existing arrangements for self-determination within the North. Much of the literature on development is actually embedded in articles which define identity, political developments. This is true even within the Canadian studies journals explored, where land claims and sovereignty arrangements were the venue for explaining economic development issues. But even so, and this speaks to the last point, even where political discussions address development issues, there is little discussion of the economic context in type of decisions which are being made, specifically the way in which federal agencies are creating a development agenda which has at its heart, a neo-liberal development agenda, and which, as such, has very important ramifications for community development itself.
Models for Development: Two Different Visions
Reservations about economic, social or environmental consequences of specific projects in the North should not be confused with lack of support for development in general. Indigenous governments are very mindful of the role of resource industries in providing new economic opportunities in the western Canadian Arctic, particularly in the area of employment. Bone (2008) reminds us that while such development may indeed not be sustainable, and comes with a high price tag, there is a new understanding of the way in which resource development promotes economic development precisely because the nature of the global economy and commodity demands and prices have changed so much in recent years. Still, for Bone, there are predictable and intractable problems with reliance upon extractive industries for general economic diversification in the North, and this is a belief shared by many. While some agencies, for example, the Conference Board of Canada, or even diamond mining enterprises like Diavak, or Enkati, paint a promising picture of Northern development, this is not always the reality. When the Polaris and Nanisivik mines in Nunavut closed, they devastated the local communities as people lost their jobs, and there was a spike in substance use (Bowes-Lyon et al. 2010). Furthermore, it was found that any jobs skills developed in the mines were industry specific and not transferable, which calls into question the benefits of skills training the Conference Board (2011) promotes.
A 2010 study by Petrov also looked at the consequences of mine closures, specifically focusing on the Faro and Beaver Creek mines in the Yukon. Petrov (2010) stressed the resource industry in the North is not stable and goes through waves of decline, which are devastating for the local economy. Petrov found that not only did the resource industry suffer, but so did sectors that were both related to mining and sectors that were not, such as entertainment and tourism. These declines resulted in a declining GDP for the territory at a rate of 11.2% per year from 1997 to 2002.
On the other hand, indigenous communities are eager to make decisions regarding the admissibility of such projects, and in doing so play a larger decision-making role. The landscape of megaprojects, defined by Bone (2012: 171), indicates that virtually all are created by outside interest and investment. There are, of course groups such as the Aboriginal Pipeline Group, which have formally established themselves as part of the potential landscape of economic investors should the Mackenzie Valley pipeline move forward. In other areas, through the management and investment of settlement funds, northern groups have made considerable progress and investment in the North. The magnitude of growth in this area is suggested by I and D Management statistics. I and D was formed in 2002 in partnership with Diavak mines (Rio Tinto). It represents 4 indigenous groups, including the Tlicho Investment Corporation, and has today 72% of mine employment comprised of aboriginal employees – 43% for “impact communities” (I and D, pers. Com. 2009). Since 2002, I and D has more than doubled its workforce in Diavak, employing indigenous and northerners at all levels of production, while in 2008 unemployment stood at 5.4% – a remarkable feat when compared to 17.4% in 2001 (Up Here Business 2008: 28) or 13.7% in 1999. Similarly, transfer payments account for 70% of the territories total expected revenue, again down from closer to 80%, or more, in previous decades. Indeed, the diamond mines are estimated by some locals to provide for as many as 2000 jobs region-wide, and have significantly changed the perception of locals towards their ability to become regionally self-sufficient, decreasing welfare dependency and creating the potential for a more materially affluent standard of living. There is, however, a very real problem in that every group, from indigenous governments to industry, recognizes, which is that the nature of the diamond industry is not sustainable. Jobs created by diamond mines, and the boom in construction, infrastructure development and ancillary economic activities to expand a growing and more affluent population is limited. Estimates of 20 to 40 years are given, depending upon the ability of the major corporate players like De Beers, Rio Tinto or BHP Billiton to maintain diamond mining activities in the face of a volatile global market and in the face of what may be increasingly expensive underground mining activities rather than open pit or surface pipe mining operations.
So the issue of sustainability remains a difficult one, but as far as sharing the wealth, a new landscape is emerging. Several types of agreements in place which attempt to change the exploitative nature of mining itself. These are the social and economic agreements negotiated with governments, and the IBAs (Impact Benefit Agreements) negotiated with individual communities, where, unlike the co-management boards, indigenous groups are ready and able to enter into negotiations directly with corporate investors, to gather some of the benefits of development on impact (and often even on non-impact) lands.
This is an area in which Canadian Studies scholars are only beginning to invest time and effort. Similarly, the relationship between co-management boards and decision-making is also emerging as a research area. Co-management boards appeared to pave the way for future development for indigenous populations, although few scholars were sufficiently versed in the complexity of these agreements to provide insightful analysis (see Graben 2011; White 2008; Natcher & Davis 2003). Co-management is, potentially, a process of shared stewardship or responsibility between indigenous and non-indigenous actors, the latter including regional and territorial government personnel. Co-Management boards are designed to deal with the licencing of “most undertakings related to the use of land, water, and wildlife in their respective regions or to make recommendations related to environmental impacts” (Graben 2011). Campbell (1996) shows that co-management first developed as a concept in the early 1980s, but that although institutionalized ‘co-management agreements’ had been developed in context of settlements involving aboriginal people in Québec and in the northern territories, “the experience of co-management in Québec was extremely limited and highly criticized”. By 1984, however, with the signing of the Inuvialuit Final Agreement, co-management had evolved. For Campbell it was the IFA model which served to define subsequent understandings:
The terms of the IFA included a lump-sum compensation payment, the equivalent of full title to lands in and around the six Western Arctic communities of Inuvik, Aklavik, Tuktoyaktuk, Paulatuk, Sachs Harbour and Holman (Category I lands: 11 000 sq. km), and shared or joint management of resources on additional territory (Category II lands: 78 000 sq. km) (Dickerson, 1992: 103). Boards and committees established under the IFA to administer Category I and II lands and resources are unique in Canada. They include the Fisheries Joint Management Committee, the Wildlife Management Advisory Council (NWT), the Wildlife Management Council (North Slope), the Environmental Impact Screening Committee, and the Environmental Impact Review Board. Joint management on these boards and committees is accomplished through a 50% Inuvialuit representation. Consensus-based, they employ non adversarial methods of negotiation, and enjoy a reputation of being successful from both state and industry perspectives. In addition, each community developed its own conservation and management plans that are consistent with the regional plan developed in 1988 (Campbell, 1996).
The IFA model has been reproduced elsewhere in the North. The result is an increasing number of boards, both regulatory and advisory, which have authority over economic development and its environmental impacts. Co-management boards are now found throughout all land claims areas, including Nunavut and Nunatsiavut, with differing degrees of indigenous voice and influence. The structure and function of co-management boards is quite variable, nonetheless. Some, like the Nunavut Wildlife Management Board, are created by land claim agreements themselves, and some by federal legislation, such as the Mackenzie Valley Land and Water Board, or the Gwich’n Land Use Planning Board (White 2008). For some stakeholders, such as those invested in corporate development agendas, this creates an “over-regulated” development environment (McCrank 2008), while to others this represents a move towards more equitable and sensitive response to the need for greater civil participation within the NWT, particularly with respect to environmental and development issues (White 2008) – despite gender inequalities in representation (Natcher 2013).
While co-management has increasingly been the model whereby both indigenous and non-indigenous review panels and boards evaluate environmental oversight, most co-management boards’ concerns are limited largely to environment, wildlife and land and environmental issues, rather than education, health, or social welfare, with the Mackenzie Valley Environmental Impact Review Board being exceptional in that it has broader powers (White 2008: 72). In total, approximately 34 co-management boards exist across the Canadian territorial North. For example, in the NWT there are several such regulatory regimes established as a result of both the IFA and the subsequent Gwich’in, Sahtu and Tlicho final agreements. The latter set of agreements saw co-management boards relating to each claim entrenched in the Mackenzie Valley Resource Management Act. Arguably one of the most important co-management regimes, created as a result of “The Mackenzie Valley Resources Management Act (MVRMA)”, it has allowed “authorities to co-management boards to carry out land use planning, regulate the use of land and water and, if required conduct environmental assessments and reviews of large or complex projects. It also provides for the creation of a Cumulative Impact Monitoring Program (the NT CIMP) and an environmental audit to be conducted once every five years”, thereby allowing for a more robust management system (see MVRMA).
The resulting landscape of regulation and control thus established were complex and often scattered, responding to local community issues under the umbrella of broader regional initiatives (see White 2008; Campbell, Fenge & Hanson 2011). Indeed, there were four land and water boards entrenched within the MVRMA, and these included the Gwich’in Land and Water Board, the Sahtu Land and Water Board, the Wek’eezhii Land and Water Board; and the Mackenzie Valley Land and Water Board.
These land and water boards were designed to undertake monitoring and permitting programs as specified in the planning and co-management negotiated with the Government of the Northwest Territory and indigenous peoples. As White (2008) has indicated, their role was designed to ‘regulate the use of land and water, and the deposit of waste, through the issuance and management of Land Use Permits and Water Licences’. For example, for the Gwich'in Tribal Council, this meant that it has the right “to sit on any board that is set up to carry out environmental monitoring and testing within the Gwich’in Settlement Area. If a government department is given the responsibility for this, they must work with the Gwich'in Tribal Council.” (http://gwichintribalcouncil.com/cmb/).
White maintains that despite their flaws, the co-management boards have seemed to provide traction for greater indigenous voice in decision-making. He observes, however, that their faults are many: “Individual boards exhibit serious flaws (and some have been painfully dysfunctional), while systematic problems and shortcomings are evident across the entire range of land-claim boards. Among other things, they have been criticized for providing little more than token aboriginal influence over land and wildlife decisions, for remaining (via funding arrangements and appointment provisions) essentially under the control of the federal government (or, less frequently, the territorial governments) and, perhaps most damningly, for undercutting rather than enhancing aboriginal peoples’ self-determination and autonomy by enmeshing them in Western modes of thought andbehaviour ” (White, 2008, 72).
Indeed, the failure of co-management boards to live up to their potential has also been identified by a number of authors, as has been the minority structure of many of these boards where indigenous representation has been achieved (White, 2008; see also Natcher and Davis, 2003; 2011). In many cases, indigenous knowledge has not been incorporated into decision-making Graben, 2011; Natcher and Davis, 2003).
The point here is that there is no longer a simple dichotomy of ‘development is bad’ or ‘development is good’. This analysis allows us to explore more closely the political economy landscape in which economic development initiatives in the North are situated. At this point it is important to note that the literature resulting from a Canadian Studies approach to economic development in the North closely situated the goals of development as dependent upon the efficacy of local governance, land claims and co-management structures and relationships. Scholarly and indigenous assessments as to the positive (White, 2008) or negative (Alfred and Corntassel, 2005) outcomes of the process were varied, but there was essential agreement on the fact that land claims, co-management boards, and the political agenda of indigenous self-governance in the North was essentially the best way to proceed.
Moreover, the point is that the Canadian Studies literature, in general, has been reluctant to dig deeper, and it is only by digging deeper that a real assessment of the way in which development could and should proceed can be made. Instead, it remains focused upon colonial structures and identity/sovereignty narratives.
Since the mid to late 2010’s, however, there has been a fundamental shift in the landscape of regulatory control and the visioning of economic development policies. Since the time that the land and water boards were established, and co-management became normative, however, two significant events have happened. First, a political agenda of neoliberalism was advanced specifically for northern territorial development, and secondly, territorial devolution was put forward. In both instances the relationship between development and political agency were oriented towards serving broad corporate interests to enhance opportunities for large-scale regional investment. The Conference Board of Canada (2011), for example, argues that resource development in the North will provide employment and bring revenue into the territories. Indeed, the Conference Board (2011) states that many northern communities want to participate in development projects, not just as employees, but as participants throughout the whole process. It is this type of logic which has also seen a broader strategy of development in the form of the Federal Government’s Northern Strategy, its organization of Canada’s Northern Economic Development Agency (CAN NOR), and its business agenda as a platform for the Canadian Arctic Council Chairmanship in 2013. Both of these events were influenced by a Conservative Federal Government’s approach to the North as laid out in its ‘Northern Strategy’ (see Northern Strategy). The same strategy left the provincial powers more vulnerable and dependent. All un-owned land and resource royalties in the territories has been under federal not territorial control, meaning that the territories did not have access to them the same way provinces would. The devolution of powers of control over natural resources creates considerable opportunity for territorial governments to generate income through larger shares of resource bonanzas.
Building upon this model, recent policy and legislation initiated by both federal and territorial governments has contributed to a reassessment of co-management structures. This is why (beginning in 2003, with revisions to the Yukon Act which that led to devolution of resource management authority to the Yukon, and continuing today with the devolution of similar powers to the NWT as well as the continuing accommodation of the role of and claims agreements towards similar ends) economic development needs to be understood in institutional and political context. The structure of local power arrangements has always been instrumental in the way in which the benefits of development have been embedded, or not, within northern communities.
In April 2003, for example, the Yukon Act ensured devolution of resource management. Much like a provincial government, it gained control over its natural resources. This gives the Yukon the right to collect royalties on Crown land owned by the federal government. In a development climate here large areas of Crown land are being explored and potentially invested in for their natural resource development, such a new territorial power is substantive. It meant that monies which would have previously flowed out of the north, to the benefit of those elsewhere in the nation, are now directly retained by the Yukon Territory. Similarly, the Northwest Territories have now seen gains on territorial powers as a new devolution agreement was reached in 2014 (see Anthony Specca’s commentary in this Yearbook).
For the Yukon and the Northwest Territories, there have been significant gains associated with devolution agreements recently concluded. Devolution and the landscape of land claim agreements is instrumental to economic development processes in the Canadian North. There is also a significant impact for indigenous governance exerted by this devolutionary process. The new devolution act in the Northwest Territories, for example, does away with local land and water boards negotiated as part of the land claims agreements. The Devolution Act combines all boards into a single land and water board, made up of members from across the territory. The rationale is ‘regulatory simplification’, and was first articulated by McCrank in 2008.
Devolution and the deregulation is thus consistent with what could be termed a new neoliberal approach to Northern economic development, brought to bear by the current Harper Government. This agenda builds upon what the federal government calls its “Northern Strategy”, introduced in 2007. The goals of this strategy were articulated in 2009, in Canada's Northern Strategy: Our North, Our Heritage, Our Future. Cornerstone pieces of this agenda also include the Economic Action Plan, and the 2010 Northern Jobs and Growth Act. The latter impacts upon the Nunavut Planning and Project Assessment Act and the Northwest Territories Surface Rights Board Act, along with amendments related to the Yukon Surface Rights Board Act. While the intent of the Northern Jobs and Growth Act is partly to meet the Government of Canada’s outstanding legislative obligations under the Nunavut Land Claims Agreement and the Gwich’in and Sahtu Land Claim Agreements, it also is very invested in streamlining and improving regulatory processes in the North – and is therefore very much an outcome of projects such as the McCrank Report of 2008.
If we return to our original framework – looking at this process of development and devolution from a ‘Canadian Studies’ perspective, what results is a web of development discourses and initiatives which are not easily reduced to a single framework of analysis. Development agendas which create new relationships between citizens, states, corporations, environment and resources, and responding to a social agenda which increasingly legitimizes and calls for strengthened indigenous involvement and self-determination. Canada’s Arctic is now looking very much like many other ‘underdeveloped’ regions – that is to say communities undergoing considerable developmental pressure while being caught up in a development agenda directed from distant capitals. Still, the development agenda is intersected by a rising indigenous rights agenda, strong new voices from a multitude of local, regional and global lobby and stakeholder groups. It is in this context that we return to the idea of ‘sovereignty’. Indeed it the latter, ‘sovereignty’, which tends to occupy the Canadian Studies literature (Byers 2010; Huebert 2010; Coates et al. 2008) focus on the north more substantively than ‘economic development’. Partly, this is because the legacy of Canadian Studies itself has linked political economy to state, and has either romanticized or villainized resource extraction industries, depending upon whether state or indigenous interests are described. Berger’s inquiry, for example, seemed to suggest to many that economic development was not in the interests of indigenous peoples and northerners, and therefore all development was bad, although this is not exactly what Berger said. This essentialization and polarization of the two perspectives has left interest in mapping the less exciting, but more important, minutia of the landscape of development to fewer scholars, like Campbell (1996), Fenge and Hason (2011), Robidoux (2004), Bone (2012), DiFrancesco (2000), Petrov (2010; 2013), or indigenous writers whose work is less accessed by mainstream academia. It also competes with larger nation-building narratives and state agency, particularly in terms of the state’s colonial legacy – and it is the latter of these that we have found particularly compelling over time and in which we have invested most of our scholarly efforts. Campbell, Fenge & Hason (2011) see this as an obsession with the political lens of Arctic academia, and perhaps in this assessment they are correct.
Berger (2005, 2006) himself has argued only recently that the fact of land claim agreements has not resolved the very real and complex issues that face northern communities in their assertion to have some control over their own fate. The holding status of devolution for Nunavut is a case in point. Development and its environmental impacts are important areas of fate control. The way in which regulatory boards have been established, funded, also plays a role. The federal government has not lived up to many of its solicitations, and as such this jeopardizes much meaningful development discourse, development for which many indigenous and non-indigenous Northerners are anxious for. This, we believe, is an important topic in which ‘Canadianists’ should engage.
The authors would like to thank the Borders in Globalization (BIG) project funded by SSHRC, and Trent University’s Frost Centre, Canadian Studies Faculty Research Grant Program for support which lead to the wiring of this paper.
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