Opening the Arctic for Business Regulatory framework needed to promote economic development in the Arctic

Transcription

1 1 Opening the Arctic for Business Regulatory framework needed to promote economic development in the Arctic Mr. Chairman, Minister, distinguished guests, I thank the Icelandic American Chamber of Commerce and its partners for inviting me to share with you a couple of reflections on the Arctic and the need for a regulatory framework for an economic development. There are those that argue that a similar international regulation is needed in the Arctic as is in place for Antarctica. That is not so. Antarctica is in principle uninhabited and a de facto condominium while all landmass in the Arctic belongs to well established states despite a couple of territorial conflicts. To us, the four million people that live in the Arctic, it is no frontier territory, it is home. So the Arctic is in principle a well governed region with strong legal and institutional structure, characterized by North American, Nordic and Russian traditions. And for those areas of oceans in the Arctic that lie outside of the sovereign territory of the Arctic states we already have international regulation through the United Nations Convention

2 2 of the Law of the Sea (UNCLOS) and various other international agreements. When looking at regulatory framework in the Arctic one has to look at the Arctic Council. It is a robust circumpolar cooperation comprising the eight Arctic states originally created in Initially it was a forum largely focused on science and research cooperation and as such it has proved a valuable source of knowledge on the Arctic for both governments and the business community. Today, increased economic activity, shipping, tourism and resource development has called for the Council to take on expanded roles and responsibilities, such as business cooperation and environmental security and protection. The Council has moved from being a policy-shaping to a policy-making body, with two legally binding agreements on oil spill prevention and response and on search and rescue signed in the last years. Although the Arctic states may not see eye to eye an all international issues this regional partnership is a demonstration of a successful cooperation guided by the collective interests of the region with constructive participation of all the Arctic Council members. The growing international significance of the Council is also underlined by the fact that it

3 3 now includes ten out of the eleven largest economies as members or as observers, six out of the fifteen largest oil producers and nine out of the twenty largest fishing nations in the world. It is furthermore worth mentioning that the Council is set up in a unique way. With close to half a million indigenous peoples living in the Arctic their organizations are actively involved in the work of the Council as permanent participants. In most cases the arctic residents constitute a small group within their country, both nonindigenous and indigenous people. Within the group of eight member states of the Arctic Council Iceland is unique for two things, first that all of our people are arctic residents and secondly for not having any indigenous population. However, the former makes us identify even stronger with the indigenous people of the Arctic. We are used to promoting and defending our arctic interests in various forums where there is often lack of knowledge and understanding of our situation. We argue that none are more committed to a sustainable utilization of natural resources than we the arctic residents and we believe it to be of existential importance that the people of the

4 4 Arctic be allowed to develop economically in an environmentally friendly and sustainable way. The Arctic is a vast expanse of natural resources that are both getting more accessible and more sought after because of technological advances and climate changes amongst other things. For us arctic residents it is our duty only to utilize these natural resources in a sustainable manner but it is also our right to do so for our economic benefit. Moreover, transportation routes might be opening up, thus bringing major markets in Asia, Europe and North-America closer together, as well as creating additional opportunities in tourism. The possibilities unlocked by this new reality bring with them the obligation to act in a responsible manner. In addition to environmental concerns regional stakeholders must as well give due attention to the security challenges, including improved situational awareness and strengthening search and rescue capabilities. With increased human activity in the Arctic comes increased risk, both for people and the environment. Many of these risks do not respect manmade territorial delimitations of responsibility and thus make cross regional cooperation absolutely necessary.

5 5 As mentioned earlier the Arctic Council is already responding to this with legally binding agreements on Search and rescue and on oil spill prevention and response. This is a policy priority for Iceland and the feasibility of establishing an international rescue and response hub in Iceland is being studied. We also recognize that in some parts of the Arctic the cost of doing business is high - conditions are harsh, logistics are difficult and infrastructure is lacking. However, these constraints can be overcome and in fact I can draw attention to Iceland as an arctic hub with excellent infrastructure and international connections that could make a much larger nation proud. In addition I would like to point out that the Arctic can in general also offer many advantages that cannot be found in other parts of the world. The region is stable, peaceful and governed by solid regional cooperation, not only through the Arctic Council but also through various other regional cooperation forums. As I already said the Arctic is in principle a well regulated region at the national level. In the case of Iceland we are here today in the presence of our Minister of Finance that is an ardent champion of improving the business

6 6 environment in Iceland, reforming corporate taxes and cutting red tape to facilitate investments. Regulatory harmonization between the three main systems of North America, the Nordic Countries (in essence Europe) and Russia will hardly become a task of the Arctic cooperation. However, a continued activity of negotiating legally binding agreements under the Arctic Council might prove supportive of increased cross border economic activity, not to mention the highly important regulatory work of the IMO in recent years. But I don t think we can leave this subject without discussing the most important factor in economic development of the Arctic, which in my opinion is the human capital. The Arctic can be a harsh and unforgiving environment. Those who have proven themselves in their line of expertise in one place up in the high north should have an advantage throughout the Arctic. Those credentials may however be lost going through traditional channels south to business and financial centers in capitals before turning north again in another Arctic country. Direct cross border regional relations within the Arctic are therefore of a fundamental importance. The various regional cooperation forums have been fostering such relations between governments, local governments, civil society and in the field of science and research. Until lately the private

7 7 sector has been lagging behind. In order to foster economic development it is imperative to encourage east to west business relations meaning direct cross border relations between regions instead of always going through capitals. It was therefore particularly important that the Arctic Economic Forum was formally established last September. Iceland contributed to the preparatory work and with some authority as an Icelandic Arctic Chamber of Commerce had already been established in Strategic geographical location, vast natural resources, the open, unspoiled beauty of the Arctic, will hardly lead to much economic development without the human dimension of the arctic residents. Icelanders as other arctic residents know and understand the difficult conditions in the north. The extreme environment is natural to us. Icelandic sailors know how to navigate the most difficult seas. Our engineers know how to design and build structures that can withstand the most fearsome winter storms. The Icelandic labor market is characterized by high participation of both men and women, by high skills and education and strong connections to a vibrant higher education system with strong international roots.

8 8 This means that we in Iceland have companies of international standing that have decades of experience working in Arctic conditions in sectors such as fishing, transport on land, sea and air, construction, hydro and geothermal power generation, logistics and engineering services to name but a few. The same applies surely to other arctic regions and we should look for ways of encouraging direct relations and exchanges across borders. Dear participants, In conclusion; the Arctic has been placed at the core of Iceland s foreign policy for several years now. The Parliament unanimously adopted an Arctic Policy for Iceland back in 2011 and the current government reinforced that policy by establishing a ministerial committee chaired by the Prime Minister to ensure a holistic approach to Arctic matters by all ministries. After opening our new General Consulate in Nuuk in Greenland in 2013 little less than half of Iceland s diplomatic representations abroad are in the Arctic Council Member states and several more in Arctic Council Permanent Observer states. Having served as Permanent Secretary of State in the Ministry for Foreign Affairs for the last five years prior to becoming Iceland s UN Ambassador it was my pleasure to be allowed to

9 9 share with you my reflections on the important topic you choose for todays conference. Thank for your kind attention.