Opening words: Updating of Finland s Arctic Strategy and Creating a National Maritime Strategy

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1 Minister of Transport Merja Kyllönen Opening words: Updating of Finland s Arctic Strategy and Creating a National Maritime Strategy 8th Arctic Passion seminar 14 March 2013 Dear Friends Thank you very much for inviting me to speak here today. It is an honour for me to open this seminar and discuss Arctic and maritime questions with you. These themes are topical for Finland now, as we are currently drafting our national strategies for both Arctic issues and maritime transport. Our key goals are to boost Finland's role in the Arctic region, deepen international cooperation and maintain stability in the Arctic region. Last autumn, the Finnish Government gave its policy lines for the revision of Finland's Arctic Strategy. These policy lines have been grouped under four areas of focus. The first one is that Finland is an Arctic country. Second, Finland has Arctic expertise. Third, Finland respects the principles of sustainable development. And fourth, Finland is committed to international cooperation in Arctic issues. Our climate, environment, geography, history and experiences have shaped our Arctic identity. And Finland truly is an Arctic nation; one third of all people living in the area north of the sixtieth parallel are Finnish. The position of the Sámi, Europe's only indigenous people, deserves particular attention. The Sámi need to be ensured the opportunity to participate in decision-making affecting their own status. The northern part of Finland must remain a stable and safe place to live and work in. The Arctic region is undergoing major changes. But Finland has the expertise and know-how necessary to understand, adapt to and make use of the ongoing changes. It is crucial that the expertise and research in this field be continued and developed further. We aim to become a model of Arctic expertise, both in research, and in the responsible use of expertise on a commercial scale. The global impacts of climate change, sustainable use of natural resources in the Arctic region, and environmental considerations are at the core of our Arctic policy. The revision of the Arctic Strategy will be completed this spring. Right now is the time for finalising the strategy, inviting comments on it, and then, making decisions. The Strategy will set out clear, concrete measures. It will pave the way for the Ministries' policies in Arctic affairs for the next three or four years. As regards the transport field, it is particularly important that resources be focused on maintaining and deepening Arctic expertise in shipping. The gradual opening of the Northeast Passage will mean increased activity in the North, which in turn will create significant opportunities for Arctic expertise.

2 2 The development of transport connections is also an integral part of the Arctic Strategy. New mines that are opening require better road and rail links. The Finnish Transport Agency has reviewed the situation, and based on the results, it has decided that the connections are to be improved step by step over the next few years, to match the development of transport demand. In the near future, transport for the needs of mining in North and East Finland will [continue to] take place through the ports at the Bay of Bothnia. In anticipating the future beyond this, we need collaboration with our northern neighbours and with mining companies. We should also be aware that transport needs are changing and that new routes may become available, such as the Northeast Passage. Finland identified the need for a national maritime strategy last year, when we were drafting the Transport Policy Report. The previous strategic vision was outlined about ten years ago. With shipping on the Baltic Sea and globally facing new challenges, this is a good time for strategy work. The focus in economy is shifting towards Asia. In the course of the next couple of decades, Africa and South America are also likely to join the competition for the economic dominance of the world. This will change the global transport flows. At the same time, new shipping routes are opening up. In Finland, the world of business and industry is changing radically: our traditional industries are seeking new products and markets; information and electronic engineering industries are struggling for survival; and mining industry is expanding. The service sector is getting stronger, which is reflected in the volume of transported goods. In this rapidly changing operating environment, we cannot afford to be passive. Instead, we must react and take bold strategic decisions. Strategy work allows us to discuss possible future trends together and to exchange ideas on whether we see Finland as a forward-looking and highly valued expert in maritime affairs, or as a timid and isolated country fading into the background. What we need is teamwork and a common vision for the future. We need confidence. I personally have strong confidence in the future - despite the huge challenges that shipping and the industries which rely on it have had to confront lately. The Government acknowledged these challenges at its midterm review session a couple of weeks ago. For the remaining part of the Government's term of office, steps are to be taken to avoid any increase in costs or regulatory burden on the industry. In addition, the existing regulatory burden will also be reviewed. The strategy work will be complete by the end of this year. Our agenda for the next few months includes the creation of a common vision for the future. In the autumn, we will focus on preparing an action plan.

3 3 I have called for open and transparent strategy work. It is important to remember that we are not doing this for the Ministry or the Government, but for the entire country. The purpose of the strategy is to ensure Finland's competitiveness and the vitality of our maritime cluster. We all know that Finland is very much dependent on shipping. Without maritime transport, we would not have coffee or oranges. Industrial activities and export to major markets would be almost impossible, and there would be very little raw material available to us. This is why the Government underlines how important it is that the conditions for maritime transport are ensured. Finland needs wellperforming exports, and to achieve this, our common purpose is to support our businesses and export industry and to promote economic growth. The global nature of shipping means that the necessary regulatory decisions are made at international forums: in the IMO and EU. Finland participates in this work, and it is clear that the decisions made at these forums are relevant for us, too, as members of the EU and IMO. One important task for Finland is to pursue more systematic exercise of influence and send a common message at international and EU level. It is essential that we speak with a common voice. Our future lines of action must be based on joint strategic deliberation. There are also a number of considerations which we need to address at national level. These include the service level of foreign trade transport, and steps to ensure reliable transport round the year. In addition, we have to discuss how to arrange port facilities, pilotage and inland connections to the ports. It is also clear that ensuring smooth and reliable winter navigation is among the key areas that we need to focus our resources on. I have full confidence in our expertise in this regard. Environmental questions are also crucial. Propulsion systems of the future, including ship fuels, are currently being explored under the leadership of our Ministry. This work will be finalised in the coming weeks. Liquefied natural gas, or LNG, as ship fuel would seem to be an option well worth considering over the medium term. The LNG action plan which is now being prepared will provide us with valuable guidelines on how to promote the uptake of LNG in shipping. Next week, at the discussion on spending limits, the Government will make decisions on whether it will provide compensation to the industry for the costs arising from the Sulphur Directive. An additional challenge in maritime transport is how to ensure that there is skilled personnel available. The numbers of people applying for maritime jobs have declined globally. The entire shipping branch should make efforts to develop the branch further and to increase its competitiveness as an employer. And of course, we should not forget safety. In order to enhance the safety of sea transport and reduce the risk of oil spill accidents on the Baltic Sea, automatic risk detection and foresight tools are being developed for the guidance systems of maritime transport.

4 4 We cannot afford to sit still, waiting for the dark clouds over shipping to gather. We have no other choice but to make our way forward and think about the options available to us. This is where strategy work steps in. A good example of what action has been taken is the tonnage tax reform which came into force a year ago. It seems that the reform is bringing new ships under the Finnish flag. At the same time, it is creating hundreds of new jobs in our country. So, determined efforts have borne fruit: increasing numbers of ships are now being registered in Finland. In this year's Budget, funding has been allocated to basic waterway maintenance, adaptation to the new sulphur requirements, and procurement of a new icebreaker. The State has also reserved appropriations for the so-called retrofitting investment aid which is aimed at alleviating the economic impact of the new sulphur requirements. Additional support measures will be deliberated next week, at the government discussion on spending limits. Finland's ice-breaker capacity is ageing. In order to increase capacity, the Finnish Transport Agency is procuring a new ice-breaker. The total budget of this project is 125 million euros. The new icebreaker has the properties of a conventional icebreaker. It will be optimised to provide efficient icebreaker assistance on the Baltic Sea under all ice conditions. In addition, it will be designed to perform oil spill response and emergency towing operations at open sea. The purpose is to take the new icebreaker into service during the winter season Dear Friends The Maritime Strategy is the Government's joint effort - it has representatives from nearly all Ministries. The Finnish Transport Agency and Transport Safety Agency, for their part, provide a strong contribution to this work through their extensive transport expertise. In addition to collaboration between government bodies, it is also equally important to engage in dialogue and cooperation with the stakeholders. It is our wish that this work is done in a transparent way, sharing ideas and experiences with each other. Indeed, we have already joined our forces in creating a vision for the future. It seems that in the shipping of the 2020s, it is particularly important to utilise information as part of the transport chain, launch strong Arctic and safety expertise into the market, and keep one step ahead in the development of environmental technology. This will mark out the road to success. The Maritime Strategy is being drafted in the spirit of the new transport policy. What we aim to do is to achieve increased effectiveness and cost-efficiency. We are ready for change and reform, and eager to discover new ways of doing things.

5 5 With strategy work, we want to ensure the survival and strength of Finland's maritime industries and businesses. I consider the Maritime Strategy to be a top priority, and I am extremely pleased to see how active our stakeholders have been in this work. I would like to extend my warmest thanks to all of you for that! There are still many challenges ahead, but at the same time we also have an excellent opportunity to look into the future together, and to come up with innovative and modern ways of doing things. The Strategy will help us make shipping one of Finland's success stories in the 2000s. With these words I wish you an inspiring seminar day and many fruitful discussions. I am delighted that we have this opportunity today to talk about these important questions!