VYTAUTAS MAGNUS UNIVERSITY
FACULTY OF POLITICAL SCIENCE AND DIPLOMACY REGIONAL STUDIES DEPARTMENT
Rokas Žvirblys
THE ARCTIC POLICIES OF GREENLAND, ICELAND AND THE FAROE ISLANDS
Master‟s thesis
Baltic region studies program, state code 621L20006
Political sciences
Supervisor: Prof. Dr. M. Jurkynas ______(Degree, name, surname) (Signature) (date)
Defended:______(Dean of FPSD) (signature) (date)
Kaunas, 2015
TABLE OF CONTENTS SUMMARY ...... 3
SANTRAUKA ...... 4
INTRODUCTION ...... 5
1. THE FAROE ISLANDS, ICELAND, GREENLAND AND COMPLEX INTERDEPENDENCE 8
2. ENERGY AND ECONOMY DEVELOPMENT AND POLICIES IN GREENLAND, ICELAND AND THE FAROE ISLANDS ...... 20
2.1 Greenland ...... 22
2.2 Iceland ...... 31
2.3 The Faroe Islands ...... 38
2.4 Comparison of Greenland‟s, Iceland‟s and the Faroe Islands‟ energy and economy development and policies ...... 45
3. POLITICS OF GREENLAND, THE FAROE ISLANDS AND ICELAND IN THE ARCTIC .. 52
3.1 Greenland ...... 53
3.2 Iceland ...... 59
3.3 The Faroe Islands ...... 66
3.4 Comparison of politics of Greenland, the Faroe Islands and Iceland in the Arctic ...... 73
CONCLUSIONS ...... 79
LIST OF REFERENCES ...... 81
Žvirblys, R. The Arctic policies of Greenland, Iceland and the Faroe Islands: Master„s Thesis in Political Science / supervisor prof. dr. M. Jurkynas; Vytautas Magnus University, Faculty of Political Science and Diplomacy, Regional Studies Department. Kaunas, 2015. 90 p. SUMMARY Because of the melting ice in the Arctic, states are able to look into opening possibilities hidden in the lands and waters north of the polar circle. Politically strongest countries, being able to make the most difference, get the most attention, however, smaller countries - Greenland, the Faroe Islands and Iceland also are involoved in Arctic politics and have their own role and positions. The question is – what are the political and economic Arctic policies of Greenland, the Faroe Islands and Iceland? The objects are economic, energy developments and the policies for the Arctic region of Greenland, the Faroe Islands and Iceland. The aim of thesis is to establish dynamics of the Arctic policies of Greenland, the Faroe Islands and Iceland in spheres of politics, economy and energetics. The tasks are: to discuss and remodel a theoretical background to the topic based on the Joseph Nye„s and Robert Keohane„s set of ideas called complex interdependence; to analyze Greenland‟s, the Faroe Islands‟ and Iceland‟s economic, energy situation and policies; to analyze Arctic policies of the Faroe Islands, Iceland and Greenland. Methods used in the thesis will be a case study, a qualitative comparative analysis and a document analysis method. The key of Arctic policies of Greenland, Iceland and the Faroe Islands is to be seen, heard, strengthen cooperation, use the international environment in the Arctic to the fullest. Such strategy is a viable option for these states, as their economies are dependent on international markets, which require them to be active internationally. Developments and policies of the three countries in oil exploration, renewable energy, fisheries and tourism industry are analyzed. The Faroe Islands and Iceland have published their own Arctic strategies, while Greenland provides very little information overall. Iceland has a long term approach based on cooperation and connection building in the Arctic, while Faroese and Greenlandic policies have a strongly pronounced self-centered approach and are affected by overreliance on the fishing industry. Greenland recently is putting most emphasis on tourism industry, the problem is that the country concentrates far more on economy and energy considerations than on politics. All three countries aim at positioning themselves among the decision-makers in the region, emphasize cooperation between each other, acknowledge the importance of the UNCLOS and the Arctic Council, but differences show up when discussing, for example, the Arctic 5 format or indigenous people.
3
Žvirblys, R. Grenlandijos, Islandijos ir Farerų salų politika Arktyje: Politikos mokslų magistro baigiamasis darbas / vadovas prof. dr. M. Jurkynas; Vytauto Didžiojo universitetas, Politikos mokslų ir diplomatijos fakultetas, Regionistikos katedra. Kaunas, 2015. 90 p. SANTRAUKA Dėl tirpsančio ledo už poliarinio rato, valstybės gali atidžiau pažvelgti į atsiveriančias galimybes Arkties vandenyse ir žemėse. Politiškai stipriausios valstybės galėdamos padaryti daugiausiai gauna ir daugiausiai žiniasklaidos, akademikų ir Arkties forumų dėmesio. Vis dėl to, mažesnės šalys – Grenlandija, Farerų salos ir Islandija taip pat dalyvauja Arkties politikoje, turi savo roles ir pozicijas. Klausimas yra – kokia yra ekonominė ir tarptautinė Grenlandijos, Farerų salų ir Islandijos politika Arktyje? Tyrimo objektai yra Grenlandijos, Farerų salų ir Islandijos ekonominė, energetinė raida ir politika Arktyje. Darbo tikslas yra nustatyti Grenlandijos, Farerų salų ir Islandijos politinę, ekonominę ir energetinę dinamiką Arktyje. Darbe iškeliami uždaviniai yra: išanalizuoti ir permodeliuoti Joseph Nye ir Robert Keohane kompleksinių tarpusavio ryšių teoriją kaip teoretinį pagrindą; išanalizuoti Grenlandijos, Farerų salų ir Islandijos ekonominę, energetinę situaciją ir politiką; išanalizuoti šių šalių politiką Arktyje. Metodai naudojami darbe yra atvejo analizė, kokybinė lyginamoji analizė ir dokumentų analizė. Visų trijų šalių Arkties politikos esmė yra būti matomoms, išgirstoms, stiprinti kooperaciją tarp bendro požiūrio ir problematikos valstybių, pilnai išnaudoti tarptautinę erdvę Arktyje. Tokia strategija yra realus pasirinkimas Grenlandijai, Farerų saloms ir Islandijai, nes jų ekonomika yra priklausoma nuo tarptautinių rinkų, o tai reikalauja iš šalių aktyvumo tarptautinėje erdvėje. Analizuojama visų trijų šalių raida ir politika naftos gavyboje, atsinaujinančioje energetikoje, žuvybos ir turizmo srityje. Farerų salos ir Islandija yra sudariusios savo Arkties strategijas, tačiau Grenlandija neturi tokio leidinio ir teikia labai nedaug informacijos šia tema. Islandijos strategija yra ilgalaikė, paremta kooperacija ir santykių kūrimu Arktyje, o Farerų salų ir Grenlandijos politika turi išreikštą egocentrišką pobūdį ir yra veikiama per didelės ekonominės priklausomybės nuo žuvybos industrijos. Paskutiniu metu Grenlandija teikia dėmesį turizmo industrijai, bet šalis koncentruojasi daug labiau ties ekonomika ir energetika nei ties politika. Visos trys šalys siekia būti tarp šalių sprendimų priemėjų regione, pabrėžia tarpusavio bendradarbiavimą, pripažįsta UNCLOS teisę ir Arkties Tarybą kaip svarbiausią organizaciją regione, bet skirtumai atsiskleidžia diskutuojant apie, pavyzdžiui, Arkties 5 formatą ar vietines tautas.
4
INTRODUCTION
Relevance and problem. The harsh climate conditions, freezing cold and frozen seas find it harder and harder to stop states from looking deeper into possibilities hidden in the lands and waters north of the polar circle. What used to be territories mostly scientists were interested in, are now an arena of growing international politics. This is because of the melting ice around the Arctic circle, or rather the speed and the amount of the melting itself. As a result there are growing possibilities for northern sea routes, easier or new access to subsoil fossils which in the past were less possible or impossible because of the ice. There are only so few countries which territories reach the Arctic circle: Norway, Sweden, Finland, Denmark, Iceland, Russia, USA and Canada. Unsurprisingly, with such a collection of countries, there is somewhat of a competition between them in resource exploration and implementation of newly arising possibilities, although in a frame of international law and organizations. The latter aspects push countries to acknowledge and mind the interests of smaller countries that have valid political interests in the region. As usual, politically the strongest countries being able to make the most difference get the most attention in the media, in the academic writings and in the international Arctic forums. But what about the weaker ones? Precisely, Greenland, the Faroe Islands and Iceland? All three are realtively small political entities and because of that are in a similar situation, but a deeper look shows that their positions and situation have differencies. The question here is – what are the political and economic Arctic policies of Greenland, the Faroe Islands and Iceland? The objects of the research are economic, energy development and policies for the Arctic region of Greenland, the Faroe Islands and Iceland. The aim of this thesis is to explain dynamics of the Arctic policies of Greenland, the Faroe Islands and Iceland in spheres of politics, economy and energetics. The tasks of the study are: 1. To discuss and remodel a theoretical background to the topic based on the Joseph Nye„s and Robert Keohane„s set of ideas called complex interdependence. 2. To analyze and explain Greenland‟s, the Faroe Islands‟ and Iceland‟s economic, energy situation and policies by applying reconstructed theoretical underpinnings. 3. To analyze Arctic policies of the Faroe Islands, Iceland and Greenland. Methods used in the thesis will be a case study, a qualitative comparative analysis and a document analysis method.
5
Notable literature used in writing of this thesis are “Power & Interdependence, 4/E”1 written by Robert Owen Keohane and Joseph Samuel Nye, “Strategy Papers on the Arctic or High North: A comparative study and analysis”2 by Alyson JK Bailes and Lassi Heininen, Peter J. Katzenstein‟s “Small States in World Markets”3, but since country positions are analyzed, internet sites of state institutions or state owned companies, international organizations, also Arctic strategies and other relevant publications are an important source because they provide primary information. Another point is that the most up to date information is important, thus internet sites of the Arctic Institute, Bloomberg, NORA region trends, Financial Times, ASKJA Energy – The Independent Icelandic Energy Portal and others are an important source. Theoretical approach. Since Greenland, the Faroe Islands and Iceland are all politically weak countries if compared to their fellow Arctic countries like Canada, Russia or Norway, power politics would not be the strong point of the former states to affect politics in the Arctic region to their advantage. The common solution is then to count on the international law and organizations to maximize their influence. Thus, a viewpoint of liberalism international relations theory is fitting here. A complex interdependence4 concept created by Robert Keohane and Joseph Nye is chosen as the basis for the theoretical model. This theory is the two authors‟ critique of political realism and an analysis of international interdependence. The basic focus points of the theory are: the connections between governments and other international actors; non-hierarchical arrangement of issues equalize their relative importance; interdependent relations reduce military importance. The theory can be used discussing the politics of Greenland, the Faroe Islands and Iceland because they are less powerful countries in the region and, naturally, seek to find their strength through international organizations, interconnections, law and interdependence. The military aspect of complex interdependence could be touched discussing how Greenland, the Faroe Islands and Iceland are affected by the security and military developments in other Arctic countries and overall in the region, but this would be an entirely different topic for another paper and is not discussed here. The analysis of the selected countries‟ economic and energy development and situation is in line with the theory, especially because they are small countries with small markets, meaning it is advantageous for them to be active in international markets, also because they need investments from international organizations to do oil and gas exploration.
1 Keohane, R.O., Nye, J.S., Jr. Power & Interdependence, 4/E. Longman, 2011. 2 Bailes, A.J.K., Heininen, L. Strategy Papers on the Arctic or High North: A comparative study and analysis. Alþjóðamálastofnun og Rannsóknarsetur um smáríki, háskólaútgáfan, 2012. Retrieved from: http://ams.hi.is/wp- content/uploads/old/arctic_strategies_innsidur.pdf; last checked: 2014 04 28. 3 Katzenstein, P.J. Small States in World Markets. Cornell University Press, 1985. 4 Keohane, R.O., Nye, J.S., Jr. Realism and Complex Interdependence, Chapter 2. Power & Interdependence, 4/E. Longman, 2011. P. 19. 6
In first chapter, the theoretical approach is discussed, in the second chapter, economic and energy developments of the Faroe Islands, Greenland and Iceland are discussed and in the third chapter, Arctic strategies of these countries are analyzed and explained.
7
1. THE FAROE ISLANDS, ICELAND, GREENLAND AND
COMPLEX INTERDEPENDENCE
Since Greenland, Iceland and the Faroe islands are relatively small and in many aspects not strong countries, they could hardly find success in international arena, or more importantly here, in Arctic, basing their policies on realist hard polititcs principals. Power is a relative term, but in Arctic, Greenland, the Faroes and Iceland are the smallest countries. In liberal international theory, relations, cooperation, political and economic connections are important, as it will be discussed later in the chapter. This leads to assume that liberal thought would fit these countries better, even more so, there are a number of Arctic organizations like Arctic Council, Conference of Parliamentarians of the Arctic Region, International Maritime Organization, Barents Euro-Arctic Council and other in which states can operate, create connections and ties between each other. Thus, as a theoretical background for this paper, Joseph Nye„s and Robert Keohane„s complex interdependence theory or rather set of ideas has been selected. The idea is the two authors„ critique of the realist worldview, as Keohane and Nye say, it is an ideal type and the opposite of realism5. They suggest that after the World War II realist assumptions about the centrality of the state have been changed to ever growing connections between them and not only at state level. Authors are not trying to prove that violence and conflict have disappeared, but they point out that there is a growing importance of non-security-related issues like, for example, global environmental concerns6. Keohane and Nye distinguish three main characteristics of complex interdependence: 1) multiple channels; 2) absence of hierarchy among issues and 3) regionality aspect in military questions7. In this chapter basic liberal and neoliberal ideas in international relations and the proposed theory will be discussed along with the three characteristics presented by Keohane and Nye. The discussion, criticism and adaptations of the theory will set a theoretical framework to analyze economic and energy developments and policies and the international Arctic policies of Greenland, Iceland and the Faroe Islands in following chapters. First of all, in this paper, it is assumed that countries selected for the analysis are weak political units and economies. It can„t be said they are weak states, because Greenland and the Faroes‟ are autonomous regions in the Kingdom of Denmark, albeit with their own governments
5 Keohane, Nye, 2011. Op. Cit. P. 19. 6 Keohane, R.O., Nye, J.S., Jr. Realism and Complex Interdependence. Contending Views of IPE. International Political Economy: State-Market Relations in a Changing Global Order, 2nd Edition. Editors: Goddard, C. R., Cronin, P., Dash, K. C. Palgrave Macmillan, 2003. P. 49. 7 Keohane, Nye, 2011. Op. Cit. P. 20-21. 8
and parliaments and wide competencies. While political power is a subject for wider discussion and can not be easily meausred, to build this argument we can make an overview of a selection of economic statistics of these countries. To do this, information provided in the World Factbook internet page8 was used as it seems to be one of the more reliable sources to get these statistics, especially for the Faroe Islands. One of the universal measurements to analyze, monitor or compare state economic performance is GDP (purchasing power parity). The latter of the Faroe Islands reaches 1.471 billion USD, Iceland„s – 13.11 billion USD and Greenland„s – 2.133 billion USD, in years 2010, 2013 and 2011 respectively. For comparison let„s take Sweden, Norway and Denmark, their corresponding GDP„s were: 393.8, 282.2 and 211.3 billion USD in 2013 in each country accordingly. Thus we can see that, at least looking at this measurement, Greenland, the Faroe Islands and Iceland produce considerably smaller output, and other countries of the region like USA, Russia or Canada would show an even bigger gap. It is noteworthy that Iceland‟s statistic is two or three years newer than Greenland‟s or the Faroe‟s and by that time the effects of the financial crisis of 2008 have been reduced and overall the world financial situation was different, nevertheless, in comparison to Sweden, Norway and Denmark, a big difference is visible. Therefore, with such a difference of GDP there is a gap between the capabilities to what countries can do, how much they can invest in various activities in the Arctic. Nevertheless, Iceland and the Faroes are relatively small when speaking in geographical terms. This could not be said about Greenland, which with its size of 2,175,600 sq km is the biggest island in the world9, but however vast it may be, most of it is still covered in ice. Living conditions far up north are much more difficult than at most places closer to equator and in any case, Greenland, Iceland and the Faroes cannot accommodate huge amounts of people, not that many of them would like to live in some of the most inhospitable places on the surface of the earth anyway. In the Faroe Islands, for example, population is almost 50 thousand, Greenland – over 57 thousand and in Iceland, far more – around 320 thousand (all are estimates of 2014)10. Barry Buzan argues that: „size counts because states are supposed to be relatively permanent creations fulfilling the wide range of functions necessary for self government. Without sufficient size, the unit is too fragile in the company of its larger fellows and lacks the capability to perform all the tasks of self
8 Central Intelligence Agency. The World Factbook. Information retrieved from: https://www.cia.gov/library/publications/the-world-factbook/; last checked: 2015 03 21. 9 Facts about Greenland. Greenland Corporate Website. Retrieved from: http://corporate.greenland.com/en/press- pr/press-information/facts-about-greenland/; last checked: 2015 04 13. 10 The Faroe Islands, Greenland and Iceland‟s profiles. The World Factbook. Retrieved from: https://www.cia.gov/library/publications/the-world-factbook/; last checked: 2015 03 21. 9
rule“11. Indeed, if an international situation is such that realist worldview fits best, the latter argument holds true. On the other hand, this idea is challenged by such micro-states like Singapore, Lichtenstein or Andorra, but it very much depends on the neighboring countries and their political culture. Nevertheless, in absolute terms, size, amount of people and other resources do count, but as mentioned, it counts in relation to surrounding countries. For example Lichtenstein finds itself in far better condition then let„s say Israel which is constantly fighting against Palestine, or vice versa for that matter. GDP per capita shows different trends than the first measure we looked at. In the Faroe Islands it is 30.500 USD in 2008, in Greenland - 38.400 USD in 2008, Iceland – 40.700 USD in 2013, Sweden – 40.900 USD in 2013, Norway – 55,400 USD in 2013 and Denmark – 37.800 USD in 2013. Here we find there is no such big gap as in the first case, which is not least because of the difference in the number of citizens12. It means that general living standards should be similar in all countries, but state-wise, smaller countries are not as capable as the stronger ones in activities that require big investments. Moreover, having to heat their homes and overall need of energy to work and live in cold environment means that there is less capital to invest in other things. Overall, the GDP measures show that Greenland, the Faroe Islands and Iceland can not compare to other countries in the region, they are the smallest, have very small populations and accumulate far less gross domestic product than other countries in the region and therefore it is much more difficult to implement expensive and significant economic developments in the countries and in the region. This in turn makes them less capable regional players. Being a focal point of Keohane and Nye„s theory, interdependence is an important tool, for example, in politics, but also an affect of a globalized world today, especially economically. It is therefore valuable to look at the most important export and import partners of Iceland, Greenland and the Faroe Islands. It will show the most important trade partners and it will allow to see partners Arctic countries, number of them which will give an idea on how interrelated the analyzed countries are in trade sector in the region. For this purpose we can examine the table below which shows the most important export and import partners of the said countries in 2012. Table 1. Greenland, Iceland and the Faroe islands‘ trade partners Export partners Import partners
Greenland Denmark - 60.4%, Denmark - 65.4%,
11 Buzan, B. People, States and Fear, The National Security Problem in International Relations. Department of International Studies, University of Warwick, 1983. P. 41. 12 Statistical data gathered from: https://www.cia.gov/library/publications/the-world-factbook/; last checked: 2015 02 10. 10
Japan - 14.6%, Sweden - 17.5%, China - 7.9% Netherlands - 5.5% Iceland Netherlands - 30%, Norway - 16.6%, Germany - 12.9%, US - 10.2%, UK - 9.8%, Germany - 9.2%, Norway - 5.1%, China - 7.2%, US - 4.5%, Brazil - 6.7%, France - 4.4% Netherlands - 6%, Denmark - 5.7%, UK - 4.6% The Faroe islands Denmark - 23.4%, Denmark - 42%, UK - 21%, Norway - 32%, Nigeria - 13.4%, Germany - 8.7%, US - 8.9%, Iceland - 5.3% Netherlands - 8.4%, Russia - 7%, China - 4.4% Source: https://www.cia.gov/library/publications/the-world-factbook/ From the table above, several things can be underlined. First, even though Denmark is the most important trade partner for both of its autonomous territories, Greenland is far more dependent on Denmark than the Faroes are. Another problem for Greenland is that it has only a few important trade partners which is in part, again, because of the dependency on Denmark. Such situation creates a problem of very few alternatives for trade and limited variation in trade politics. Interestingly, UK does not appear in the list of import partners for the Faroes as other neighboring countries - Norway and Iceland, do. The latter, like the Faroe Islands, have a wider list or trade partners compared to Greenland. From the standpoint of complex interdependence, having more export and import partners helps to create connections with other countries. Such relations intertwine countries and the effects do spillover to other spheres like politics, social or environmental issues and also push away ideas related to military issues. Economic capabilities can affect the political ones when talking about international relations. Here, Iceland differs from the other two analyzed countries. It was a part of Danish Kingdom once, but became independent in 194413, now it is a highly modern country, an established democracy. Greenland and the Faroe Islands are still politically tied to the Danish Kingdom, thus their political abilities, along with their sovereignty are limited. Geographic location, size and available resources also create some problems regarding trade and state goals. From one standpoint, political power of a
13 Arter, D. Nation-building and state-building, 1809 -1944. Scandinavian Politics today. Manchester University Press, 1999. P. 40. 11
country is related to the goals that state wants to reach: if a country stands alone with its ideas that in some way involve other countries, it will have to extract much more political power, or power of influence towards other states than in case when allies are easily obtained because they all have a common goal. In international relations, as in other relations within a group, the most important are those who are most capable of solving the problem, those who have the resources and knowledge, but if a country lacks these assets, it has to rely on convincing others of worthiness of their plan. Barry Buzan argues that „weak states may find themselves trapped by historical patterns of economic development and political power which leave them underdeveloped and politically penetrated, and therefore unable to muster the economic and political resources necessary to build a stronger state“14. Such an argument, as we can find from the economic data discussed before is much the case with Greenland and the Faroes, but not so much with Iceland. Nevertheless, historical patterns are not the only problems for economic development as harsh and inhospitable climate conditions require massive amounts of energy, resources and technology for production of goods. Geographical isolation, climate conditions and population sizes aggravate economic development capabilities and political power in international relations of Greenland, the Faroe Islands and Iceland, which makes it hard and detrimental for these states to do power politics. These countries need to take a different approach. As weaker states have always searched for supporters, friends and allies, it is beneficial for them to create connections with other countries and expand in international trade and relations. It is therefore fitting to analyze Iceland, Greenland and the Faroe islands from the theoretical standpoint suggested by Keohane and Nye. For these relatively weak powers it should be beneficial to involve in the creation of ties between countries, creating political connections and opening new markets. As has been said earlier, Keohane and Nye have formulated three main characteristics of complex interdependence. The first of them is multiple channels, as explained by the authors, they: „<...> connect societies, including: informal ties between governmental elites as well as formal foreign office arrangements; informal ties among nongovernmental elites (face-to-face and through telecommunications); and transnational organizations (such as multinational banks or corporations). These channels can be summarized as interstate, transgovernmental, and transnational relations. Interstate relations are the normal channels assumed by realists.
14 Buzan. Op. Cit. P. 66. 12
Transgovernmental applies when we relax the realist assumption that states act coherently as units; transnational applies when we relax the assumption that states are the only units“15. The emphasis here is not only on the traditional formal connections between states, governments in various levels, but also on informal ties, transnational organizations, which in world of today is perfectly logical. There are corporations that create bigger revenues than states do, many businesses are international and these connections affect every country, thus national governments can no longer ignore the fact that they are not anymore the only actors in international relations and that various other subjects can change the situation. Multinational firms are also important not because they pursuit their own interests but in words of authors they „act as transmission belts, making government policies in various countries more sensitive to one another“. In such way the lines between domestic and foreign policies are blurred16. Although business organizations do not get direct attention in the paper, they can be important players. There are oil companies which invest money in oil well exploration and development, have the knowledge, technology and infrastructure that is not easily obtainable and costs a lot of money, thus these companies are important for smaller countries like Greenland, the Faroe Islands and Iceland. The former are also valuable in making connections, for local companies to do side business with. The second of the characteristics is absence of hierarchy between issues, authors describe that: „The agenda of interstate relationships consists of multiple issues that are not arranged in a clear or consistent hierarchy. This absence of hierarchy among issues means, among other things, that military security does not consistently dominate the agenda. Many issues arise from what used to be considered domestic policy, and the distinction between domestic and foreign issues becomes blurred. <…> Different issues generate different coalitions, both within governments and across them, and involve different degrees of conflict. Politics does not stop at the waters’ edge“17. Thus, the second characteristic denies the realist assumption that military security is the dominant agenda and implies that in different situations there can be different assessment and grading of issues, of their importance. Authors note two problems: one is that the variety of issues relevant to foreign policy has become more diverse and larger, meaning that all these issues cannot be subordinated to military security. Another problem is that every issue has its interest group making it harder to create a common state policy18. For example, hypothetically, fishing industry in
15 Keohane, Nye, 2011. Op. Cit. P. 20. 16 Ibid. P. 21. 17 Ibid. P. 20. 18 Ibid. P. 22. 13
the Faroe Islands would prefer that more of the state‟s budget would be spent on fishing vessel repair shipyard, but tourist industry would prefer investments in outdoors activity infrastructure. Therefore, the Faroese government can either invest in one of these spheres or in both, but neither of the solutions may make these two groups happy. In reality, issues usually affect more than their specific spheres, for example underdeveloped industry based on low technology comes with problems like damage to the environment, ineffective production of goods and usage of labor, also the production tends to be either more expensive or lower quality or both. This example shows that various issues themselves can be interconnected making it harder to create a clear hierarchy, and even more so, it depends on the understanding of those who create those hierarchies. Another point made in the second characteristic is that the lines between domestic and foreign issues are blurred stems from the first one – as states become more and more interconnected, the affect of various domestic issues and actions on other countries is growing. Lastly, it is pointed out that if there can not be a hierarchical list of issues, logically, their importance must vary and this happens, as authors state, on various levels - from governmental to interstate coalitions, depending on national, international situation and other aspects. Same ideas work in international organizations where states may form interest groups and try to negotiate themselves a better position, to reach a better agreement. Carlos Escude is one of the critics of complex interdependence, he admits that military power has been devalued in international politics, but criticises the second characteristic by saying that weak states still have a clear hierarchy of issues. According to Escude, with a problematic economic development weak states should fear the economic weapon even more than the military one19. While the latter argument can hold true, it is quite general, there are various economies and different strategies – some countries are agricultural economies, others manufacturing or third sector based, some invest on high technology and others rely on cheap labor, some work in traditional spheres while other countries seek for specialized niches. Thus, the problematic economic development can have a myriad of variations and ever changing situation also pushes states to be flexible on their agendas. On the other hand, if state‟s economy is based on one major industry, fisheries for example, it must be prioritized. It can be suggested that military issues are in most cases removed from the top of the agenda hierarchy, but it is hardly a universal law. To reach something, a state has to prioritize its goals, has to choose the spheres that need investments and development the most. It is especially true for the weaker states which do not have resources to invest in several big state-level projects at once if at all.
19 Sahni, V. Peripheric Realism versus Complex Interdependence: Analyzing Argentine and Mexican Foreign Policies since 1988. International Studies 38, 1 (2001). Sage Publications. P. 24-25. 14
The last sentence of the second characteristic is a reference to Sen. Arthur Vandenberg„s speech who in 1947 said to his colleagues in Senate that politics stops at the water„s edge, meaning that USA should not show its parliamentary disagreements outside the country because it weakens its authority20. Keohane and Nye are saying that it is becoming harder to hold this policy true because of the growing interconnectedness. With their third characteristic Nye and Keohane get back to the military question: „Military force is not used by governments toward other governments within the region, or on the issues, when complex interdependence prevails. It may, however, be important in these governments’ relations with governments outside that region, or on other issues. Military force could, for instance, be irrelevant to resolving disagreements on economic issues among members of an alliance, yet at the same time be very important for that alliance’s political and military relations with a rival bloc. For the former relationships this condition of complex interdependence would be met; for the latter, it would not“21. Admittedly, this part of their theoretical idea looks like the least important to the needs of this work, but it still raises an interesting point – it creates a level of regionality. Arctic is a region and with defined borders, albeit there is a distinction between the coastal Arctic states and non coastal ones, but generally, it can be held that they„re all in the Arctic region defined by the Arctic circle. As it is not within the reaches of the paper, there is no point to dwell on the relations between regions. But within a region, authors argue, for most countries force has become irrelevant or unimportant as an instrument of policy22. In liberal paradigm, one of the most important goals in international relations is peace and well being23. According to Edwin van de Haar, liberal states tend to link each other with common national interests creating an area or sphere of peaceful connections and maintenance of it becomes a part of political culture24. Nevertheless, as Michael W. Doyle states, the liberal thought is not inherently characterized as peaceful or constrained as such25. Military conflicts often have dramatic consequences, are costly for the states and nations thus is not a rational way of solving issues. Because of this, democratic states are in essence defensive, down to the level of a rational individual who will object war because it creates danger to
20 Lieber, R.J. Politics stops at the water‟s edge? Not recently. The Washington Post, February 10, 2014. Retrieved from: http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/02/10/politics-stops-at-the-waters-edge-not- recently/; last checked: 2015 02 15. 21 Keohane, Nye, 2011. Op. Cit. P. 21. 22 Ibid. P. 23. 23 Miller, D. ed. Liberalizmas. Politinės Minties Enciklopedija. UK: Blackwell, 1998. P. 304. 24 Haar, E. The Liberal Divide over Trade, Peace and War. International Relations, Jun 10, 2010. P. 132. Cites: Edward D. Mansfield and Jack Snyder, Electing to Fight: Why Emerging Democracies Go to War. Cambridge, MA:MIT Press, 2005. 25 Doyle, M.W. Kant, Liberal legacies, and foreign affairs. Linklater, A. red. INTERNATIONAL RELATIONS. VOLUME III. London and New York: Routledge, 2001. P. 871. 15
the peaceful order of life, to his life, to his and state„s resources26. The burden of war is always heaviest on the citizens, they cannot put this weight on someone else as monarchs or dictators or in fact, any of leaders today. Another argument is that the laissez-faire principle has a tendency towards rationalism and because of the irrationality of war, it becomes unwanted27. The growing trade, international investment and interdependence between states mean that there is less sense to reach for resources through conflict. Economic interrelations between states stimulate the creation of connections which make states interdependent, this fosters mutual understanding and in turn deter from war. The latter is also hurtful for most of businesses because it creates risk of losing business partners28. R. Cobden argues that international trade does not allow states to become too self sustaining to wage a war29. Western states have political reasons to keep an open market because it promotes liberal democratic ideas in other countries and in such way affects their policies30. As a result such states should become more stable, more inert to co-operate. According to the basic liberal theory, such connections create an international division of labor and free market, this system allows the biggest absolute gain and not participating in it should be irrational31. This interdependence creates such amounts of absolute gain that countries seek to deconstruct the state of anarchy in international relations32. Even if states are connected by the common goals and interests, an international law and order is needed, because without it no country can trust each other, a rational state will avoid such relations even if the good produced would be lesser than otherwise33. This is the reason why liberal states seek to connect each other through international law and international institutions. While these connections can be asymmetric, liberal states prefer the symmetric model which avoids the creation of hierarchy34. International organizations encourage multilateral relations between countries as countries deal with problems that affect them all and try to solve them collectively. These organizations can be looked at as multiple channels, although some of them address a wide range of issues while others are highly specialized. Naturally, the latter tend to be more focused on the subject and its issues. The Former on the other hand, most notably, the Arctic Council, covers a wide array of issues and agenda
26 Dunne, T. Liberalism, International Terrorism, and Democratic Wars. International Relations, 2009. P. 108. 27Doyle. Op. Cit. P. 883. 28 Haar. Op. Cit. P. 133. Cites: Edward D.Mansfield and Brian m. Pollins. ‚Interdependence and Conflict: An Introduction„, in Edward D. Mansfield and Brian M. Pollins (eds.), Economic Interdependence and International Donflict: New Perspectives on an Enduring Debate. Ann ARbor: University of Michigan Press, 2003. P. 1-5. 29 Haar. Op. Cit. p. 145. Cites: Grammp, The Manchester School. P. 100-5. 30 Deudney, D., Ikenberry, G.J. The nature and sources of liberal international order. Review of International Studies, 1999, Nr. 25. P. 192. 31 Doyle. Op. Cit. P. 887. 32 Deudney, Ikenberry. Op. Cit. P. 190. 33 Doyle. Op. Cit. P. 879. 34 Deudney, Ikenberry. Op. Cit. P. 182. 16
setting comes into play. Complex interdependence seems to be a fitting platform to analyze dynamics in such international organizations, because a number of countries and multiple issues result in multiple channels to solve those issues and in many different connections. Countries may balance between the issues, supporting states in those thar are not important to get their support in solving the important ones. The system encourages countries to create strong connections to ensure support from other states. The whole process can be very complex as with important issues the politics start from the agenda setting and continue till the smallest details of how to solve a specific issue. On the other hand, Buzan is criticising such order by calling it an economic threat to domestic stability, he explains that: „these occur when states pursue economic strategies based on maximization of welfare through extensive trade. Over time, such policies result in high levels of dependence on trade in order to sustain the social structures that have grown up with increasing prosperity. Some countries become specialised as raw material producers, and depend on sales of their products, while others become industrial centres, and depend both on supplies of raw materials and on markets for their products“35. He further pushes his argument pointing there is a „<...> set of complaints from Third World countries which claim that the economic system of complex interdependence locks them into a position of permanent economic disadvantage preventing them from solving the numerous problems which make them weak both as states and as powers. From their perspective, the whole system is a threat to their national security“36. Kenneth S. Rogerson seconds Buzan„s critique by adding that a state loses some of its ability to control its own activities, which means a decrease of sovereignty37. In today„s world either of the positions can be criticized, a country can benefit from free market but has to take the risk of being too dependent or lose in a competitive struggle. Buzan admits that greater self-reliance also comes with a cost of lower economic growth and need to contain that stimulae of growth inside the country38. Peter J. Katzenstein in his book „Small states in world markets“ argues that for small states free trade has no alternatives because protectionism policies raise the price of intermediate goods, these policies set a bad precedent in domestic politics and lastly that the fear of retaliation by economically stronger states inhibit protectionist instincts39.
35 Buzan. Op. Cit. P. 80-81. 36 Ibid. P. 81. 37 Rogerson, K.S. Information Interdependence: Keohane and Nye„s complex interdependence in the information age. Information, Communication & Society, 3:3. Routledge, 2010. P. 418. 38 Buzan. Op. Cit. P. 138. 39 Katzenstein, P.J. Flexible Adjustment in the Small European States. Small States in World Markets. Cornell University Press, 1985. P. 39-40. 17
After establishing the three main characteristics, Keohane and Nye present political processes of complex interdependence. They explain that since military power in complex interdependence is not the only indicator of power like it is in realism, there can be different leaders in different sets of issues, but it can only work if military force is largely immobilized and stronger states in this sense cannot use this power to affect other countries in other issues40. While stronger states create these power or influence linkages through military or economic power, weaker states use international organizations in the same manner as this method is available and inexpensive41. Rogerson notes two other concepts outlined by Keohane and Nye published in the second edition of their book Power & Interdependence, these are sensitivity, meaning how sensitive a state is to changes in other country or in the whole international system for that matter, and vulnerability – the availability and costs of alternatives for actors. The more sensitive the state is, the more it will have to adjust to the changing situation, the more vulnerable it is, the harder it will be for a state to control and find solutions to the situations it faces42. Agenda setting is affected by domestic as well as international problems, since it no longer has a clear hierarchy with military power at the top, agendas can be shifting as a result of domestic or international situation changes. International organizations are used by states as forums to broaden or narrow the agenda of interest43. The latter activities can result in international coalitions which give states even more abilities to pursue their goals44. International organizations in complex interdependence have a significant role in that they „help to set international agenda, and act as catalysts for coalition-formation and as arenas for political initiatives and linkage by weak states“45. The latter make use of the common one-state- one-vote norm and create coalitions. Even more so, a political culture of social, economic and state equity has developed over the years which creates a situation when stronger states agree with agendas pushed by weaker ones so as not to look as harsh self-interested. Weaker states also manage to link different issues for their advantage meaning they can make pressure in issues where they are stronger to reach agreements on issues where they are traditionally weaker46. Robert Keohane„s and Joseph Nye„s complex interdependence can be a useful tool to analyze such countries as Greenland, Iceland and the Faroe Islands, but there are a few things to note. The theory is too heavily connected to the military aspect. Today, even if not demilitarized, Arctic region is peaceful and it is not relevant to speak about the past and how military issue is no more at
40 Keohane, Nye, 2011. Op. Cit. P. 25. 41 Ibid. P. 26. 42 Rogerson. Op. Cit. P. 421-422. 43 Keohane, Nye, 2011. Op. Cit. 27-28. 44 Ibid. P. 28. 45 Ibid. P. 29. 46 Ibid. P. 30. 18
the top of states‟ agendas. More useful side of complex interdependence is the discussion about the interdependence itself, multiple channels of it and the peculiarities of agenda setting. Another criticism would be that the latter might not be as fluid as authors of complex interdependence suggest. Countries in the Arctic are increasingly connected by common issues and domestic issues in one country can influence other state, issues and spheres are in varying degree interrelated which has to be noted when creating agenda and it does make it a complex task and very hard to predict if at all possible, but states still need to arrange their interests in hierarchical formation as it defines their vectors of policies. While arguments that military issues are no longer at the top of agendas and that the latter are more rapidly changing in reaction to the ever changing situation are generally true, they are not absolute. States can not change their foreing policies too often or too radically if it is not justified by developments in international situation if they want to maintain their reputation, economic aspects also reduce this flexibility. To influence politics in the Arctic for their own benefit, small states like Greenland, the Faroe Islands and Iceland may work in regional international organizations to create connections and gain influence to lever agenda setting and issue solving. It is also interesting how Arctic and foreign policies of these countries are geared to reach their goals. The connections that states make are an empty shell unless there is something done using them. Therefore, through the connections, countries have opportunities to receive something, but for that, also need to give something. This is where resources and strong economy matters as it allows countries to create added value in the Arctic region in this case. In the second chapter, major spheres of economies, oil and gas exploration situation and renewable energy in Iceland, the Faroe Islands and Greenland are discussed. It is valuable to look at what directions do these countries aim for concerning these spheres and also to find the newest developments. Furthermore, these topics take up large parts of Arctic strategies and are interrelated with political international activities.
19
2. ENERGY AND ECONOMY DEVELOPMENT AND
POLICIES IN GREENLAND, ICELAND AND THE FAROE
ISLANDS
As established in the previous chapter, according to complex interdependence theory it is important for a country to create ties with other states. Economy is one of the spheres at the forefront of the globalizing world, open markets and free trade allow producers of goods to reach more customers and vice versa. Such relations create connections between states, moreover, they create a complex web of connections of various strengths and importance and since one is more and more reliant on the foreign markets, every state‟s attention to foreign policies has to grow respectively. Nevertheless, it is not always easy to distinguish between the Arctic and a domestic strategy of a country which simply happens to be in the Arctic. The assessment of trade relations, energy situations and policies of Greenland, the Faroe Islands and Iceland will not only show their own strategies, but also give a view of how these countries operate in the polar region, how the benefits and the issues of being in it are handled. Other countries that reach the Arctic like Finland, Norway, U.S., Russia or Canada all have various different policies because they are geographically bigger and belong to other regions as well, on the other hand, the analyzed countries are very closely connected to the circumpolar north. Therefore, it is hard, or even impossible in the case of Greenland, Iceland and the Faroe Islands to draw the line between the strategy which happens to be in the Arctic and one that is dedicated for the Arctic. Three broad factors that affect Greenland‟s, the Faroe Islands‟ and Iceland‟s economic, energy development and policies can be distinguished: Availability of resources Energy extraction and production of goods The Arctic Availability of resources, in other words, is what kind of goods, services and energy resources are needed and how it affects economic and energy policies. Energy sector works in creating ties between countries in a very similar way to international trade of other goods if a country is exporting its energy resources. Even more so, energy resources are critical for economies to function and some resources like oil, natural gas, metals or minerals or other resources like rare earth materials, for example, are not available for every country to produce in their territory which makes those ties even more important as the sector might be poorly diversified, the transportation
20
can be technically difficult and as a result - expensive. Therefore, foreign policy makers have to keep in mind the available market for these resources to acquire and thus have to adjust the policies accordingly. Energy extraction and production of goods allows countries to lessen the influence of foreign trade on its economy. It is believed that Arctic region should hold an estimated 30% of world‟s unexploited gas and 13% of oil, but for example Iceland assess these numbers carefully noting the fragile Arctic ecosystem, political, economic, environmental and social problems that would have to be solved47. Energy producing is beneficial for a country because it does not need to buy and transport it from another country, it can also provide profit if there is an abundance of subsoil resources to sell but it also brings challenges like, for example, extraction of oil, gas, metals or minerals is expensive, especially so offshore and in the Arctic. It also needs technology to be brought in, infrastructure to be built around it and also reliable, long-term clients to make it possible, profitable and viable. When faced with such difficulties, a country, especially which lacks capital resource, may turn heads to foreign investments which creates more ties between countries and businesses. However, these ties are two-sided. Because Iceland, Faroe Islands and Greenland are not fully capable of exploring and developing oil and gas wells and mines on their own, foreign companies have to be brought in. These are often state owned and have massive resources, which forces the host countries to be careful at balancing the interests of both sides to retain the attractiveness of exploration and development of subsoil resources and also to be profitable, controllable and beneficial for the country too. Nevertheless, the good side of it is the experience which businesses and energy structures get from working together with international companies if they get to do so. Third factor is the location – the Arctic, which somewhat changes the situation. Most resources needed are not easily obtainable, they have to be shipped or flown because all three analyzed countries are islands. It not only makes it more difficult to get needed products or services, but also expensive. Thus having good trade connections and many enough to have some flexibility is important to Greenland, the Faroe Islands and Iceland. Moreover, the integral part of most actions in the Arctic is the environment which makes every economic activity even more complicated in two aspects. One is that harsh climate conditions limit movement and work abilities and opportunities, require high-tech and highest durability equipment. The other aspect is environmental
47 A Parliamentary Resolution on Iceland's Arctic Policy. P. 3. Retrieved from: http://www.mfa.is/media/nordurlandaskrifstofa/A-Parliamentary-Resolution-on-ICE-Arctic-Policy-approved-by- Althingi.pdf; last checked: 2015 03 12. 21
concerns - melting ice not only opens economic possibilities, but also raises concerns about nature preservation and thus every action is in some way connected to the issue. Regarding some of the more important publications used in this chapter, “A Parliamentary Resolution on Iceland's Arctic Policy“, corresponding Faroese publication called “The Faroe Islands – a nation in the Arctic“ were used. While Icelandic and Faroese strategies were easily obtainable, Greenland does not seem to provide their foreign policy strategy, thus “Danish Kingdom„s Arctic strategy 2011 – 2020” had to be used, however, Greenland has a number of energy-related publications. The Faroe Islands and Greenland are not sovereign countries but still parts of the Danish Kingdom, therefore the Danish strategy is not entirely, but appropriate enough source of information. Nevertheless, the situation that there is Faroese Arctic strategy but Greenland doesn‟t have one is interesting. It could be so because the Faroe Islands are even further South than Iceland, which used a considerable part of its strategy for convincing of being Arctic, and need to establish itself as an Arctic country more intensively than Greenland. These questions are to be left for the third part of this work where political aspects of the policies of selected countries are analyzed. 2.1 Greenland Being an autonomous part of the Danish Kingdom with a home rule since 1979 and Self- Government Act since 2009, Greenland can make its own decisions on exploration, development and extraction of mineral resources in its territory, but the revenues from these activities would be shared by Greenland and Danish people48. Therefore, Greenland is interested to reduce its dependency on Denmark. On the other hand, Greenland receives around 2.8 billion DKK from the latter every year and 320 million DKK gets added to that from the European Union for fishing rights. Sustainable development and use of oil and gas or mining resources would allow to increase financial, and with it, overall independency. Denmark also has interests in the exploration of resources - to include Danish companies like Dong Energy and the possible revenues49. The Danish grant, which equals almost half of Greenland‟s domestic product50, show that if it wanted to be fully economically self sufficient, Greenland would have to find ways to boost its revenue inflow. Its
48Kingdom of Denmark Strategy for the Arctic 2011 – 2020. P. 14. Retrieved from: http://um.dk/en/~/media/UM/English-site/Documents/Politics-and-diplomacy/Greenland-and-The-Faroe- Islands/Arctic%20strategy.pdf; last checked: 2015 03 14. 49 Østhagen, A. Dimensions of Oil and Gas Development in Greenland, December 19, 2012. The Arctic Institute. Retrieved from: http://www.thearcticinstitute.org/2012/12/dimensions-of-oil-and-gas-development.html; last checked: 2015 03 17. 50 Levring, P. „Simply not realistic': Greenland abandons dream of raking in oil riches, January 12, 2015. Bloomberg. Retrieved from: http://business.financialpost.com/2015/01/12/simply-not-realistic-greenland-abandons-dream-of- raking-in-oil-riches/; last checked: 2015 03 23. 22
Government‟s strategy is to attract more foreign investment and to make exploration of natural resources a major source of revenue51. The most important way for Greenland to strengthen its economy is oil, gas and mining sectors. It is estimated that off the coast of Northeast Greenland, 31 billion barrels of oil and gas and in areas East of Canada and West of Greenland 17 billion barrels of oil and gas could be discovered. Since the country does not have resources to carry out exploration and exploitation itself, it has to sell licenses – agreements under which outside sources – foreign companies, can explore agreed territories under agreed conditions for a certain amount of time. In Greenland, licensing rounds in oil and gas sectors are held every two year since 200252. Offshore areas West of Greenland thus far has received the most interest, but on 20 December 2013, Bureau of Minerals and Petroleum of the Government of Greenland issued the first four oil and gas exploration and exploitation licenses for Eastern Greenland. The area is between the latter and Svalbard and these new territories can hide the biggest potential for oil and gas exploration, but ice conditions are extremely difficult with open water in the area for a few months only in exceptional years. The area is also the deepest gateway between the Arctic and other oceans and through which about 10% to 15% of Arctic total ice mass is transported South via the Eastern Greenland current through the Fram Strait. Because of these conditions the exploration becomes extremely difficult and very expensive to do, thus, it is not likely that oil and gas exploration developments in Greenland Sea will allow Greenland to achieve sustainable supply and revenue from these resources in the near future53. Moreover, the recent plunge of the price of oil threatens the economic feasibility of drilling offshore in the Arctic, where the break-even price is about $90 per barrel54. During the time of writing, 23 of March, 2015, prices of WTI and Brent were 46.72 and 55.56 USD/bbl.55, far lower than the break-even price. In this situation major energy companies like French GDF Suez, Norwegian Statoil and Denmark‟s Dong Energy have decided to end projects in Greenland as oil exploration there has became too expensive and risky. John Finborud, Director of GDF Suez Greenland has explained the situation:
51 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.33. 52 Ibid. P. 24. 53 Casey, K. Greenland‟s New Frontier: Oil and Gas Licenses Issued, Though Development Likely Years Off, January 20, 2014. The Arctic Institute. Retrieved from: http://www.thearcticinstitute.org/2014/01/greenlands-new-frontier-oil- and-gas.html; last checked: 2015 03 16. 54 Bennett, M. Elections in Greenland and Alaska bolster Arctic natural resource extraction, 2014 12 01. Cryopolitics, Arcitc News & Analysis. Retrieved from: http://cryopolitics.com/2014/12/01/elections-in-greenland-and-alaska-bolster- arctic-natural-resource-extraction/; last checked: 2015 02 25. 55 Energy & Oil Prices. Bloomberg. Retrieved from: http://www.bloomberg.com/energy/; checked: 2015 03 23. 23
“Given the current situation on the market together with the fact that Greenland is an area with very little infrastructure, rather large environmental requirements and a very challenging environment, it will be very expensive to develop these fields"56. Therefore, at least at the moment, Greenland has to withdraw from the Arctic oil and gas exploration. The fact that Greenland does not have (at least publicly available) Arctic strategy document or even foreign policy publication, but its energy strategy is easily available proves that it is an important sphere and that the country hoped to get fast results from oil and gas industry. Birger Poppel, research project chief from the University of Greenland, comments that although there‟s still going to be a focus on attracting oil companies, the time has come to diversify natural sources and to develop other economic fields, such as the mining industry57. It can now be said that minerals sector was the second most important way for Greenland, but because of the developments that have been discussed above, it has recently become one of the concentration points. Over the last decade mineral resources sector has grown significantly because of a long-term strategy. In 2008, Greenland adopted the Parliament Act No. 6 on Greenland‟s Mineral Resources Fund to hold oil and gas revenues for the use in the future. In 2009 a Parliament Act No. 7 on mineral resources and activities of relevance hereto was adopted and at the beginning of the following year the mineral resources sector was fully taken over by Greenland„s Government58. Hence, the latter has taken important steps: legal basis, management of revenues and full control of the sector, to soundly progress in the mining sphere. The most essential parameters for a companie‟s choice of a country to invest in mineral exploration are: geological potential and prospects for metals and minerals, mineral legislation, fiscal conditions, institutional factors and framework conditions, political stability. The goal of Greenland„s mineral strategy from 2009 „was to accumulate geological knowledge and increase specific knowledge about attractive geological environments of mineral deposits in Greenland“. This was done specifically for marketing purposes to attract investors59. To promote gemstone activity, small-scale licenses were introduced, typically granted for private collectors of gemstones60. According to mineral strategy for 2014-2018,
56 Major oil companies pull projects from Greenland, 14 Jan 2015. Retrieved from: http://rt.com/business/222447-oil- projects-end-greenland/: last checked: 2015 03 23. 57 Major oil companies pull projects from Greenland, 14 Jan 2015. Op. Cit. 58 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P. 4. 59 Greenland‟s oil and mineral strategy 2014-2018, appendices. 8 February 2014. Government of Greenland, IASN- 2013-093824. P. 59. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Raastof/ENG/Greenland%20oil%20and%20mineral%20stra tegy%202014-2018_ENG.pdf; last checked: 2015 03 20. 60 Greenland‟s oil and mineral strategy 2014-2018, our mineral resources, creating prosperity for Greenland. Government of Greenland. P. 12. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Raastof/ENG/Olie%20og%20mineralstrategi%20ENG.pdf; last checked: 2015 03 22. 24
Greenland, during this period concentrates on: iron ore and iron alloy metals as well as copper and zinc; rare earth elements, antimony, wolfram, niobium, tantalum and the platinum group; gold, uranium and gemstones61. Greenland„s Government estimates that in the strategy period three to five mines could be opened with additional offshore oil drillings62. From time to time Greenland is reminded of not having a full independency when implementing its policies. For example, there was a debate between Greenland and Denmark at the end of 2012 regarding mining projects in Greenland. The debate focused on an act on large scale projects and particularly, about foreign workforce which will be needed for large scale projects, passed by the Greenlandic Parliament in 2012. To allow foreign workers to come to Greenland, the act requires a Danish act to be passed as Greenland was still not in charge of regulating immigration to Greenland in 2012. The latter is able to take over this competency as part of the Self Rule Act, but which was still a responsibility of Denmark in 201263. Such occurrence reminds that Greenland can not create and implement its policies however it pleases and that Denmark still has control of important mechanisms of Greenland with which it is able to some extent control the economic development of Greenland. Interestingly though, as Damien Degeorges claims, it is of Greenland„s interest that Danish authorities would take their responsibilities further when it comes to foreign investments, not least on natural resources and infrastructures and would reserve themselves the right to veto a project for national security purpose which would help Greenland to avoid potential long term consequences in its raw material sector of dealing with too powerful state-owned companies. Thus the Danish experience on foreign and security issues can benefit Greenland in its state-building process64. It is therefore an interesting point for Greenland where it can choose between safety but more dependency on Denmark or freedom of action but more dangerous political pressures from international players. The mining of radioactive elements presents similar issues as discussed above. Not long ago it was not permitted in Greenland, although, since Greenland‟s Parliament session in 2013 the zero- tolerance policy towards radioactive elements has been abolished65, but if uranium is to be exported, it would have foreign, defense and national security policy implications of which Denmark is still in charge of66. On the other hand, as Damien Degeorges notices, given the value of uranium deposits
61 Greenland‟s oil and mineral strategy 2014-2018, appendices. Op. Cit. P. 61. 62 Greenland‟s oil and mineral strategy 2014-2018. Op. Cit. P. 4. 63 Degeorges, D. Denamrk, Greenland and the Arctic, Challenges and opportunities of becoming the meeting place of global powers.P. 7. Retrieved from: http://forsvaret.dk/fak/publikationer/briefs/documents/denmark-greenland-and-the- arctic.pdf; last checked: 2015 02 13. 64 Ibid. P. 8-9. 65 Greenland‟s oil and mineral strategy 2014-2018, appendices. Op. Cit. P. 64. 66 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.14. 25
in Greenland, the development of this industry could be a significant part of Greenlandic economy. However, uranium is not only a potential source of income, but clearly also a major issue for countries future. Because companies in that sector are often state-owned, Greenland would have to choose the right partner to avoid a too strong dependence that could have consequences if and when Greenland becomes independent67. Hence, the solutions would be the same as presented in the previous paragraph, but there are other provisions taken by Greenland. Preparing for the future developments, the country aims to be more active in international nuclear safety formats, it already is covered by the Treaty on the Non-Proliferation of Nuclear Weapons. Greenland/Denmark is also required to conclude safeguards agreements with the IAEA – International Atomic Energy Agency68. A working group has been established in early 2014 between Greenland and the Danish government to resolve the concerns of radioactive and rare earth mineral mining was scheduled to conclude in late 2014, but the talks have been interrupted by the change in government69. Greenland‟s active involvement in treaty and agreement signing shows that it seeks to create connections with other countries that deal with the same issues, also to be involved in the newest developments and decision making. Greenland is rich with minerals like zinc, copper, nickel, gold, diamonds and platinum group metals and substantial amounts of rare earth elements - important components in high-end technology production70. Danish strategy for the Arctic provides an assessment of critical materials and deposits in Greenland. It is explained that ‚critical„ is a material that cannot be easily substituted. The problem is that because of the demand, supply, reusability and new technology developments criticality is dynamic while it takes no less than ten years from exploration to the opening of a new mine, thus it can be impossible to follow the pace of modern technology development. From the available deposits in short term assessment, PGM 2, niobium, REE 3 and tantalum are rated as large resources. The first one of them is found in west and aast Greenland while the other three – in south Greenland. Resources that are possibly critical in a long term and rated as large resources are vanadium, titan, molybdenum and copper. The first two are found in south and east Greenland while the following – in east and north and east respectively71. With most of the resources situated in the south and only one of them in the north of Greenland, climate conditions should not be as big a problem as it is with the offshore resources. As the rare earth
67 Degeorges. Op. Cit. P. 6. 68 Greenland‟s oil and mineral strategy 2014-2018. Op. Cit. P. 15. 69 Boersma, T., Foley, K. Dark Clouds Gather over Greenland‟s Mining Ambitions, January 16, 2015. Brookings. Retrieved from: http://www.brookings.edu/blogs/planetpolicy/posts/2015/01/16-greenland-mining-boersma-foley; last checked: 2015 03 23. 70 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P. 4. 71 Ibid. P.28. 26
elements‟ demand is rising fast and China controlling more than 97% of rare earth element production, Greenland with its enormous potential is gaining strategic power. The Arctic island, according to data from 2011, may be able to supply at least 25% of the world‟s rare earth element demand in the next 50 or more years. But it may actually be more as a mine in south Greenland which was expected to be exploited for 25-30 years, may be exploited for 300 years, if not more72. On the other hand, the latest developments forces Greenland to adjust this positive view. China is already coming to Greenland by taking over a planned 2bn dollar iron ore mine73. However, the company that bought the mine, General Nice, is a privately held trading and investment conglomerate which usually works together with Chinese mainland mining companies, but has no experience in mining itself. With the iron ore prices dropping since 2012, it is unlikely that General Nice will find a partner company to invest, provide labor and engineering. Another disadvantageous development for Greenland is the drop of Chinese export quotas, because the sector has been driven by the expected shortage of export from China. Assessing these developments, the new government of Greenland has announced it would place more emphasis on developing tourism industry74. Tourism is an important part of Greenland„s economy being second only to fisheries. One of the benefits is that even very small villages can join in this activity. The land based tourism generates by far the greatest revenue but is dependent on a few markets, Danish being one of them75. Since at the time of writing the Greenlandic 2015-2018 strategy for tourism was only at the stage of finalizing and said to be presented in Danish and Greenlandic languages, the next best option was the earlier strategy. Greenland has set five priority areas for its strategy 2012-2015 in tourism sector: 1. Statistics and Documentation. There is a need to develop valid and continuous statistics collection on tourism which would show the real situation in the sphere and allow create better tourism strategies. Also there has to be better documentation of the tourists that travel to Greenland, which would allow to better know people who are interested in visiting the country and provide better services.
72 Degeorges, D. Greenland: A key for future developments in the Arctic. Arctic Forum Foundation. Retrieved from: http://eu-arctic-forum.org/publications/opinions-publications/greenland-a-key-for-future-developments-in-the-arctic/; last checked: 2015 03 20. 73 Hornby, L., Milne, R., Wilson, J. Chinese group General Nice takes over Greenland mine, January 11, 2015. Financial Times. Retrieved from: http://www.ft.com/cms/s/0/22842e82-9979-11e4-a3d7- 00144feabdc0.html#axzz3VEZAizCe; last checked: 2015 03 23. 74 Boersma, Foley. Op. Cit. 75 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P. 23-24. 27
2. Visibility. There has to be better availability of information on the internet under one website. There is a need for more quality content about Greenland which should be distributed in various media forms. 3. Accessibility. Geographical location and size of the country makes it a challenging place for tourist industry. Air travel should be increased, tax structure reviewed, seasonal tourism enhanced and combined tourism package via Iceland developed. 4. Framework conditions. Concessions for tourists should be introduced in sport fishing, trophy hunting, adventure camps and heli-skiing areas. 5. Market development. Business to business initiatives in the region should be strengthened, joint projects developed76. Greenland„s minister for finance and mining areas Andreas Uldum has said that the country should focus more on business, construction of new airports in Qaqortoq, Tasiilaq and Nuuk and to modernize and expand several other airports and overall infrastructure for tourism. As an example, Iceland is mentioned, as he said: “At the time, Iceland went to their knees, they invested in tourism, and it has been established that they now have a million tourists a year "77. Hence, tourism industry is a sphere that Greenland looks at with a hope of rising revenues. Greenland has much to offer for tourists but issues like transportation difficulties, a need for a better infrastructure and more advertising need to be solved. However, this is where Arctic appeal and Greenland‟s brand as an Arctic country has to be strengthened. Renewable energy is important resource in Greenland. Since 1993, Greenland„s Self- Government has invested around 1% GDP in hydropower and other renewable resources every year78. Government supports the work of the Centre for Arctic Technology which investigates potentials for solar heating, wind energy and better use of hydropower79. More than 50% of population is now supplied with energy from renewable resources. Greenland has five hydroelectric power plants, the newest of them started working in 2013 in Ilulissat. With four hydroelectric plants built in a decade it is clear what strategy Greenland‟s government has chosen. However, many smaller towns and settlements are still dependent on fossil fuels because transportation of electricity
76 Priority areas 2012-2015. Greenland Corporate Website. Retrieved from: http://corporate.greenland.com/en/about- visit-greenland/strategy-2015-18/; last checked: 2015 03 23. 77 Hannestad, A. Grønland skruer ned for råstofdrømmen, nu venter de barske reformer, Grønlands nye finans- og råstofminister vil satse mere på turisme og varsler en hård reformkurs, 14 january 2015. Politiken. Retrieved from: http://politiken.dk/oekonomi/dkoekonomi/ECE2510896/groenland-skruer-ned-for-raastofdroemmen-nu-venter-de- barske-reformer/; last checked: 2015 03 24. 78 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.30. 79 Renewable Energy. Climate Greenland. Retrieved from: http://climate-greenland.com/udledning-og- reduktion/vedvarende-energi.aspx; last checked: 2015 03 24. 28
creates huge losses80. Many of the activities in Arctic are carefully watched and controlled because of the sensitivity of environment, a goal to make Greenland less energy intensive is both, consistent with the tendency in other spheres and corresponds to Arctic strategies of other countries. Fishing industry is unquestionably a very important one for Greenland. Fish and shelfish constituted 88% of Greenland„s exports in 2013 which means its economy is fragile to price fluctuations81 as the demand varies from time to time, along with supply from other countries. In the Danish Arctic strategy it is written that: “The natural resources have shaped the development of Arctic fishing and hunting cultures and traditions, and the utilization of fish and marine mammals has always formed the bedrock of Arctic societies and economies. <...> The exploitation of living marine resources is one of the essential economic factors in both Greenland and the Faroe Islands“82. The citation above summarizes the relation of Greenlandic people to the marine resources which historically allowed a sustainable living in Arctic environment. With modern technology and whith the old ways of taking only what is needed being changed to profit seeking, these resources can be overused. To avoid that, in Greenland, there is a Total Allowable Catch quota of principal species based on biological advice from Greenland Institute of Natural Resources and a number of regional organizations, socio-economic concerns, commercial interests and international obligations. Greenland has fishing agreements with the Faroe Islands, EU, Russia and Norway83. Whale hunting is a difficult occupation, but one which used to be extremely resourceful. Nowadays, many environmental movements, like Greenpeace, are working to stop this traditional occupation. Albeit in Danish waters EU total ban on whale hunting rule applies, in Greenland whaling is operated according to society‟s food supply while large whale hunting is covered by IWC – International Whaling Commission84. Hence, Greenlandic people are kept with the ability to hunt smaller whales but only for their own food needs, which, on the other hand, goes along their traditional way of living. All in all, Greenland‟s current strategy concerning economy and energy has four main vectors: oil and gas industry, mining industry, fisheries and tourism, which are typical to Arctic region. Oil and gas industry can be very lucrative, but requires massive investments, successful exploration and a price of oil in world market that would make it profitable and at least at the time,
80 Hydropower, Climate Greenland. Retrieved from: http://climate-greenland.com/udledning-og- reduktion/vandkraft.aspx; lst checked: 2015 03 24. 81 Economy and Industry in Greenland. Government of Greenland. Retrieved from: http://naalakkersuisut.gl/en/About- government-of-greenland/About-Greenland/Economy-and-Industry-in-Greenland; last checked: 2015 02 22. 82 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.31. 83 Ibid. 84 Ibid. P.33. 29
the last point cannot be checked and it is unclear when or even if it will ever be. Greenland seems to have enough subsoil minerals, metals and other elements to make it an interesting direction and the country has taken steps to create stable and favorable conditions for the activity, but developments in China, which is the biggest producer in the sphere, difficult extraction techniques needed, for example, to separate rare earth elements from radioactive ones and China‟s coming to Greenland with a company which will doubtfully be active and will halt all the developments in the sector, it is unlikely that the mining industry will bring profits to Greenland any time soon. After these two unsuccessful turns, Greenland is looking at tourism industry which will not prove to be easy as a lot of work is yet to be done: development of infrastructure, distribution of information and strengthening or even creation of a tourism industry as such in Greenland. Fishing industry is the most important industry in Greenland, but being dependent on foreign markets, is not the most reliable one. There is not much attention to this industry in analyzed documents and other publications because the sphere is already developed and active, while at the time, Greenland is looking for other, alternative options which have been discussed above. Renewable energy might not get that much of attention as other sectors, but is an important one in some aspects. Greenland is quite energy intensive country because it is sparsely inhabited and energy transportation is very challenging in the Arctic. There are also a few moral points in development of renewable energy. One, there is an environmental attention to every activity in the Arctic and all Arctic countries put a lot of emphasis on it. Second point is that much of the developed world is trying to reduce on carbon emissions and the overall attention to environmental problems is heightened, Arctic and its melting ice is one of the main topics. With that in mind, it would be strange not to see Arctic countries trying to cut down on planet damaging emissions. In one sense, by trying to develop its own oil and mining industries, Greenland tries to have less connections with Denmark, but on the other hand it is active in signing various international treaties and agreements in the Arctic concerning fisheries, radioactive materials or others creating connections with other countries in the region. In other words, more economic independency from Denmark allows Greenland to gain more political independency form the country to create more connections with other players in the region. Greenland‟s energy policy and economy is also typical of the Arctic countries – oil is explored all around the Arctic because of the easier access caused by ice melting in the region; fishing is a traditional activity for probably all of Arctic nations and tourism is a perspective sphere in the polar region having spectacular views and activities to offer. As it has already been noted, from economic and energy standpoint, Greenland is in a position where it can not be as independent as it would like, being a small nation it needs to build relations and ties in the region to get the best out of cooperation.
30
2.2 Iceland Iceland has a well developed energy sector and has made it into its strong point. As it is visible from the statistics provided by the Iceland‟s National Energy Authority shown in table 2 below, geothermal is by far the most important primary energy source in Iceland, hydropower is second but is used more than three times less, oil is in the third place and coal is in the last. What it shows is that country‟s main energy resources are produced domestically making it less vulnerable to energy supply from foreign sources. Most of the geothermal energy is used for space heating – 43%, electricity generation – 40%. Iceland has 52 hydro power plants with the biggest in Fljótsdalsvirkjun - 690 MW. Thus, it is no wonder that most of the electricity in the country – 71%, is produced from hydropower85. Because of such good use of island‟s geological and hydrological energy potency, Iceland has no problem producing most of the energy the country needs. It is not only important economically, but politically as well since the country is less vulnerable to political pressure from the supplier. Table 2. Primary energy use in Iceland 1940 - 2013
Source: National Energy Authority of Iceland86 Oil and gasoline in Iceland are mainly used by cars, although aviation and domestic fishing vessels are also considerable users of these resources. It is used by foreign and other ocean vessels, equipment and industry too but their usage of oil in comparison with the firstly mentioned is very minimal87. Overall, transportation and fishing represent almost 90% of the total fuel use and about a
85 Energy statistics in Iceland, 2013. National Energy Authority. Retrieved from: http://os.is/gogn/os-onnur- rit/orkutolur_2013-enska.pdf; last checked: 2015 03 24. 86 Ibid. 87 Ibid. 31
third of countrie‟s CO2 emissions. Since Iceland does not have its own produced oil wells, all of it has to be imported which comprises 10% of total imports cost for Iceland88. Being totally dependent on external supply of these resources, Iceland does not want to miss out on the exploration of oil and gas too along with other Arctic countries. In its strategy for Arctic written in 2011, Iceland acknowledges the increased activity in the region and states that the newly created trade opportunities should not be missed89. Iceland specifies that it could „provide services in connection with future oil extraction areas in and off the coast of Northeast Greenland which are believed to have great oil resource potential. As it has already been established, Greenland has already run into some problems that hinged its oil and gas as well as minerals explorations, but more importantly, Iceland is interested in promoting its businesses in these fields which implies it has to build international connections to get its businesses working abroad. Apart from providing services for explorations in other countries, there is an interest in developing wells in Iceland‟s waters as well. Two continental shelf areas are thought to have potential for commercial oil and gas exploitation, these are east and northeast of Iceland – Dreki, and on the northern insular shelf – Gammur. A strategic Environmental Assesment for the northern part of Dreki has been completed meaning it is already possible to grant licenses for territories there90. On 4 of January 2013 two licenses have been granted, first one to Faroe Petroleum (owns 67.5% of the license), Iceland Petroleum (7.5% of the license), Petoro Iceland (Norway) (25%), and second to Valiant Petroleum (Canada) (56.25%), Icelandic Kolvetni (18.75%), Petoro Iceland (25%)91. On 22 January 2014 a third license was granted to Chinese CNOOC (60%), Eykon Energy (Norway) (15%) and Petoro Iceland (25%)92. While most of the companies are from Arctic countries, which is a great opportunity to build relations and to promote Icelandic businesses, China is actively stepping into resource exploration and possible exploitation business in the Arctic too. On 12 of December 2014 Icelandic National Energy Authority, at the request of Faroe Petroleum, Iceland Petroleum and Petoro, has relinquished the first license93. Kristinn Einarsson, Senior Adviser at Icelandic National Energy Authority, has told Natural Gas Europe (an initiative of an advisory boutique focused on the media sector) that the project was stopped because the evaluation
88 Alternative Fuels. National Energy Authority. Retrieved from: http://www.nea.is/fuel/alternative-fuels/nr/131; last checked: 2015 03 25. 89 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P.2. 90 Exploration Areas. National Energy Authority. Retrieved from: http://www.nea.is/oil-and-gas- exploration/exploration-areas/nr/84; last checked: 2015 03 24. 91 Iceland Offshore Exploration. Retrieved from: http://www.os.is/gogn/os-onnur-rit/OS-Iceland-Offshore-Exploration- v022013.pdf; last checked: 2015 03 24. 92 Orkustofnun grants a third licence in the Dreki Area, 22 January 2014. National Energy Authority. Retrieved from: http://www.nea.is/the-national-energy-authority/news/nr/1540; last checked: 2015 03 24. 93 First exclusive licence in the Dreki Area relinquished, 12 December, 2014. National Energy Authority. Retrieved from: http://www.nea.is/the-national-energy-authority/news/nr/1623; last checked: 2015 03 24. 32
of data indicated too thick lava layers in the area. She also commented that the situation is not influenced by oil prices much because the involved companies have long-term interest in hydrocarbon production which is not to start earlier than 2025-2030. Although ice is not a problem in the research areas, but long distances are, which also decreases possibilities of gas production for a couple of decades because of technical difficulties of building such long gas pipes on the ocean floor94. Fruitful explorations would allow Iceland to be completely self-sufficient energy-wise, but with the earliest results estimated only after ten years or more, Iceland‟s government can not rely on these possible revenues in future budget planing, also the international and Iceland‟s financial situation will have changed after a decade or so when the wells are expected to start working. Iceland is aware of the aforementioned arguments, hence, tries to view the problem from more than one perspective. The country is looking for alternatives to become more self-sufficient and some of the proposals are electric and hydrogen vehicles, biofuels produced utilizing waste95. Despite hydrogen powered vehicles, which seem to be a step away from the electric ones, the latter and biofuel production from waste are very potent ideas for Iceland. It already is a self-sufficient producer of environmentally clean electricity, and also, it would make use of the waste, although Iceland is quite efficient in this field too. From total waste managed in 2012 – 532 thousands of tonnes, 166 thousand tonnes were disposed as landfill and 366 thousand tonnes were recovered as energy, compost or recycled in other manner96. Wind power is also used in Iceland but is very recent as 2014 were only the first full year when large wind turbines were operated in Iceland and there are only two of these turbines, 900kW each. Nevertheless, the research showed that they reached an efficiency of 44% which is higher than the world‟s average – 28%. Due to these results a large wind farm – up to 200MW, is being planned, it would be the first major utilization of wind power in Iceland97. It is not even that necessary for the country to develop wind turbine farms to generate electricity as it already is the World‟s largest electricity producer per capita (53MWh), to compare, Norway, being in the second place, produces less than half as much – 26MWh98. In
94 Matalucci, S. Orkustofnun: Low oil prices for two years not to affect peripheral areas, 10 February 2015. Natural Gas Europe. Retrieved from: http://www.naturalgaseurope.com/iceland-oil-and-gas-barents-sea- einarsson; last checked: 2015 03 24. 95 Alternative Fuels. National Energy Authority. Retrieved from: http://www.nea.is/fuel/alternative-fuels/nr/131; last checked: 2015 03 25. 96 Waste. Statistics Iceland. Retrieved from: http://www.statice.is/?PageID=1169&src=https://rannsokn.hagstofa.is/pxen/Dialog/varval.asp?ma=UMH04102%26ti= Total+waste+managed+1995-2012%26path=../Database/land/urgangur/%26lang=1%26units=1,000%20tonnes; last checked: 2015 03 28. 97 World Class Wind Efficiency, 18 march 2015. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2015/03/; last checked: 2015 03 24. 98 World‟s Largest Electricity Producer per Capita, 4 June 2012. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2012/06/04/worlds-largest-electricity-producer-per-capita/; last checked: 2015 03 24. 33
Iceland, most of the electricity is used in aluminum industry – close to three quarters of all the electricity produced in Iceland99. Because of the hydropower plants and geothermal energy Iceland is also the top no-carbon electricity producer in Europe with 100% of its electricity produced being free from carbon emissions100. More than that, the Independent Icelandic Energy Portal claims the country is the world‟s largest hydropower country per capita, the world‟s largest geothermal energy producer per capita, but it seems it is also the world‟s largest energy consumer per capita, the reasons for that are high automobile ownership and large fleet of fishing vessels101, long heating seasons also add to that. What all of this means for Iceland is that its energy sector is already well developed and the country can invest in other spheres. There is another major project concerning electricity for Iceland – an electricity interconnector with the United Kingdom called IceLink. The idea comes primarily from the UK but is also interesting to Iceland. Having hydropower plants with large water reservoirs Iceland could provide peak-load power to UK which would also help stabilize its electricity networks, as well as make full use of the Icelandic reservoirs and their flexibility102. On January 2015, Iceland‟s Minister of Industry received a letter from UK‟s Minister of Energy and Climate Change showing interest in the project103, which shows seriousness of UK intentions. The benefits for Iceland would be the ability to sell the electricity, take charges for the use and maintenance of the power plants, also increased flexibility, but essentially, it can be argued that diversification of oil and gas resources is far more important objective for Iceland and the cable would further the efforts. Yet another thing that Iceland is leading in the world per capita is production of primary aluminium104. As said, about 75% of electricity produced in Iceland is used by this industry. The reasons why companies choose Iceland to locate their smelting factories are: competitive electricity pricing, long term contracts, developed infrastructure, political and economic stability, strategic location between Europe and North America, EEA membership, supportive government policy and
99 Iceland is the World Largest Energy Consumer (Per Capita), 17 November 2014. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2014/11/17/iceland-is-the-world-largest-energy-consumer-per-capita/; last checked: 2015 03 26. 100 EIA: Iceland Tops Europe‟s No-Carbon List, 23 September, 2014. The Independent Icelandic Eenergy Portal. Retrieved from: http://askjaenergy.org/2014/09/23/eia-iceland-tops-europes-no-carbon-list/; last checked: 2015 03 26. 101 Iceland is the World Largest Energy Consumer (Per Capita). Op. Cit. 102 IceLink Offers Flexibility Rather Than Baseload Power, 1September 2014. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2014/09/01/icelink-offers-flexibility-rather-than-baseload-power/; last checked: 2015 03 25. 103 UK Affirms Interest in IceLink Interconnector, 2 March, 2015. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2015/03/02/uk-affirms-interest-in-icelink-interconnector/; last checked: 2015 03 25. 104 Hilmarsson, T. Energy and aluminium in Iceland. Platts Aluminium Symposium, Phoenix Arizona, January 12-14, 2003. Retrieved from https://www.institutenorth.org/assets/images/uploads/files/Energy_and_aluminum_in_Iceland.pdf; last checked: 2015 03 26. 34
low corporate income tax (18%). Environmentally, it is extremely beneficial to place plants in Iceland because often aluminium industry uses coal fired electricity sources which generate nine times more CO2 than the aluminium smelters they are powering. In Iceland, on the other hand, the industry can be powered by „green‟, virtually CO2 emissions free electricity from hydropower plants105. Moreover, electricity costs for the public are decreased as an affect of increased energy consumption from large smelting industry, which minimizes peak-power fluctuations in the electricity market106. There are three aluminium smelting companies working in Iceland: Norðurál, Alcan and Alcoa107. As it is shown in the pie chart below, aluminium and ferrosilicon comprised about a quarter of Iceland‟s export in 2013, while marine products take an even more considerable part. Graphic 1. Export of goods and services by type 2013
Source: Icelandic economic Situation Overview, March 2015, Ministry of Finance and Economic Affairs108 Fisheries are an important part in Iceland„s economy. Iceland supports work under the United Nations Fish Stocks Agreement which is a framework for the cooperation between coastal States and fishing States and regional fishery organizations, as well as IMO conventions on maritime navigation and pollution prevention and work to make IMO guidelines legally binding109. Iceland‟s exclusive fishing area is 760 thousand km2 which is seven times bigger than the area of the Iceland itself. Some of the biggest fish stocks in North Atlantic are found in this area including cod, which
105 Hilmarsson. Op. Cit. 106Economical Impact. The Icelandic Association of Aliuminium Producers. Retrieved from: http://en.samal.is/hagkerfid/undirflokkur-1/nr/119; last checked: 2015 03 26. 107 Expansion Plans. The Icelandic Association of Aliuminium Producers. Retrieved from: http://en.samal.is/hagkerfid/staekkunaraform/nr/122; last checked: 2015 03 26. 108 Icelandic Economic Situation Overview, March 2015. Ministry of Finance and Economic Affairs. Retrieved from: http://eng.fjarmalaraduneyti.is/media/frettatengt2015/Iceland-Economic-Situation-Overview.pdf/; last checked: 2015 03 26. 109 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P.9. 35
is Iceland‟s most important stock110. A catch limitation system exists to avoid overuse of these stocks. The limitation is set according to Iceland‟s Marine Research Institute which carries out research on the ocean‟s commercial stocks and provides advice which is evaluated by the International Council for the Exploration of the Sea. There are also collaborations with Northeast Atlantic Fisheries Commission, Northwest Atlantic Fisheries Organization111. To keep the fishing vessels under control, catches are monitored and enforced by the Directorate of Fisheries112. Iceland has vast experience with fisheries and thus has contributed not only to fishing but manufacturing and service industries development also. Among the leading fields for Iceland are software products, electronic and digital equipment, various scales, tubs, boxes and packaging, trawl nets, trawl doors and fishing boats, safety equipment, protective clothing, processing plant designs and installation113 - a rather diverse collection of products. Iceland gets criticized for resumption of commercial whaling and for refusal to recognize the International Whaling Commission moratorium on commercial whaling. Iceland has a quota of around 370 whales per year, though in 2013, 172 whales were killed, among which 134 were Fin whales114 - an endangered species115. Iceland defends itself by stating that several countries catch whales, most of them on a much bigger scale than Iceland. The biggest whaling countries among the members of the IWC are the United States, Russia, Norway, Japan and Greenland. Iceland declared a ban on whaling for large whales around Iceland in 1915, although commercial whaling was resumed in 2006. The abundance of both common minke whales and fin whales has been confirmed by the Scientific Committees of the International Whaling Commission and the North- Atlantic Marine Mammal Commission 116. The most recent (2001) abundance estimate of common minke whales in Icelandic coastal waters is 43,600 and of fin whales for the area off west Iceland was 25,800117. Overall, Iceland has a well developed fishing industry and the fact that the country offers a wide array of products related to fishing industry only adds to the point.
110 Fisheries. The Official Gateway to Iceland. Retrieved from: http://www.iceland.is/trade-invest/fisheries/; lats checked: 2015 03 27. 111 Statement on Responsible Fisheries in Iceland. Information Centre of the Icelandic Ministry of Fisheries and Agriculture. Retrieved from: http://www.fisheries.is/management/government-policy/responsible-fisheries/; last checked: 2015 03 27. 112 Icelandic Fisheries. The Official Gateway to Iceland. Retrieved from: http://www.iceland.is/files/icelandic-fisheries- press-kit-enska-30-sept-2013.pdf; last checked: 2015 03 28 113 Ibid. 114 Whaling in Iceland. WDC. Retrieved from: http://us.whales.org/issues/whaling-in-iceland; last checked: 2015 04 02. 115 Balaenoptera physalus (Fin Whale) Status: Endangered A1d. The IUCN Red List of Threatened Species. Retrieved from: http://www.iucnredlist.org/search; last checked: 2015 04 02. 116 Overview of Iceland‟s whaling position. Ministry of Fisheries and Agriculture. Retrieved from: http://www.fisheries.is/management/government-policy/whaling/; last checked: 2015 04 02. 117 Iceland and commercial whaling. International Whaling Commission. Retrieved from: https://iwc.int/iceland; last checked: 2015 04 02. 36
Tourism is a growing industry in Iceland, the country has its tourism strategy for 2011-2020. Some of the objectives more characteristic to Iceland are: to lengthen the tourist season, reduce seasonal fluctuations, define and maintain Iceland‟s uniqueness118. Iceland has also targeted its tourist target group. The most important segment for Iceland is called affluent adventurers, while older relaxers, emerging market explorers and MICE (meetings, incentives, conferences, events – business travelers) and city breakers are also in the highest interest zone for Iceland119. It is small wonder that affluent adventures are the most important target group, because Iceland is known for its beauty of nature, thus the activities are mainly outdoors-oriented and being able to hire a guide, spend money on more expensive activities and stay for longer means bigger revenues, more employment and less environmental damage for Iceland. The answer to a question whether the targeting strategy is working for Iceland lies in the statistics - from just more than 400 thousand tourists in 2005 the numbers have risen to around 1.1 million in 2014120 making tourism industry one of the main pillars of export revenues for Iceland. Overall, the composition of Iceland‟s main exported goods and services show the vectors of its economic activity in the Arctic. Aluminium smelting and fisheries are both well established industries in Iceland both taking up more or less a quarter of countries exports each. There is not so much relation of aluminium smelting industry to the Arctic as it is to the peculiarities of Iceland itself. On the other hand, fishing is a traditional activity to most if not all Arctic nations, thus it is handled with much care and importance. There is a lot of attention to the way the fishing industry is controlled, to the international cooperation in the sphere. Fishing industry is a sensitive one overall, because it is an important part of the economy, but the balance needs to be found between profitability and sustainability. Energy-wise, Iceland is a collection of impressive numbers, a mostly self-sustained country and a producer of low or no CO2 emission energy. A few of major projects for Iceland are the development of wind farm which would add to diversification of its two most important „green‟ energy resources – hydro and geothermal power, and an IceLink electricity cable with the United Kingdom. On the other hand, having to import all of its gas and oil, it is far more of a strategic interest to Iceland to develop its own wells and the country is already licensing explorations in its waters. It is not yet clear how will these explorations turn out, because at the moment of writing
118 Tourism Strategy 2011-2020. Icelandic Tourist Board. Retreived from: http://www.ferdamalastofa.is/en/about- us/tourism-strategy-2011-2020; last checked: 2015 03 28. 119 Iceland„s target visitors. Northern Sights: the futre of tourism in Iceland. A perspective from the Boston Consulting Group, September 2013. P. 26. Retrieved from: http://www.icelandictourism.is/servlet/file/store36/item699669/version1/report%20from%20bcg%20on%20the%20futu re%20of%20tourism%20in%20iceland.pdf; last checked: 2015 03 28. 120 Icelandic Economic Situation Overview. Op. Cit. 37
they are still very recent. The interest in the oil and gas exploration activities is completely in line with the Arctic trends and therefore in Arctic strategy trends. Tourism has been one of the concentration points for Iceland for several years. A targeted group approach has yielded arguably impressive results as the country has almost a triple growth of tourists in a period from 2005 to 2014. In 2013 the tourism industry has taken up almost a third of Iceland‟s exports and with such a fast growth the proportion might grow further. Nevertheless, the answer is in having a diversified structure of revenues as too much reliance on one industry can be harmful. 2.3 The Faroe Islands The Faroe Islands is the smallest and the least populated country compared to Iceland and Greenland. Nevertheless, it is active in Arctic matters, the islands have their own Arctic strategy called “The Faroe Islands – a nation in the Arctic”, the Danish strategy for the Arctic also provides some useful information, the Faroe Islands provide publications about fisheries, whaling as these are the most important and lucrative activities for the Faroes. In their Arctic strategy, the Faroe Islands advertise their experience in maritime activities and related businesses. The latter can provide an array of services in the high north like „mechanical repairs, equipment and provisions, arrangement of crew changes, medical examinations, and training courses in areas like safety, hygiene, and the shipping of dangerous goods“. Overall, the goal for the islands is to become a maritime hub in the northern region121. Nonetheless, the country is not to miss out on the oil and gas exploration and exploitation activities in the region too. Being close to oil and gas exploration and exploitation activities, the Faroe Islands are active in the industry and have their companies working in the Arctic region in the sector. Faroese companies can provide services of supply and guard ships, air transportation and workforce, their goal is to build strong positions in providing services to Norwegian oil and gas exploration enterprises in the Arctic122. Faroese companies are already active in the Greenlandic, Norwegian and Barents seas and have good opportunities to expand their importance in the region. With growing hydrocarbon industries, good political and geographical location, through Faroese companies activities in the region and through global oil companies which are doing explorations in the Faroe Islands, the latter seek to use these opportunities to build bridges, relations with key stakeholders in the Arctic123. These connections would give experience to the Faroese workers and
121 The Faroe Islands – a nation in the Arctic. P.14. Retrieved from: http://www.government.fo/foreign-relations/the- faroe-islands-and-the-arctic/; last checked: 2015 03 13. 122 Ibid. P. 17. 123 Ibid. P. 19. 38
businesses, it would get them known and hopefully trusted to do business with in the future. Greenland is another point of interest for the Faroe Islands because of the mining, oil and gas extraction developments in the country to which Faroese businesses could contribute124, although, as it has already been established it is not likely to happen soon. In 2013 in the Faroe Islands, the most oil was used by fishing vessels - 31.5%, other users were apartments - 17.1% and SEV – the main energy supplier in the Faroe Islands – 15.6%125. With fishing industry being the most important one and the one that uses most of the oil, it is a strategic interest for the country to explore its own waters for oil and gas resources. The Faroe Islands have started to issue licenses for exploration and exploitation in year 2000126. To this day the explorations haven‟t given any profitable results, but the involved companies are active. One of the major players in the area – Danish Dong Energy has acquired 6 blocks in the Open Door license rounds in 2013127, Statoil is also active having opened and reopened some wells for drilling, but major success is yet to be found128. Nevertheless, these activities are beneficial to Faroese economy in direct ways through taxes and fees while also boosting commercial competencies and employment opportunities. To assure that Faroese society receives such benefits, companies that want to get licenses have to commit to contribute to local competency building and employment129. As with other activities in the Arctic, oil and gas exploration and exploitation has to be done with environment in mind. Oil spills are extremely dangerous to flora and fauna and the delicate Arctic bio-system obligates to be very careful not to damage it. To assure the highest safety standards, the Faroe Islands is a member of NSOAF (North Sea Offshore Authorities Forum) which is an association of Western Europe countries‟ with oil industry offshore safety authorities. The exploration activities on the Faroese shelf is geographically close to United Kingdom and Norwegian waters so the Faroese emergency preparedness institutions are working together with and thus have to be on par with those in UK and Norway130. This puts a lot of responsibility on Faroese authorities, but close cooperation can mean international help in a difficult situation and successful harmonized actions of authorities of different countries. As it is visible, one of the major aspects in oil and gas activities for the Faroes is connection building. It is evident in the goal to
124 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 19. 125 Consumption of oil in tonnes by consumer groups in 2013. Statistics Faroe Islands. Retrieved from: http://www.hagstova.fo/en/statbank/business-statistics/energy-and-construction/energy; lst checked: 2015 03 29. 126 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.25. 127 Dong Energy Seizes Six Blocks in Faroe Islands, 26 June 2013. Offshore Energy Today. Retrieved from: http://www.offshoreenergytoday.com/dong-energy-seizes-six-blocks-in-faroe-islands/; last checked: 2015 03 30. 128 No Oil at Brugdan II well (Faroe Islands), 27 June 2014. Offshore Energy Today. Retrieved from: http://www.offshoreenergytoday.com/statoil-completes-brugdan-ii-drilling-faroe-islands/; last checked: 2015 03 30. 129 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.25. 130 Ibid. P.27. 39
involve local companies to get them to work with the international ones, as well as in country‟s involvement in oil exploration related agreements and treaties. The Faroe Islands have no electricity connections with other countries meaning it has to be self sustained electricity producer. SEV – the main energy supplier in the Faroe Islands, produce energy from three resources: oil, water and wind. According to the information provided by the company, it has three thermal plants, eleven hydroelectric plants and four windmills131, which means that the country is still in part reliant on the imported oil to produce electricity and dependent on the supply and price fluctuations which makes it vulnerable in energy sector. Moreover, statistics for the Faroe Islands are grim - in 2013, the most important method of electricity production was thermal (the thermal power plants run on heavy fuel, diesel or a mixture of these two132) - 180.095MWh out of 292.534MWh, hydropower accumulated 90.594MWh and wind – 21.845MWh133. According to SEV information, the hydroelectric plants produce 40% of SEV‟s total production134, which is more or less representative of the whole country as SEV is the main , publicly owned producer. On the other hand, SEV‟s internet site provides a chart showing how much electricity is made by water, oil and wind at any given moment135 and having visited the site a number of times it becomes visible that the fluctuations between these resources are big. In 2014, thirteen 900kW wind turbines were installed, which are expected to cover 20% of Faroese electricity needs. Together with hydroelectric plants, renewable electricity should make up to 60% in Faroe Islands136. The North Atlantic Energy Network has been set up to study the technical and economic feasibility of building a network of subsea power cables between Iceland and the Faroe Islands and possibly Shetland and the offshore oil platforms in the area137. Such measures would undoubtedly help with the electricity flexibility in the Faroe Islands. The country has no electricity connections with other countries and systemic blackouts are bad for economy. To minimize this effect, Dong energy together with SEV has launched a smart grid system designed to protect against sudden
131 Percentage of wind, water and oil in energy production. SEV. Retrieved from: http://www.sev.fo/Default.aspx?ID=200; last checked: 2015 03 30. 132 Thermal Power. SEV. Retrieved from: http://www.sev.fo/Default.aspx?ID=148; last checked: 2015 03 30. 133 Electricity production by year and production. Statistics Faroe Islands. Retrieved from: http://www.hagstova.fo/en/statbank/electricity-production-hydro-wind-and-thermal-mwh-1990-2012; last checked: 2015 03 29. 134 Hydro electric power. SEV. Retrieved from: http://www.sev.fo/Default.aspx?ID=149; last checked: 2015 03 30. 135 Current production. SEV. See: http://www.sev.fo/Default.aspx?AreaID=2; last checked: 2015 03 31. 136 Challenging deployment of renewables in the North Atlantic, February 2015. Green Growth web magazine The Nordic Way. Retrieved from; http://nordicway.org/2015/02/challenging-deployment-of-renewables-in-the-north- atlantic/#.VRm69_ysUZM; last checked: 2015 03 30. 137 Ibid. 40
power failures or decreased power production138. The way that the system works is it shuts off from the grid one or possibly all three industrial companies and in this way reduces the demand when the diesel powered generators shut off for any reason139. Thus, considerable efforts are made to make the Faroe Islands more self reliant energy-wise and more efficient, though wind power and especially hydro power technologies are expensive. With successful oil explorations, the new revenues could fund the renewable energy projects as well. The Faroe Islands find a way to intertwine the fishing industry with the oil and gas one - the country expects that in the future, with growing activity in oil, gas and mining industries, the international interest in fishing industry and sub-contracting services in the region will decrease which will create an opportunity for the Faroese companies to strengthen their positions in these niches140. This scenario is well worth considering since the main business sphere in the Faroe Islands is the fishing industry and other maritime businesses. Fisheries and aquaculture represent about 95% of Faroese merchandise exports and about 20% of total GDP141. Thus it is one of the most important subjects in their version of an Arctic strategy and the country tries to follow all the international negotiations regarding the management of fisheries in the Arctic to keep up to date and ensure appropriate fishing rights to vessels in the Faroese seas142. The country is active in a number of fisheries management organizations: NAMMCO – The North Atlantic Marine Mammal Commission; NEAFC – The North East Atlantic Fisheries Commission; NAFO – The Northwest Atlantic Fisheries Organization; NASCO – The North Atlantic Salmon Conservation Organization. In the last three of them, the Faroese are active under the title ‚Denmark in respect of the Faroe Islands and Greenland„, which means Denmark acts as the formal contracting party143. Faroese fish in open seas and other waters under bilateral or multilateral agreements based on quotas and international advice from ICES (an International Council for the Exploration of the Sea, an organization that coordinates and promotes marine research in the North Atlantic, adjacent Baltic and North seas), while around the Faroe Islands there is a system of fishing days and areas which are closed or opened as required to control the amounts of catch. Faroe Islands also have
138 Faroes in smart grid first, 22 November 2012. Renewable news. Retrieved from: http://renews.biz/28171/faroes-in- smart-grid-first/; last checked: 2015 03 30. 139 Shankleman, J. Faroe Islands reveals power of 'world's first' smart grid, 22 November 2012. BusinessGreen. Retrieved from: http://www.businessgreen.com/bg/news/2226500/faroe-islands-reveals-power-of-worlds-first-smart- grid; last checked: 2015 03 30. 140 The Faroe Islands – a nation in the Arctic. Op. Cit. P.19. 141 Fisheries and Aquaculture Faroe Islands Fisheries & Aquaculture. Ministry of Fisheries and Natural Resources. P. 5. Retrieved from: http://www.industry.fo/Admin/Public/Download.aspx?file=Files%2FFiler%2FRKF%2FFO_fisheries_and_aquaculture_ final_revised.pdf; last checked: 2015 03 30. 142 The Faroe Islands – a nation in the Arctic. Op. Cit. P.4. 143 Ibid. P.22. 41
agreements with Iceland and Greenland and they both have agreements with EU, Norway and Russia144. The Faroese active interest in international fisheries organizations reveal the importance of the activity to the country, that it is aimed to be done to the highest standard. The main commercial fish stock in Faroese waters are cod, haddock, coalfish, and redfish, herring and mackerel, argentine and blue whiting145, thus there is a variety of possible species which somewhat divrsifies the business field in case of any disastrous effects on one of the species. Most of these fish are cought in the Faroe Islands„ waters, while in waters like Barents Sea, Svalbard, Canada, Greenland, the main species are cod and shrimp, which are processed on board. In the North Sea west of Britain the main species are blue whiting, mackerel, herring, Norway pout and sand eel; in Icelandic waters various demersal species are caught, as well as capelin and herring146. The catches landed in the Faroe Islands are either exported fresh or processed into fresh fillets, frozen fillets or wet salted fish, some species are processed into fish meal and oil, or feed for the fish farms147. It is crucial for Faroese to diversify their catch, the products made out of it and fishing territories as much as possible and with these three aspects there is some flexibility that allows to avoid business failures. The production part is solely dependent on the capabilities of Faroese vessels, crews and inland facilities, while variety of stock and even more so fishing territories is dependent on cooperation with other countries and this is why the Faroe Islands have to be active in international organisations, sign multilateral and bilateral agreements. The Faroe Islands have hunted large whales for commercial purposes but for a long time now only small whales are hunted non-commercially, ones not covered by the International Whaling Commission. On the other hand, the Faroe Islands see commercial sustainable whaling as their traditional right and supports other countries in this question148. This position is strengthened by the fact that the Faroe Islands‟ annual catch records for pilot and other small whales date back to 1584. The annual long term average catch of pilot whales in the Faroe Islands is around 800, but the numbers fluctuate from zero to over 1.5 thousand149. As whaling countries around the world receive a lot of criticism, the populations of whales and the sustainability of their populations is carefully monitored. It is estimated that there are around 100 thousand pilot whales around the Faroe Islands, thus with an average 800 catch every year – less than 1% of the stock, the activity is thought to be
144 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op.Cit. P.31-32. 145 The Faroese Fishing Industry. The House of Industry of Faroe Islands. Retrieved from: http://industry.fo/Default.aspx?ID=3785; last checked: 2015 03 30. 146 The Faroese Fishing Industry. The House of Industry of Faroe Islands. Op. Cit. 147 Ibid. 148 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.33. 149 Whaling in the Faroe Islands, October 2013. Retrieved from: http://www.government.fo/media/5343/whaling-in- brief-october-2013-1.pdf;l last checked: 2015 03 30. 42
sustainable150. The clash between the critical view towards whale hunting and it being traditional Faroese activity oblige the country to be even more scrupulous with involvement and implemention of international fishing laws to mainaint high standards and country‟s high profile. Fish farming is another marine activity in the Faroe Islands. The industry is comprised of six vertically integrated companies151 meaning all of the production is controlled by the Faroese companies but also creates a problem – lack of flexibility, since the structure is vertical, not horizontal, most of the companies are dependent on the ones above them. On the other hand in such small society of less than 50 thousand, the social closeness should mean these companies are well knit together and work in tandem. Aquaculture is becoming an important activity in the islands, in 2013 it accounted for 44% of total exports of fish, but the business is close to its capacity limit as further growth could mean spreading diseases and growing costs as a result152. Faroe Islands do not publicize much information about the tourism strategy of the country and the existing information is reminiscent of any other of such type. But there are interesting points made by the Faroese government, why tourst industry is important to Faroe Islands: support of the maintenance and development of better transport options; generate work and business activities; tourism helps the Faroese to be more aware of the value of their own culture and land, which strengthens the culture153. Indeed, the need to attract tourists pushes to keep the infrastructure in the best condition possible which in turn is also beneficial to the local society as they are daily users of the same roads and other infrastructure and facilities. Faroese government also has an interesting logic concerning the culture which, they say, should be strengthened by the tourism industry but usually it is the strong and interesting culture that has to lure tourists in the first place. Nonetheless, tourism does promote new businesses and cultivation of local traditions and culture. Some of the things the Faroe Islands advertise in the official tourism internet site are „The Best Sushi Outside Japan“, diving, motorcycling around the islands, birdwatch and other activities154. The way these activities and the country are represented is via short video clips. Though it is not officially stated,
150 Sustainable whaling. Whales and whaling in the Faroe Islands. Retrieved from: http://www.whaling.fo/en/sustainable/sustainable-whaling/; last checked: 2015 03 30. 151 Sustainable aquaculture. Faroe Islands Fisheries & Aquaculture. Ministry of Fisheries and Natural Resources.P. 19.Retrieved from: http://www.industry.fo/Admin/Public/Download.aspx?file=Files%2FFiler%2FRKF%2FFO_fisheries_and_aquaculture_ final_revised.pdf; last checked: 2015 03 30. 152 Rasmussen, M.H. Current Trends in the Faroese Economy. Danmarks Nationalbank Monetary Review, 3rd Quarter, 2014. Retrieved from: http://www.nationalbanken.dk/en/publications/Documents/2014/09/Current%20Trends%20in%20the%20Faroese%20E conomy_Mon3-2014.pdf; last checked: 2015 03 31. 153 Tourism Industry Policy. Ministry of Trade and Industry, Government of the Faroe Islands, Tinganes Tórshavn. P. 4. Retrieved from: http://www.government.fo/media/5391/tourismindustrypolicy.pdf; last checked: 2015 03 31. 154 The Faroe Islands. Retrieved from: http://www.visitfaroeislands.com/; last checked; 2015 03 31. 43
activities and their representation suggest that Faroe Islands aim at younger to middle age travellers who are able to spend money on activities like rock climbing, motorcycle riding and others. Businesses related to tourism are encouraged to cooperate with the help of the Faroese Tourist Board155. The latter is prepared to help municiaplities and businesses to create tourism-fitting infrastructures and establish businesses. Most of the travellers - around 80%, pass through the airport and travelling between the islands happens mainly using ferry or helicopter, these modes of transport should be further developed156 as there are 18 islands so part of the success of a tourist stay depends on the ferry departure times, fees and convenience. Interestingly, concerning expensive investements in tourist attractions like golf courses or aquariums, the foremost intent is to increase leisure activity options for the local people and secondly for the benefit of tourism157, which shows that tourism is not held as a very serious and important activity by the local people. The Tourist Board, along with respective authorities in Greenland and Iceland, is a part of the co-operative initiative - Vestnorden Tourist Board. The Faroe Islands signed an agreement with Iceland establishing the association – FITUR. The latter offers a variety of possibilities for development and cooperation between Faroese and Icelandic companies, financial support for exchanges between the countries. There is a similar association between Iceland and Greenland called SAMIK158. These associations, on the other hand, are relatively cooperative constructs because their common goal is to attract tourists to the region and it might go as far as creation of joint plans or offerings for tourists but basically the goal of every country is to attract tourist capital and this is where the cooperation stops. All in all, the Faroe Islands are very active in promoting their businesses in the Arctic, the goal is to become a maritime hub in the region. Oil and gas exploration and exploitation in the Arctic is seen as a possibility for various Faroese businesses from transportation to training courses and mechanical repairs. Faroe Islands are also issuing licenses for oil exploration in its own waters but there have been no profit promising results yet. This is unfortunate because a part of the electricity made in the islands is created by burning diesel and heavy fuels. Nevertheless, the national electricity producer – SEV has reduced the oil-made electricity percentage by spreading their wind power capabilities and renewables are said to make up to 60% of electricity in the Faroe Islands. Another notable achievement is the introduction of smart-grid system – first one in the world, which prevents the electricity grid from blackouts costing money, and since the country has
155 Tourism Industry Policy. Op. Cit. P. 5. 156 Ibid. P. 10-11. 157 Ibid. P. 13. 158 Ibid. P. 14. 44
no electricity connections with other countries, the technology is important. The usage of renewable, CO2 non or nearly non emitting electricity production technologies not only relieves the Faroe Islands and also Greenland and Iceland from the ties with suppliers which are not necessarily welcome, but also is beneficial politically as it adds prestige in international arena, builds a profile of an efficient, energy and environment saving country. One of the reasons why good results in drillings for oil would be strategically important for the country is because around a third of the oil consumption in Faroe Islands go to fishing vessels. This makes fishing business sensitive to the change in oil prices, but more importantly – availability. Fishing industry comprises of 95% Faroese merchandise exports and is by far the most important business in the islands. The activity is diversified in that the vessels can fish not only in Faroese waters, there is a variety of different fish stocks which allows fishers to switch if one of the species is banned from fishing, the variety of products made by Faroese also gives flexibility in business. To ensure all these benefits, the Faroese government has a variety of agreements made and the country or its institutions belong to various international fishing organizations in the region. Aquaculture has gained importance and now represents 44% of all fish exports, but the farming is close to the limits because of natural reasons – fish diseases. Strategy-wise, there is not much information to be gathered about tourism industry in the Faroe Islands. Although there are proposals for example on how to better prepare the country‟s infrastructure for tourism but there is also a line of thought that tourism does not come first before the local community. The Faroese economy is heavily based on fishing industry and the state is active in related businesses as well. It shows a lot of interest in oil and gas exploration in the region regarding its own wells and also supporting businesses, but the major breakthrough – successful exploration in its own waters is yet to be seen. Tourism industry is not looked at as seriously, as for example in Iceland. Nevertheless, the economy of Faroe Islands is practically based on connection building as the country has little resources of its own, but the country also very actively promotes Faroese businesses, thus connection building is important. 2.4 Comparison of Greenland’s, Iceland’s and the Faroe Islands’ energy and economy development and policies Having analyzed Greenland‟s, Iceland‟s and the Faroe Islands‟ situation and developments in energy, fishing and tourism sectors, their prospects in these sectors can be compared. Not accidentally, these spheres where chosen because: 1) energy sector is important to every country; 2) subsoil energy explorations are active topic in the Arctic; 3) renewable resources provide energy and adds to the environmental cause; 4) fishing industries are important in all selected countries and 45
is a part of Arctic culture; 5) tourism industry is more or less growing in Greenland, Iceland and the Faroe Islands. It is therefore interesting to see how these countries compare in their current situations in these spheres, what is prioritized in their energy and economy policies and what is relatively forgotten. In oil and gas sector all three countries are essentially at the same situation but there are some differences in the strategies and positions. All three countries grant licenses to explore for subsoil resources in their waters, but companies meet with different problems. In Greenland the progress is hinged by frozen seas and challenging environment overall, little infrastructure, large environmental requirements. Iceland meets with problems like too thick lava layers, but major problem is long distances that raise costs, on the other hand, waters are free from ice in the exploration zones. Faroe Islands, however, do not seem to have these problems but had no success in drillings thus far like the former two countries. The difficult exploration situation for Greenland is also caused by a price problem as the break-even price is said to be around 90 USD per barrel and current prices are almost twice lower which makes it an unprofitable business. Interestingly, companies doing explorations in Iceland have different position towards the same problem. Their argument is that these are long term projects and current oil price fluctuations do not concern them as the production would not start until 2025-2030. In Faroese waters, even if results do not encourage the exploration, the companies are quite active, one of the possible reasons could be that the Faroese exploration territories are close to Norway‟s which is an established oil producer. The importance of the successful explorations would be appreciated by any of the selected countries, but the most hopes were put up by Greenland as it would mean less economic dependence on Denmark and as a result more freedom of movement in Arctic politics. Hopes for successful explorations are far less stressed in the Faroe Islands and Iceland. The latter is an independent country with a remarkably strong renewable energy sector, high technology industry and stable economy. The Faroe Islands, like Greenland, are still dependent on Denmark politically and receive grants from it, but it does not seem that Faroe Islands have aspirations of becoming fully independent and are more concentrated in their main business – fishing, success in explorations would undoubtedly be beneficial, but the country does not give it such vital importance as Greenland does. However it may be, Greenland, at least at the moment, has to forget these hopes as the explorations haven‟t been successful yet and the mentioned conditions makes it an unattractive place for companies to work in. Iceland and the Faroe Islands promote their services in connection with oil exploration and extraction. These countries emphasize the potential for their businesses in Greenland while the Faroes, being geographically close, also aim to strengthen its cooperation with Norwegian
46
exploration enterprises, overall, Faroese are the most concentrated in connection building in the Arctic region and mention it often in analyzed publications. The country goes as far as setting itself a goal to become maritime hub in the northern region. Greenland, on the other hand, maybe for a lack of its own Arctic strategy, is the least active in promoting its businesses that could work with oil exploration companies regionally and concentrate on businesses and activities inside the country. Positions towards licenses differ slightly between countries in so that the Faroe Islands require companies to commit to contribute to local competency building and employment to be able to get the license while Iceland and Greenland do not discuss such requirements. Indeed, the Faroe Islands aim to get every benefit possible from the presence of international companies in the country. According to Greenland‟s oil and mineral strategy 2014-2018, from license holder‟s oil and gas profits, both the Faroe Islands and Greenland, take a share of practically the same percentage – 52.6% and 52.5% accordingly. If compared to oil extracting countries‟ tax share, Greenland and the Faroe Islands take fourth and fifth place just below New Zeeland with 47.6% Government share, Canada – 48.8% and Australia - 50.5% government share while the last two countries in the list are Norway with 77.7% and Kazakhstan with 88.8%159 to compare. Unfortunately, Iceland was not included in the calculations and only the corporate tax of Iceland can be compared which is 20%160, only comparable to new Zeeland‟s 20.5% while Greenland charges 26.1% and the Faroe Islands – 25.9%161. Even if the tax rates are more advantageous in one country than another, in the situation of Greenland, Iceland and the Faroe Islands it would only matter if the drillings would be successful. More importantly, some of the lowest tax rates show the interest in oil well development, on the other hand with such difficult conditions, they have to be low to attract companies. Greenland also has its minerals strategy since from 2010 it is in full control of these resources in the country. Greenland‟s wish to cash in on mineral mining is noticeable in their minerals strategy for 2014-2018 where Greenland is said to be concentrating on various aforementioned metals, rare earth elements, uranium and gemstones, basically, naming every element there is to be found worthy of exploitation in its subsoil without any prioritization. Greenland‟s government expects to open three to five mines in the period of the strategy. Rare earth elements needed in
159 Greenland‟s oil and mineral strategy 2014-2018, appendices. Op. Cit. P. 39. 160 Taxation of hydrocarbon extraction in Iceland. Iceland Offshore Exploration. National Energy Authority. P. 11. Retrieved from: http://www.os.is/gogn/os-onnur-rit/OS-Iceland-Offshore-Exploration-v022013.pdf; last checked: 2015 03 24. 161 Greenland‟s oil and mineral strategy 2014-2018, appendices. Op. Cit. P. 39. 47
modern technologies were of a special interest for a moment since China dominates in this sphere, but since the latter abolished its export quotas and with mines developed in other parts of the world, Greenland‟s resources partly lost their interest. Another problem is that China has already bought one of the iron ore mines but the company that bought it is unlikely to invest in its development. Moreover, most of the rare earth elements are found together with radioactive elements and their separation is expensive. If Greenland would plan to export uranium, it would involve Denmark because of security implications. This is a positive thing from the national stability point of view, but a negative one from the point of Greenland‟s aim of becoming independent from Denmark. Important point is that Greenland can not do these mining developments on its own and with no foreign investments, currently it is not the way for the country to strengthen its economy. The Faroe Islands and Iceland go only as far as to promote their businesses for mining industry in Greenland. All three countries put considerable efforts to develop their electricity production from renewable resources. Greenland has invested 1% of its GDP to this cause since 1993 and the result is that more than half of population is supplied with energy from renewable resources. Greenland has five hydroelectric power plants and four of them have been built in a decade recently. This is the main renewable source of electricity for Greenland, on the other hand, the Faroe Islands which are incomparably smaller but with more or less the same size of population of around 50 thousand, have far more - eleven hydro power plants and Iceland has fifty two. The problem that Greenland meets is long distances in cold environment which makes transportation of electricity extremely ineffective so some smaller villages are still dependent on fossil fuels. The Faroe Islands are also still dependent on fossil fuels as in 2013 about 60% of electricity was made by thermal plants using diesel and heavy fuels. However, with thirteen 900kW wind turbines built in 2014, the Faroe Islands now have seventeen wind turbines. This recent development should change the situation as because of these new wind turbines, the share of energy from renewable resources is now expected to be 60%. Iceland, in comparison, makes 72% of its electricity only from hydropower and more than three times more power is made from geothermal resources, most of which is used for space heating. Wind turbines are at early stages of use in Iceland, but since the tested efficiency reached 44%, higher than the world‟s average – 28%, there are plans to build a 200MW wind turbine farm. It would even further strengthen the position of renewable energy in Iceland albeit it is already the world‟s largest per capita: electricity, hydropower and geothermal energy producer. The Faroe Islands are also looking into building a subsea electricity cable between Iceland and possibly Shetland. There is also a plan of electricity interconnector between Iceland and United
48
Kingdom called IceLink. An idea to connect Greenland with Iceland is also present in the media162, but is far less discussed because of massive investments needed and large distance, and logically, it would be the last connection following the line from Europe to Greenland. Hydropower is the most popular renewable resource in all three countries while wind turbines are only used in Greenland‟s south, Iceland has just started using them commercially last year and the Faroe Islands most actively propagate this source of energy. Geothermal energy is widely used in Iceland while the Faroe Islands have just discovered this resource in the country and are still analyzing the perspectives163. It seems Greenland is not yet using this resource. What the renewable resources give these three countries is more freedom from being dependent from the supplier which is not a positive connection. Being small countries with small populations, especially Greenland and the Faroe Islands, with renewable resources can concentrate their power from negotiations on cheaper import of fuels to other spheres. Fishing is a traditional activity in all three countries and in all Arctic region. Fish and shelfish industry comprises around 88% of Greenland‟s exports, fish and aquaculture industry in the Faroe Islands represent about 95% of their exports, in Iceland, the industry is far less significant with 27% share of exports. Greenland and the Faroe Islands have fishing agreements with EU, Russia and Norway and the Faroe Islands is also in agreement with Iceland. All three countries seem to be very active in international treaties, agreements and organizations regarding the fishing industry. Whaling is a common activity in all three countries. In Greenland it is operated according to society‟s food supply, but the Faroe Islands are more active in support of commercial whaling, as well as Iceland. If compared, the Faroe Islands catch more than twice as more whales as Iceland. On the other hand the Faroese catch pilot whales, the population of which is around 100 thousand and Iceland mainly hunts fin whales and their population is almost four times smaller than the pilot whale‟s and the former is an endangered species. Iceland is also active in other businesses that connect to fisheries, it, for example, produces a variety of products from boats and clothing to processing plant designs and digital equipment. The Faroe Islands are active in overall maritime activities offering services from transportation to training courses and mechanical repairs. The country concentrates on catching various species so that if some of them get to threatening low levels, the fishers could switch, also the product line is
162 Iceland and Greenland as Strategic Energy Storage for Peak Load Demand, 14 August 2014. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2014/08/14/greenaland-and-iceland-as-strategic-energy- storage-for-peak-load-demand/; last checked: 2015 04 02. 163 Geothermal hopes in the Faroes, 14 July 2014. Nora region trends. Retrieved from: http://www.noraregiontrends.org/energy/energynews_single/article/geothermal-hopes-in-the-faroes/193/; last checked: 2015 04 02. 49
diversified with various products from fresh fish to fish food. Aquaculture is a sphere that has gained importance in the Faroe Islands, comprising 44% of total fish exports, though such trends are not visible in Greenland or Iceland. Obviously, aquaculture or production of merchandises related to fishing could be found in all three countries at some scale, but it is notable that while Iceland concentrates on modern fishing and its technology, it is far more of a crucial business for Greenland and the Faroe Islands which concentrates on the diversification of fishing territories, species and production. Tourism sector is in varied positions in the Faroe Islands, Greenland and Iceland. In Greenland‟s economy tourism is second only to fisheries, but the country is dependent on very few markets including Danish. It is an important industry to Iceland as it comprises almost a third of country‟s exports. There are five priority areas in Greenland‟s tourism strategy, but they actually fit to all three countries. These are: 1) collection of statistics and documentation, 2) visibility of information, 3) accessibility of the country, 4) framework conditions for tourists, 5) market development. Greenland aims to construct new airports, modernize and expand older ones and develop overall infrastructure which also is true for the Faroe Islands. Although, the latter have a bit different view towards tourism industry: the industry helps to maintain and develop better transport options, generates work and business opportunities, nourish Faroese culture. Thus, the focus point, really, is not the goal to attract more tourists by creating better infrastructure for them, but the local people which benefit from the tourism industry in the said ways. It is stated in country‟s tourism industry policy that concerning expensive investments in tourist attractions, the foremost intent is to increase leisure activity options for the local people and secondly for the benefit of tourism. An explanation for such position can be that the document is written for the local Faroese people to encourage them to involve in tourism business. Iceland accentuates the aim to prolong the tourist season, reduce seasonal fluctuations. One defining difference of Iceland‟s strategy is that the country has its tourist target group. The most important group is called affluent adventurers, essentially, those younger and middle age people who enjoy outdoors activities and will spend money on more expensive activities and will stay for longer, for a country this also means bigger revenues with less tourists and less damage to the environment. It goes without saying, such tourists are welcome in any country, but Iceland is the only country among the analyzed which defined its target group, and the strategy is working for Iceland since from 2005 to 2014 numbers of tourists grew from 400 thousand to 1.1 million. The Faroe Islands have no official focus on any group. In fact, in Faroese tourism industry policy the position is rather to be attractive to everyone, but what can be derived from the official internet site for tourists is that the Faroe Islands are also focusing at a similar target group as Iceland does, this shows in advertising of activities like rock climbing,
50
motorbike riding and such. However, it doesn‟t look like the Faroe Islands give tourism industry much importance and that local people would be too much enthusiastic about it. For Greenland, tourism industry is a major interest and an expected source of rising revenues. Greenland takes Iceland for an example of a creation of successful tourism industry. Greenland, Iceland and the Faroe Islands show different patterns of agenda setting in their economies and energy strategies. Iceland is the most stable in this sense and has a long term approach since country has well developed energy sector and invests in new developments like wind turbines in the country, it also has far more diversified export sector and does not rely only on one resource. Economy of the Faroe Islands heavily relies on fishing industry although it is well diversified and energy-wise the line of oil exploration and development of renewable resource- made electricity is kept. Greenland, on the other hand shows an ever changing energy strategy. When the hopes for fast revenues from oil wells were denied, country turned to the mining sector which was also unsuccessful in providing profits fast, the latest turn is to tourism industry and it is yet to be seen how it goes for Greenland. Greenland and the Faroe islands are noted as important trade partners for Iceland and get more attention in the strategy than other Arctic countries. From the economy and energy perspective, a growing trade with Greenland; contracting Icelandic businesses working in Greenland; the Hoyvik Free Trade Agreement with the Faroe Islands, most extensive one ever made by Iceland are mentioned. In the policy it is specified that „the agreement applies to trade in goods and services, movement of persons and right of residence, movement of capital and investment, competition, state aid and public procurement. An agreement between Iceland and the Faroe Islands on fisheries within their respective exclusive economic zones is also in effect“164. It is hard to measure the importance of Iceland and the Faroe Islands to Greenland, mostly because of lacking Arctic strategy. In all Greenland‟s energy and economy publications the concentration is rather on country‟s own resources and activities. The Faroe Islands give some attention to its neighbors Iceland and Greenland in its Arctic strategy, but the position is more of a catch-all party, the Faroe Islands are willing to use every economic and business opportunity there is. As it was seen in table 1 in the first chapter, none of the countries actually get to be between the few first most important export or import partners except Iceland which is the fourth biggest import partner for the Faroe Islands. Nonetheless, the political connection and tie building is visible through the agreements and statements showing that countries seek to create more open conditions, more interconnected markets for their businesses to work in.
164 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P.8. 51
3. POLITICS OF GREENLAND, THE FAROE ISLANDS AND
ICELAND IN THE ARCTIC
In this chapter political aspects of Arctic policies of Greenland, Iceland and the Faroe Islands are analyzed meaning that foreign strategies, international cooperation, international organizations and law are the focus points. These are the multiple channels that states use to create valuable connections, to be visible in international arena and to make influence in agenda setting in organizations. With the political culture today when strongest states go along with the agenda proposals of weaker ones avoiding to look self-centered, the cooperation, connection and coalition building strategy is a viable option for states like Iceland, the Faroe Islands and Greenland. Especially so keeping in mind their economies produce far less GDP than their far bigger and stronger neighbor states in the Arctic and their domestic markets are really small with populations ranging from around 50 to 320 thousand meaning open international markets are vital for their economies to grow. Another few points established in the previous chapter and important here are: 1) oil exploration has proven to be commercially unsuccessful in all three countries yet, meaning there‟s no substantial inflow of revenues which would change states‟ capabilities economically and could boost their influence in the region politically; 2) all three countries are taking measures to strengthen their renewable energy sector to lessen the influence and vulnerability from the supply of oil based or hard fuels which can be held as an undesirable tie or connection for Greenland, Iceland and the Faroe Islands, it also helps with international prestige; 3) Greenland and the Faroe Islands are heavily dependent on fishing industry in export (around 88% and 95% of exports accordingly) and are established as active countries in this sphere in international organizations and in creation of fishing laws, this can also be said about Iceland although fishing industry only represents around a quarter of its exports. In this sense the Faroe Islands, Greenland and at some extent Iceland are vulnerable economically which requires them to be active to hold their major markets but also to expand the less important ones to diversify exports. One of the major spheres to do so is tourism, mostly so for Iceland and Greenland while not so much for the Faroe Islands. The bottom line is that at the moment their economies are vulnerable and dependent on foreign markets which require them to be active internationally to strengthen their positions. All of it is aggravated by the fact that the analyzed countries are situated in the sub-Arctic meaning resources are needed to create and maintain living conditions. Arctic is also a place with a delicate natural flora and fauna system which obliges countries to do everything with environment in mind often making it more expensive.
52
These are challenges that Iceland, Greenland and the Faroe Islands are facing and that affect their policies in the Arctic. 3.1 Greenland Greenland has taken various measures to strengthen its economy and energy sector to become more self-sustaining and more independent from Denmark. Logically, the latter line should be followed in their foreign policies. However, it is not that simple because of a few reasons. The Self- Government was established in 2009 June 21165 and it can be not enough time for a country with such a small population to build its competence in the field and to optimize the workflow. Another problem is that Greenland„s foreign policy is regulated by Danish constitution along with Self- Government Act and practice166 meaning the foreign affairs department does not have full independency which makes it to constantly negotiate its activities with Danish institutions. Excluding the common Denmark - Greenland - Faroe Islands strategy for the Arctic there is almost no information provided about the sphere in English and the texts in Danish can also be criticized for lack of information provided. A common draft Arctic strategy of Greenland and Denmark has been publicized in Danish in 2008. Since the draft was written before the establishment of the Self-Government, it can give a perspective on how Greenland‟s foreign policy position has changed since then. However, when analyzing this draft as well as the Kingdom of Denmark Arctic Strategy for 2011-2020 it has to be kept in mind that it is unlikely to find very clear aspects of Greenlandic strategy, since in the first case it was written when there was no separate Greenlandic government and in the second case it is a common strategy where the Danish position is prevalent. The addressed areas in the document draft are: 1) home rule; 2) Sovereignty Assertiveness; 3) Arctic and Nordic cooperation; 4) Indigenous people in the Arctic; 5) Energy and Minerals; 6) Protection and sustainable use of nature; 7) Weather, climate, nature and environment; 8) Research; 9) Infrastructure; 10) Trade and Business; 11) Joint Committee cooperation with the United States; 12) Cultural cooperation in the Arctic; 13) Greenland higher education. The work has two objectives: to support and strengthen the development of Greenland toward increased autonomy, and to maintain the National Community‟s position as a major player in the Arctic.167 Among the
165 The Naalakkersuisut foreign and security policy competence. Government of Greenland. Retrieved from: http://naalakkersuisut.gl/en/Naalakkersuisut/Departments/Udenrigsdirektoratet/Naalakkersuisuts-udenrigspolitiske- kompetencer; last checked; 2015 04 24. 166 Ibid. 167 Fælles arktisk strategi mellem Hjemmestyret og Rigsmyndighederne. Government of Greenland. Retrieved from: http://dk.vintage.nanoq.gl/Emner/Landsstyre/Departementer/Landsstyreformandens%20Departement_2013/Udenrigsdir ektoratet/Selvstyrets_Udenrigspolitiske_Kompetencer/~/media/DA23A81EB8214C318579C40869BB2132.ashx; last checked: 2015 04 23. 53
more usual topics in the Arctic as energy, minerals, protection of environment, there are a few that are sometimes neglected by other Arctic countries – indigenous people and cultural cooperation. The latter is basically more important to the former than to the largest Arctic states which focus on sea territories, mining and oil wells – activities that give profit, however, the indigenous people themselves, while given representation in the Arctic Council, are somewhat less important to such states like USA or Russia. To Greenland, on the other hand, the question of indigenous people is important as it is a country of the latter. Thus, in its draft of Arctic strategy, Greenland emphasizes its own sovereignty issues, environment, energy, economy and also indigenous people. Greenland„s political system is parliamentary with a 31 member unicameral legislative body called the Inatsisartut. The Prime Minister is selected by the parliament168. Beside nine ministries, Greenland has its Department of Foreign Affairs. While the Danish Government continues to hold the competence regarding foreign policies, the Naalakkersuisut – the Government of Greenland has the competence within areas concerning Greenland and responsibilities taken with the Self-Rule Act. Naalakkersuisut continuously forwards reports and information about foreign policy topics relevant to Greenland for discussion to the Inatsisartut (its parliament) Foreign and Security Policy Committee169. In hometaken areas Greenland can join international organizations where Denmark is not a member or other political units than states are allowed to participate. The Danish Government notifies the Self-Rule Government of international negotiations which are important to Greenland if an area is not yet taken by the Naalakkersuisut170. One of the areas that Department of Foreign Affairs is responsible for is Arctic Cooperation and most dominant in the area is Greenland's work within the Arctic Council (AC). In the Greenland Government„s internet site there is very little said about Arctic Cooperation, only very general information is given, for example, it is said that in the Arctic Council‟s six working groups, Greenland participates in the most relevant ones and apart from the involvement in the AC, Greenland cooperates closely with other Arctic states on a bilateral level171. These statements do not give almost any information at all, because, critically, every country is involved in some kind of bilateral cooperation and we can only understand that Greenland is not participating in every AC working groups, but which ones of them are relevant, and relevant to whom, to the Arctic region or Greenland. If there is, even a very basic, policy for
168 Coleman Y.D., Editor in Chief. Appendix: Greenland. Denmark, Countrywatch Review, 2014 Edition. P. 88. Retrieved from: http://www.privatnurse.com/index_htm_files/Denmark2014.pdf; last checked: 2015 04 19. 169 The Naalakkersuisut foreign and security policy competence. Op. Cit. 170 The Legal Frameworks. Naalakkersuisut, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/en/Naalakkersuisut/Departments/Udenrigsdirektoratet/Naalakkersuisuts-udenrigspolitiske- kompetencer/De-juridiske-rammer; last checked: 2015 04 20. 171 Areas of responsibility. Naalakkersuisut, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/en/Naalakkersuisut/Departments/Udenrigsdirektoratet/Om- Udenrigsdirektoratet/Ansvarsomraader; last checked: 2015 04 21. 54
cooperation in the Nordic Council and the West Nordic Council, there is no such policy for Arctic Cooperation provided. In Nordic policy it is stated that Greenlandic Government understands its responsibilities and will use the cooperation to promote its interests internationally172 which is a general rule for Greenland visible in all analyzed documents and publications. The most easily accessible document in Greenland‟s Arctic policy analysis was Kingdom‟s of Denmark strategy for the Arctic for 2011 – 2020 which covers Denmark, the Faroe Islands and Greenland. On the other hand, as it was already noted, the Danish position tends to dominate which has to be kept in mind. In this publication, Greenland‟s active work on indigenous people„s rights are also expressed. Together with Denmark it established a Permanent Forum on Indigenous Issues in the UN in 2002. The two countries have also participated in negotiations on the UN Declaration on the Rights of Indigenous Peoples which was adopted in 2007. The latter should promote the preservation of indigenous people and their ways of life173. In the Danish Arctic strategy it is written that for Greenland, as well as Denmark and the Faroe Islands, Arctic Council is the most important forum in the Arctic, an idea of the Council as a decision-making body exerting influence on nation states and international bodies is promoted. Denmark together with Greenland also take part in Arctic 5 cooperation, thus the latter format is also supported, arguing it is a format primarily for issues relevant to the five coastal states (Denmark/Greenland, Canada, Russia, Norway, U.S.) like, for example, the continental shelf issue174. Therefore, the basic positions expressed in the draft strategy are also apparent in the final one. Greenland is also active in the Arctic through such organizations as Nordic Atlantic Cooperation (NORA) together with the Faroe Islands, Iceland and coastal Norway; West Nordic Cooperation together with Iceland and the Faroe Islands and in sector organizations as the NAMMCO – North Atlantic Marine Mammal Commission with Iceland, Norway and the Faroe Islands175 so with the addition of coastal Norway, the three smallest countries in the Arctic are actively cooperating in the region. There is also a joint committee cooperation between Greenland, Denmark and USA aimed to “strengthen and promote economic and technical cooperation between the latter and Greenland with special focus on research, health, technology, education, culture and tourism“176, notably, this is where the Danish support for the Greenlanders in international relations is needed because otherwise the political weight difference would be difficult for Greenland to balance out.
172 Nordic Cooperation. Naalakkersuisut, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/en/Naalakkersuisut/Departments/Udenrigsdirektoratet/Nordisk-Samarbejde; last checked: 2015 04 21. 173 Kingdom of Denmark Strategy for the Arctic 2011 – 2020. Op. Cit. P.51. 174 Ibid. P.52. 175 Ibid. P.53. 176 ibid. P.55. 55
After the elections in 2014, three parties have made a coalition agreement with foreign policy as one of the spheres in it. Goals for Greenland provided in the text are to initiate negotiations with Denmark to strengthen Greenland‟s position in international negotiations; full report on and new round of negotiations for Pituffik need to be started; to strengthen cooperation with EU within spheres of business, industry, energy, trade and mineral resources; diplomatic relations with closest neighbors and strategic partners are important; coalition must regain responsibility for the aliens area; before 2018 Greenland must take over responsibility for the aviation area; the country must protect its waters; stricter requirements for navigation in Greenlandic waters have to be ensured177. When analyzing these objectives, quite a few unclear parts are visible and at least the part on foreign policy in the coalition agreement is very abstract, but there are interesting and notable things to be found. Among these eight objectives, there are none that would be directed towards the Arctic region as such, but interest in closer cooperation with the closest neighbors, which are Arctic states, is shown. Among the topics prevalent in Arctic, energy, mineral resources and waters, most likely in connection with fisheries and environmental protection, are mentioned. The first objective does not appear to be very clear as it is difficult to tell whether Greenland seeks to do international negotiations together with Denmark for their common position to be stronger or, which I believe is more likely, they seek to negotiate with Denmark to get themselves a wider scope of rights in international relations as the powers in this sphere are still shared with Denmark. Nevertheless, the sentence is not entirely clear, readers should not have to guess the country‟s position. There are other two things mentioned which require some specific knowledge to understand – Pituffik and aliens area. The former was an Inuit settlement in northwest part of Greenland where USA air base was built in 1951-1952178. For the base to be built, local people had to be moved and furthermore, in 1968 one of the American bombers with nuclear weapons crashed near Thule (another name for the Pituffik area) which attracted attention and concern of Greenlandic people. As a result Greenland seeks to strengthen its position in USA – Denmark – Greenland negotiations concerning the airfield179. However, it is very unclear what was meant with „aliens‟ area. A quick search on the internet gave only dubious results, such as of findings of 85 km long orange structure in the middle
177 Foreign policy. Coalition Agreement 2014-2018, Nuuk, 4 December 2014. P. 19-20. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Naalakkersuisut/DK/Koalitionsaftaler/Koalitionsaftale %202014-2018%20engelsk.pdf; last checked: 2015 04 21. 178 Thule Air Base. Encyclopedia Britannica. Retrieved from: http://www.britannica.com/EBchecked/topic/173672/Thule-Air-Base; last checked: 2015 04 21. 179 Archer, C. Greenland, US Bases and Missile Defence/ New Two-Level Negotiations? Cooperation and Conflict: Journal of the Nordic International Studies Association Vol. 38(2): 125–147. SAGE Publications. P. 132, 141. 56
of Greenland guessed to be of an alien nature180, but no convincing results. The word „aliens‟ could mean immigrants as a translation of the coalition agreement from Danish language was used and it would make sense as Greenland already had some problems with bringing foreign workers from abroad for mining sector which was discussed in the previous chapter. Greenland has also published its foreign policy statement for 2014. At the foreword it is stated that the cooperation with Denmark in foreign policies is important to Greenland because its interests are defended better, but the position that the country‟s competence in this sphere should be strengthened is kept181 which makes Greenland‟s position somewhat difficult to understand. As it was established in the previous chapter, the country has put a lot of effort to reduce its economic dependency from Denmark and in this way – strengthen its political independency too, but in contradiction, the country wants to maintain cooperation with Denmark in foreign relations. From Greenland‟s point of view it looks perfectly fine, but if they are trying to become more and more sovereign, their ways are parting from the Danish and the latter would have less incentive to actually support Greenland as it would bring, if not none, then lesser benefits for Denmark. This issue is important because Greenland is Denmark‟s gateway to the Arctic, thus the former country has to put continuous efforts to hold its own strategy in the region and avoid the Danish influence. Economy in Greenland is inextricably linked with foreign policy as the main role of the latter, according to their policy statement, is to help create a sustainable economy182 and indeed, most of country‟s foreign policy content is about energy, economy, business promotion in international markets and attraction of investment. In the policy statement there are prioritized areas for the attraction of foreign investment and promotion of Greenlandic businesses abroad. First in the list are large scale projects including mining, second – tourism, third – ice and water and then follows infrastructure, export promotion, participation in west Nordic cooperation focusing on development of business183. In mining sector Greenland aims to ensure that all countries in the Arctic would have unified high standards of safety, health and environment in order to maintain Greenland‟s competitiveness in the field of mineral resources without compromising those considerations184.
180 Massive Structure in Greenland – Crashed Alien? Retrieved from: http://www.abovetopsecret.com/forum/thread460112/pg1; last checked: 2015 04 21. 181 Indledning. Udenrigspolitisk Redegørelse 2014, Government of Greenland. P. 6. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/Udenrigspolitiske%20redeg orelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 182 Ibid. 183 Departement for Erhverv, Råstoffer og Arbejdsmarked (IASN) inkl. Råstofsstyrelsen (MLSA). Udenrigspolitisk Redegørelse 2014, Government of Greenland. P. 48. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/Udenrigspolitiske%20redeg orelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 184 Multilaterale aktiviteter, Departement for Erhverv, Råstoffer og Arbejdsmarked (IASN) inkl. Råstofsstyrelsen (MLSA). Udenrigspolitisk Redegørelse 2014, Government of Greenland. P. 49. Retrieved from: 57
The statement also puts emphasis on the sea of law and describes Greenland‟s latest actions regarding the UNCLOS and claims for the extended territories. In 2012 Greenland prepared a claim for a 115 thousand km2 territory south of Greenland, in 2013 a claim for extended continental shelf for the area northeast of Greenland covering 62 thousand km2, in 2014 another claim - for 895 thousand km2 north of Greenland and at the end of 2014 five partial submissions (together with two Faroese claims) were forwarded by Denmark to the Commission on the Limits of the Continental Shelf (CLCS)185. As the submissions are relatively recent, there are no considerable developments yet. Greenland also boasts that during Canada‟s chairmanship in Arctic Council in 2013-2015, the host country has come up with a compromise solution which made it possible for Greenland to in ordinary and executive SAO (Senior Arctic Officials) meetings without any limitations186 which will allow Greenland to participate in the AC activities more effectively. Greenland„s Department of Foreign Affairs published a collection of Greenland„s international agreement descriptions called International Handbook (International Håndbog) in 2014. In section „Arctic Cooperation‟ distinguished international agreements can be found: Declaration on the Establishment of the Arctic Council; Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic; Memorandum of Understanding on Cooperation between the Government of Nunavut and The Greenland Home Rule Government; Joint Declaration of Premier of Greenland and Minister for Foreign Affairs of Iceland – Nuuk, 8 November 2013. As a list of documents, this publication is valuable, but there is only basic information given about the agreements making it hard to grasp Greenland‟s political position from this resource. From the table of contents it can be found that there are 5 chapters out of 13 that are dedicated to foreign politics – common foreign security, Arctic, Nordic, EU and Global cooperation, while other chapters are dedicated to trade, climate, finance, fishing, raw materials, business and labor, health, family, education and church187. What this shows is that Greenland tends to concentrate on practical side of things in international relations and does not give too much attention for discussions of the political issues.
http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/Udenrigspolitiske%20redeg orelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 185 The Continental Shelf Project. Retrieved from: http://a76.dk/lng_uk/main.html; last checked: 2015 04 24. 186 Rigsfællesskabets fælles udenrigs- og sikkerhedspolitik. Udenrigspolitisk Redegørelse 2014, Government of Greenland. P. 6. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/Udenrigspolitiske%20redeg orelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 187 International Handbook. Government of Greenland, Department of Foreign Affairs, 2014. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Udenrigs/InternationalHaandbog2014_DK.pdf; last checked: 2015 03 22. 58
While some countries emphasize mutual benefit or benefit for cooperation partners in their foreign policies or regional strategies, Greenland takes a quite hard self-centered approach promoting its own interests which turns their policy statements into economy and energy considerations with goals to attract foreign capital and to strengthen its businesses abroad. This is not a bad thing in its self as all countries reach for national benefit in one form or another, but Greenland‟s strategy is very „dry‟ in this sense as it concentrates far more on the business, economy and energy side rather than on politics. If there are any strategic notes even on how Greenland should strengthen its position in the AC or what groups in the organization should the country prioritize, words like „important‟, „relevant‟ or other abstract expressions are used which do not give any information on what is relevant and important to Greenland. Thus, there is practically no political strategy for the Arctic region as such, there is no discussion on the future of the region, nothing said about what Greenland could do for the development of it while being essentially at the heart of the Arctic. On one hand, the latter fact makes everything the country does to be Arctic, but there is no regional mindset, only a very self-centered one. The concentration on economy, business and energy shows that these are sectors most important to Greenland and that it foremost wants to develop them which makes an influence on how country‟s strategy is formed and to achieve these goals Greenland bases its strategy on cooperation and connection building which not only creates political ties between countries, but also promotes economic activities. 3.2 Iceland The High North is a core feature in Icelandic foreign policy and being a sovereign state, Iceland has an Arctic strategy, which was approved by the parliament – Althingi in 2011. Although not the most important thing, it is worth mentioning that it differs from other Arctic strategies in design. While most of them look consumer oriented with pictures, designed pages and with additional context information, Iceland‟s strategy is a simple and straightforward text which could mean it is less oriented towards public use. Otherwise, the topics are in line with the major ones in the region. From the twelve principals in Iceland„s Arctic policy, the very first one is about „promoting and strengthening the Arctic Council as the most important consultative forum on Arctic issues and working towards having international decisions on Arctic issues made there“188. Putting neither Icelandic national goals nor issues needed to be solved or prevented but such a statement as a first one in their policy shows a few things. First, to Iceland, Arctic Council is the most important international body in the Arctic. Second, putting this statement as the first one shows that
188 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P.1. 59
cooperation through international organization is the emphasis point in Iceland„s politics in the Arctic, which in turn means that Iceland seeks to 1) have its own influence in Arctic politics, 2) solve Arctic issues internationally through cooperation and by doing that to 3) get support in solving its own issues connected to Arctic. Moreover, Iceland rejects the idea of “Arctic Treaty” as such that would make the governance of Arctic a global matter189, but on contrary, the country has positive views towards extension of number of observer status holders at the AC190. Having more observer states would increase attention of international business which could raise competition but also possible contacts for Iceland to spread its own business activities. Turning Arctic into a matter of global governance would hinder political powers of Arctic states in the region and firstly so of the weakest and smallest countries, the prevention of such eventuality is one of the reasons why Iceland roots for stronger Arctic Council. Moreover, Iceland‟s position is that the Arctic Council, as a central authority in the region, should develop global approaches and start working with partners beyond the polar region as well. This would imply countries to have a unified position and would avoid sub-groups or unilateral behavior by states191. Iceland boasts to be the only sovereign state entirely located in the High North at oceanic crossroads192, which could be a significant fact, but on the other hand, other sovereign countries are just too large to fit in the region so inhospitable for human beings anyway. Iceland„s argument would not have much of political weight either, for example there are 325.000 people living in Murmansk in Russia alone193 - about the same as in Iceland, thus the country has no majority of people living in the Arctic, and there are far bigger territories of other countries in the Arctic as well. However, such claim can mean that Iceland is feeling insecure of truly being in the polar region and more so – a coastal state, which can be sensed in its strategy for the Arctic. The second principal in the strategy is devoted to justify the mentioned claim - that Iceland is a true Arctic coastal state, and seeks to establish that status internationally. Iceland accentuates straightaway that it is of central interest for the country to be recognized as a coastal state and to be able to make influence on region‟s development, international decisions and regional issues. It is said that „based
189 Bailes, A., Cela,M., Kjartansdóttir,K., Schram, K. Iceland: small but central. Perceptions and Strategies of Arcticness in Sub-Arctic Europe. Latvian Institute of International Affairs. SIA Hansa Print Riga, 2014. P. 83. 190 Ibid. P. 84. 191 Skarphéðinsson, Ö. The trans-Arctic Agenda: Challenges of Development, Security, Cooperation. A high-level international seminar at Reykjavik, Iceland, 18-19 March 2013. Institute of International Affairs University of Iceland. P. 5. Retrieved from: http://ams.hi.is/wp-content/uploads/2014/08/Arctic-brochure-A5-endurpr-28bls.pdf; last checked: 2015 04 28. 192 Hannesson, H.W. Iceland and the Arctic. Ministry for Foreign Affairs, Reykjavík, 26 November 2012. Retrieved from: http://www.institutenorth.org/assets/images/uploads/articles/Nor%C3%B0ursl%C3%B3%C3%B0astefna_Alaska_2611 _2012.pdf; last checked: 2014 04 28. 193 Population. The Arctic. Retrieved from: http://arctic.ru/geography-population/population; last checked: 2015 04 30. 60
on the fact that since the northern part of the Icelandic Exclusive Economic Zone falls within the Arctic and extends to the Greenland Sea adjoining the Arctic Ocean, Iceland has both territory and rights to sea areas north of the Arctic Circle“194. This motive continues in the following principle by stating that a wider economic, political and security related view should be taken rather than narrower geographical when interpreting the borders of the Arctic region. This is, of course, a matter of agreement on how to outline the Arctic region, but on the other hand, such practice of looking for wider definition is not new to Iceland, for example, it belongs to the Council of Baltic Sea States and one could hardly find arguments to prove that the country is in the Baltic Sea region geographically. It is important that the first countries mentioned in Icelandic policy are the Faroe Islands and Greenland with which Iceland seeks to strengthen cooperation, promote interests and common political position. It is mentioned that political consultation between Iceland and the Faroe Islands have intensified with the extensive Hoyvik Free Trade Agreement which has been mentioned in the previous chapter, given as an example195. It is of strategic interest for all three of these countries to cooperate with each other, because geographically they are close neighbors, they meet with similar economic, environmental and political challenges. Thus, the positions of these countries should often meet making it logical for them to have a unified position in Arctic Council for example or in other organizations or solving international issues. Position towards military and security questions in Iceland„s policy follows the logic of complex interdependence by stating that the country has to work against any militarization of the Arctic, moreover, instead of that, should promote cooperation in the „protection of biota, research, observation capabilities, search and rescue, as well as pollution prevention in the Arctic region“196. In recent years Iceland has focused on Arctic emergencies that could outstrip its own capabilities like the risk of shipping disasters and major pollution events near its coast, however, its diplomacy has been effective in driving the Arctic Council to adopt its first-ever legally binding cooperation agreements – on search and rescue197. Icelandic ministry for foreign affairs emphasizes „good co- operation between the states possessing interests in the High North and warn against any race for the resources of the North and unilateral actions“198. However, some cooperation activities Iceland
194 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P.1. 195 Ibid. P. 8. 196 Ibid. P. 3. 197 Bailes, A. JK., Heininen, L. Strategy Papers on the Arctic or High North: A comparative study and analysis. Alþjóðamálastofnun og Rannsóknarsetur um smáríki, háskólaútgáfan, 2012. P. 77. Retrieved from: http://ams.hi.is/wp- content/uploads/old/arctic_strategies_innsidur.pdf; last checked: 2014 04 28. 198 The High North. Ministry for Foreign Affairs. Retrieved from: http://www.mfa.is/foreign-policy/regional- issues/highnorth; last checked: 2015 04 26. 61
mentions in the strategy are: defense cooperation with United States; regional defense cooperation with Denmark, Norway and Canada199, thus there is cooperation at this level too, but it is almost a must for Iceland as the lack of armed forces makes the country to signify the dependence on others‟ behavior200 and encourages to turn the security narratives from military to environmental emergency connotations. Being in a disadvantageous position regarding military security with small populations, significantly smaller budgets in comparison to other states in the region and with Mikhail Gorbachev calling Arctic “a zone of peace”201 in 1987 in attempt to make the region into a demilitarized one, it is of essential interest for Iceland, the Faroe Islands and Greenland to work against any militarization and try to flip any of such narratives into non-military security issue solving, exactly as Iceland does. As discussed in the first chapter, it would be logical for relatively weaker state to look for stronger allies, ones who can take the initiative and have abilities and resources to solve issues, which is exactly the position that Iceland„s policy makers take stating that „it is of great importance that consensus is reached across the political spectrum on an Arctic policy which aims at positioning Iceland among those countries that have the greatest influence on future development in the region<...>“202. Such strategy is, of course, like two sides of a coin, meaning that Iceland may build up enough influence to affect the decision making process, but as a trade off, to take a position among the most influential states means Iceland would have to support or go along with the decisions that are important to some other country just to sustain the relations, but could be unfavorable to Iceland and may compromise the whole strategy. Moreover, by stressing cooperation with the smaller countries like the Faroe Islands, and also with the strongest ones, makes these statements less important because, as a result, cooperation with every country is accentuated, but what can be underlined here is cooperation which becomes the essential motive in Iceland‟s rhetoric. One of the most important points made in the Icelandic Arctic strategy is the criticism of a cooperation format for the coastal Arctic states – the Arctic 5 with members: United States, Canada, Russia, Norway and Denmark. Iceland states that such cooperation undermines the Arctic Council and that further development would dissolve solidarity between the eight Arctic states. This has been repeated more than once in the document emphasizing the importance for Iceland not to be
199 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P. 7. 200 Bailes, Heininen. Op. Cit.. P. 77. 201 Gorbachev, M. Speech in Murmansk at the Ceremonial Meeting on the Occasion of the Presentation of the Order of Lenin and the Gold Star to the City of Murmansk, 1 Oct. 1987. Retrieved from: http://www.arctic.or.kr/files/pdf/m2/m22/1/m22_1_eng.pdf; last checked: 2015 04 30. 202 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P. 4. 62
written out of Arctic cooperation and more importantly – decision making. It is said that the government of Iceland has already taken action i.e. public statements and talks with the Arctic 5 countries203. Iceland argues that because the country is located by the Arctic circle and country„s people rely on resources of the Arctic, it is very important to secure a position as a coastal state among other coastal states. Iceland„s arguments are that its exclusive economic zone is within the Arctic circle and extends to the Greenland Sea; has continental shelf rights in joint agreement with Norway between Iceland and Jan Mayen island; has rights to utilize resources within the 200 nautical miles around the Svalbard island204. Iceland is very clear about its goal to keep itself in the cooperation and among the decision making countries in the Arctic but there is an inconsistency in the strategy. At one point it quite strongly criticizes the Arctic 5 formation by saying it will ruin the solidarity among all the Arctic countries, but then further in the strategy Iceland tries to argue it should be among the coastal states, which have created and cooperate within the format Iceland has just criticized. It can be interpreted that Iceland seeks to create itself a win–win situation – that it should be acknowledged as a coastal state and would be involved in every international activity in the Arctic, but if not, there is no reason for the Arctic 5 as it creates separation among the Arctic countries. Such strategy also puts the country in a situation where it can be criticized by both sides and for inconsistency of its Arctic strategy. Being a small nation itself, Iceland shows its support for the indigenous peoples of the Arctic and criticizes, as the country expresses, „the powerful countries“ who ignore the interests of the indigenous people and the Arctic 5 for not including the indigenous peoples in the cooperation. Such actions, according to Iceland, should be counterbalanced by intensification of partnership with indigenous peoples„ organizations under the Arctic Council205. For Iceland itself the issue of indigenous people is not a big topic as it is a sovereign national country, but it uses the issue to emphasize the difference between the Arctic 5 and Arctic Council to show its priorities once again. In Platform of the Coalition Government formed by the Progressive party and the Independence party publicized on the 23rd of May 2013, it is mentioned that Iceland aims to be a leading force in the Arctic206. It is an ambitious plan for such a small country, although this goal is being reached not by enforcing rules on others, but by creating connections. In this year‟s annual report to parliament on foreign affairs, Iceland‟s Minister for Foreign Affairs Gunnar Bragi
203 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P. 5. 204 Ibid. P. 6. 205 Ibid. P. 8. 206 Benediktsson, B., Gunnlaugsson, S.D. Platform of the Coalition Government formed by the Progressive Party and the Independence Party, Laugarvatn, 22 May 2013. Retrieved from: http://www.government.is/government/coalition- platform/; last checked: 2014 04 27. 63
Sveinsson has emphasized the need for international cooperation regarding matters of security, environment, resources and business207. Iceland‟s position of a promoter of agreements and cooperation208 is not just expressed through its strategy for the Arctic region or other documents and publications, but made into actions. For example, the country has an Icelandic Arctic cooperation network website209 to which there are directions from Icelandic government„s website meaning it is backed up by the government. The network houses a lot of various information on Arctic cooperation, has a number of partners from Icelandic universities to Arctic Council‟s working groups PAME or CAFF (Protection of the Arctic Marine Environment and The Conservation of Arctic Flora and Fauna accordingly), organizes events. The network, in cooperation with the Ministry for Foreign Affairs, Chamber of Commerce and the Icelandic Federation of Industry established the Icelandic-Arctic Chamber of Commerce in 2013. Amongst chamber„s operations are fisheries, tourism, transport, shipping, production, renewable energy use, oil and gas industry, health care, education and innovation. The goal is to put to use the knowledge, experience, high quality transport systems and good geographical location that Iceland holds210. There is also a bilateral wing of the Icelandic chamber of commerce in which Iceland cooperates with US, Denmark, Finland, Faroe Islands, Greenland, Norway and Sweden211. Iceland has a joint committee on Arctic affairs under the ministry for the environment and natural resources. The mission of the committee is to strengthen and enforce cooperation between partners in Arctic research and the matters of the Stefansson Arctic institute under the Icelandic Ministry for Environment. The committee is appointed by the Minister for Foreign Affairs for four year term. The committee in its work should include institutions and organizations that work in Arctic Affairs212. In October 2013, by initiative of the Prime Minister, a committee of ministers on Arctic Affairs had been established with himself in the chair and ministers of foreign affairs; the interior; industry and innovation; and environment and natural resources to improve consultation and coordination regarding Arctic issues. Moreover, Iceland‟s President Ólafur Ragnar Grímsson, who has been in office since 1996, has long campaigned for more international attention to Arctic issues and promoted the first large
207 Sveinsson, G.B. Minister for Foreign Affairs report on foreign and international affairs Thursday 19 March 2015. Retrieved from: http://www.mfa.is/media/gunnar-bragi/EN_FM-statement-to-Parliament_19.03.15.pdf; last checked: 2014 04 28. 208 Hannesson, H.W. Op. Cit. 209 Icelandic Arctic Cooperation Network. Retrieved from: http://arcticiceland.is/en/; last checked: 2015 04 27. 210 Icelandic-Arctic Chamber of Commerce. Icelandic Arctic Cooperation Network. Retrieved from: http://arcticiceland.is/en/island-og-nordhurslodhir/nordhurslodha-vidhskiptaradhidh; last checked: 2015 04 27. 211 Ibid. 212 The Icelandic Joint Committee on Arctic Affairs. Retrieved from: http://arcticiceland.is/en/island-og- nordhurslodhir/samvinnunefnd-um-malefni-nordhurslodha; last checked: 2014 04 27. 64
scale „Arctic Circle‟ meeting at Reykjavik in autumn 2013213. Therfore, there are these different levels of activities directed towards Arctic and Icelandic government is involved in all of them in one way or another proving that the country is actually active in the high north region. International law is a cornerstone of relations between states in the Arctic region and, unsurprisingly, as every other state, Iceland expresses strong position towards the question - in Icelandic Arctic strategy the importance of the United Nations Convention on the Law of the Sea is acknowledged214. Furthermore, in Iceland„s government website it is stated that the country „has for many years had a prominent role in formulating international rules concerning the sea and its utilization and the use of marine resources and is committed to creating necessary rules for the High North based on international law“215. The latter statement does remind that Iceland is not only an Arctic, but one of the Nordic states too, which are known to be states – norm entrepreneurs. All in all, Arctic takes a prominent role in Icelandic international policies and is entrenched with country‟s strategy for the region. The latter takes a central position when the high north policies are discussed. The first of twelve principals in the document is dedicated to Arctic Council and Iceland voices a strong support for the organization. The country also expresses a need for a unified position of member states in the Council, as well as stronger organization and even support for the global role of the Arctic Council. The bottom line is that the organization‟s essence is cooperation in the region and Iceland‟s support means the country is of the same position. One of the main issues expressed in the strategy is Iceland‟s need to be recognized as a true Arctic coastal state basing on the argument that the Arctic boundaries should be outlined based on wider aspects than only geographical ones. It is important for the country to be able to make influence on region‟s development, international decisions and regional issues. However, the real issue for Iceland is that it was not included in cooperation format for the coastal Arctic states – the Arctic 5. Iceland criticizes that such cooperation undermines the Arctic Council and that further development would dissolve solidarity between the eight Arctic states, which again reassures Iceland‟s support for the arctic Council. The support for Arctic Council and criticism towards Arctic 5 is also seen in issues of indigenous people which Iceland supports and the latter organization does not include while the former does. Iceland‟s position of a promoter of agreements and cooperation shows in state‟s activities as well. There is Icelandic Arctic cooperation network; Arctic Chamber of Commerce promoting multilateral and bilateral cooperation with all countries in the region; a joint committee on Arctic
213Bailes, Cela, Kjartansdóttir, Schram. Op. Cit. P. 86. 214 A Parliamentary Resolution on Iceland's Arctic Policy. Op. Cit. P. 1. 215 The High North. Op. Cit. 65
affairs under the ministry for the environment and natural resources; a committee of ministers on Arctic Affairs. The goal is to put to use the knowledge, experience and good geographical location that Iceland holds. Position towards military and security questions in Iceland„s policy follows the logic of complex interdependence by stating that the country has to work against any militarization of the Arctic, moreover, instead of that, should promote cooperation in the protection of biota, research, observation capabilities, search and rescue, as well as pollution prevention in the Arctic region. Iceland also seeks to take its role in international law by creating necessary rules for the High North based on international law. The essence of Iceland‟s Arctic policy is cooperation and connection building, as well as strong involvement in the region‟s activities. The country implements multiple channels to achieve its goals and with a variety of them, does not seem to have them organized in a specific hierarchical structure. Iceland‟s economy and reliable energy situation allows the country to be active in the region as it has products to offer from their high-tech industry, world leading equipment, experience and good geographical position. Nevertheless, the domestic market is still very small if compared to other countries, hence active promotion of business and free market is very important. Therefore, connection building is the key for Iceland‟s economic as well as political goals in the Arctic region. 3.3 The Faroe Islands The Faroe Islands meet the same challenge that Greenland does in a construction of an Arctic and foreign policy, that is that they both are not fully sovereign countries, but autonomous regions of the Kingdom of Denmark, albeit with relatively wide administrative and political powers. These are wide enough for the home rule to have their own foreign policies and the Faroe Islands use this opportunity actively by publishing Arctic policy in 2013 called “The Faroe Islands – a Nation in the Arctic” 216. The use of a word nation in the title and that the strategy has been written despite the common strategy of Denmark – Greenland – The Faroe Islands a few years back shows high Faroese interest in the Arctic and in sovereign policies in the region. In the Faroese strategy it is said that the Faroe Islands are active in international cooperation, particularly when the topics are related to management of natural resources, sustainable economic development, research and cultural cooperation217. In other words, the country is stating that it is prioritizing its interests in the region, albeit it is interesting to see culture here too. On the other hand culture can give additional connections which may be useful for the Faroe Islands.
216 The Faroe Islands – a nation in the Arctic. Op. Cit. 217 Ibid. P. 8. 66
As it is with Greenland, the Faroe Islands are not fully capable of implementing their own foreign policies as part of these powers are still kept to the Danish authorities, thus it is relevant to analyze which institutional structures are responsible and what powers can Faroes use in their foreign strategies. Executive and legislative powers are carried out by a 33-member unicameral parliamentary body called the Løgting in Tórshavn, usually the leader of majority party becomes the Prime Minister218. The latter and the administrative office of the Prime Minister, more precisely, the Department of Administration and the Foreign Service inside the office is the institution that deals with foreign policy in the Faroe Islands219, therefore there is no separate ministry for foreign affairs. There is also a parliamentary body that keeps the foreign policy in check - seven members of the parliament are appointed to a foreign affairs committee with which the government consults before decisions are made regarding foreign policy issues of major importance or negotiations with Danish authorities on significant issues impacting relations between the Faroe Islands and Denmark220. This system should provide a unanimous approach towards foreign affairs in the country as the Prime Minister, who is usually from the majority party, should work in tandem with the foreign affairs committee in the parliament. The rights of the Faroe Islands in the sphere of international affairs are laid down in the Act on the Conclusion of Agreements under International Law by the Government of the Faroes. According to the agreement, “Faroes may negotiate and conclude agreements under international law with foreign states and international organizations, including administrative agreements, which relate entirely to subject matters under the jurisdiction of the authorities of the Faroes” and is able to do so under its own name when international organizations allow221, although if the matter touches Greenland too, the two governments have to act jointly. Moreover, said rights do not apply to “agreements under international law affecting defense and security policy, or agreements which are to apply to Denmark or which are negotiated within an international organization of which the Kingdom of Denmark is a member”222, albeit the Faroes may conclude agreements under international law related to defense and security policy when the other party to the agreement is not represented by its foreign ministry or its defense ministry. Even more so, all these provisions will not limit the powers of the Danish authorities relating to the negotiation, conclusion and termination
218 Coleman Y.D., Editor in Chief. Op. Cit. P. 90-91. 219 The Prime Minister‟s Office. The Government of the Faroe Islands. Retrieved from: http://www.government.fo/the- government/ministries/prime-ministers-office/; last checked: 2015 05 03. 220 Parliamentary Act No. 103 from July 26 1994 on Home Rule in the Faroe Islands. Retrieved from: http://www.government.fo/the-government/parliamentary-act-on-home-rule-in-the-faroes/; last checked 2015 05 02. 221 Act on the Conclusion of Agreements under International Law by the Government of the Faroes. Act No. 80 of May 14th 2005. Retrieved from: http://www.government.fo/the-government/act-on-the-conclusion-of-agreements-under- international-law/; last checked: 2015 05 02. 222 Ibid. 67
of agreements under international law including agreements, which are also matters under the jurisdiction of the Faroe authorities223. Having their own interests and striving for ever more active role in the Arctic, the Faroese feel constrained by the current foreign affairs system. On the 13th of April, 2015, the Prime Minister Kaj Leo Holm Johannesen submitted a foreign policy report for debate in the parliament. The Prime Minister and the parliament were of the same position regarding the Faroese foreign policy rights, the provision where the Faroe Islands have to go into an agreement together with Greenland was viewed critically. According to Johannesen, this consensus regime is especially problematic in three international fisheries organizations - the North East Atlantic Fisheries Commission, the Northwest Atlantic Fisheries Organization, and the North Atlantic Salmon Conservation. Furthermore, he said that it has been proven a number of times that the interests of Greenland and the Faroe Islands are not the same regarding fisheries224 based on the fact that the fishing territories are different. It is viewed as a serious problem constraining both Greenland and the Faroes to act freely in international politics. Among the topics during the discussion in the parliament the Hoyvík agreement between the Faroe Islands and Iceland was mentioned as well. There was some dissatisfaction with how the agreement works and new possible agreement between the Faroe Islands and Iceland, and an agreement between the Faroe Islands and Greenland were proposed as a possibility225. The bottom line of the Prime Minister‟s report and the discussion in the parliament is that the Faroe Islands are critical towards its current foreign affairs abilities which come from negotiations with Denmark, but at the same time actively show their intentions to continue and further develop cooperation and work for their interests in the region. Said to be the most important organization in the polar region, Arctic Council is placed high in the Faroese Arctic strategy. The Faroe Islands in the organization are represented as a part of delegation called „Denmark/Greenland/Faroe Islands‟226, but the task for the latter country is to affect the organization of the delegation in a way that would enable and encourage the perspectives of all three nations to be heard227. It means there is a misrepresentation problem within the delegation and the Faroe Islands wish to be seen and heard more. Furthermore, Faroe Islands claim that most of the topics discussed in the Arctic Council relate to political areas for which the Faroese
223 Act on the Conclusion of Agreements under International Law by the Government of the Faroes. Op. Cit. 224 Fjeldsbø, T.A.K. Faroese PM calls for independent international fisheries vote, APRIL 16. 2015. NORA Region Trends. Retrieved from: http://www.noraregiontrends.org/news/news-single/article/faroese-pm-calls-for-separate-votes- for-greenland-and-the-faroe-islands/87/; last checked: 2015 05 04. 225 Indberetning nr. 3/2015. Rigsombudsmanden på Fęrųerne, Tórshavn, den 21. april 2015. Retrieved from: http://www.ft.dk/samling/20141/almdel/f%C3%A6u/bilag/6/1521478.pdf; last checked: 2015 05 04. 226 The Faroe Islands – a nation in the Arctic. Op. Cit. . 9. 227 Ibid. P. 13. 68
government has exclusive competence228, thus the country has a genuine interest to strengthen its positions and get more freedom for political maneuvers. To the Faroe Islands, Arctic Council is the essential forum for the Arctic cooperation, but at the same time – the best space to push its own interests into international agenda. In the Arctic strategy, it goes as far as to saying that „in order for the Faroe Islands to ensure that the decisions made by the Arctic Council are in the interest of the Faroe Islands, it is critical that the Faroes take an active role in expressing Faroese interests and shaping the Council‟s decision-making processes to their favor“229. This is a bold claim but an open one showing the realistic interests of the Faroes, nevertheless, it lacks the diplomacy that is evident in the Danish Kingdom„s strategy for the Arctic for comparison. In the Faroese strategy it is even stated that “as a fishing nation, the Faroe Islands play a key role in the Arctic Council”230. A few points are worth mentioning here regarding these statements. Firstly, a self-centered approach is prevalent in the strategy. As it was discussed in the first chapter, stronger states sometimes tend to go along with the proposals of weaker states, despite their lack of real potential in the field or issue, in order not to look self-interested, while at the same time the Faroe Islands is a great example of a small state that takes the opposite approach towards international politics – there is not much diplomacy in the text, everything is laid down straightforwardly and major idea under it all is how to further Faroese economic and political interests in the Arctic region. A strategy at least tells what the country wants to reach, but it can be at odds with what the country is really capable of - it would be strange to see far stronger countries in the region dancing to the Faroese melody. Secondly, since human resources are not that abundant in the country, it puts yet another level of complicity to organize and do everything that is needed to sustain a thorough political position. Therefore, the Faroes have to prioritize their efforts in the Arctic Council meetings and other working procedures231, which justifies the goal to shape the decision making process of the Council more suitable to a small nation with low capabilities like the Faroe Islands. There are a few Council„s working groups that are prioritized by the Faroe Islands: AMAP - The Arctic Monitoring and Assessment Programme, CAFF – The Conservation of Arctic Flora and Fauna group, PAME – The Protection of the Arctic Marine Environment group, SDWG – The Sustainable Development Working Group232. Here, a negation of the complex interdependence theory rises in an interesting manner – because of low human resources, the country has to prioritize or in other words, form a
228 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 10. 229 Ibid. 230 Ibid. 231 Ibid. 232 Ibid. P. 11. 69
hierarchy of issues, although, the latter has to be more flexible than the everlasting realist assumption that military and safety always tops the pyramid of issues. There are a few other problems mentioned in the strategy. One of them is related to the Standing Committee of Parliamentarians of the Arctic Region – SCPAR, which is emphasized as an important form of cooperation, but the issue is that the Faroe Islands do not have direct representation in the organization. It is noted that Greenland and Denmark have a united representation and that the Faroes have participated in a number of meetings as a representative of the West Nordic Council which has an observer status. Nevertheless, it is one of the important goals for the country to have its own representatives in the SCPAR233. This issue is basically the same as in the Arctic Council where the country has limited abilities to maneuver being commonly represented with Denmark and Greenland and where the Faroe Islands have to go into agreements together with Greenland in a sense that the Faroe Islands need more abilities to conduct their own national politics and the current system for foreign affairs is viewed as a constraint. In the strategy, none of the Arctic countries are excluded from being important partners for the Faroes, although West Nordic countries – Iceland, Greenland and Norway are emphasized a bit more. The Faroe Islands promote a joint West Nordic approach to Arctic cooperation together with Iceland, Greenland and Northern Norway. According to Faroese Arctic strategy, the country has much in common with the other nations and communities in the High North, in particular, similar economic foundations, closeness to nature, cultural similarity and similar challenges234. These positions show that the Faroe Islands hold a consistent strategy of connection building, cooperation through issue solving and the mentioned similarities, although, often in the strategy a self-centered approach can be felt as well. Mostly so regarding indigenous people, who are of an interest for the Faroes too, but only as much as there are common interests to join forces and issues to solve commonly235. It seems that the country is not too much considerate about the rights or issues of the indigenous people, but will not hesitate to join forces if there is a common issue to be solved. In regard of the Arctic cooperation and the interests of non-Arctic states in the region and their seek to impose international laws similar to the Antarctic Treaty that would control order in the Arctic or seek to control the fisheries, the Faroes take a position that „The Arctic countries are perfectly capable of managing development and cooperation in the Arctic area in a sensible and peaceful manner and in accordance with relevant international treaties and principles“236. If all other
233 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 11. 234 Ibid. P. 10-13. 235 Ibid. P. 13. 236 Ibid. P. 8. 70
Faroese positions are kept in mind, it is logical that for a small state, additional competition from outside the region is politically dangerous, especially when the country itself shows such stringent strategy measures to gain influence in the region. Regarding security issues, the Faroe Islands look quite optimistically at the military bases in the Arctic in a sense that they view them as emergency and rescue facilities which can be used to solve security issues coming from climate change and increasing commercial activity in the region237, in other words, this is completely an anti-military position, the proposition to repurpose the bases for emergency and response presupposes that there is no longer any point to use them as it was originally intended. The Faroe Islands, as almost every other state in the Arctic, has recognized the UNCLOS law of the sea and work according to it. One of the successful cooperation on international law cases for the Faroe Islands was that on 14 of March 2014, the UN Commission on the Limits of the Continental Shelf recognized an area covering 87,792 square kilometers of continental shelf to the Faroe Islands, thus confirming the sovereign rights of Denmark/Faroes to this area. However, Norway and Iceland have overlapping claims to parts of the same area, but the three parties in 2006 have agreed to a prospective procedure on how to delimit the area of mutual interest. As Norway has already received its relevant recommendations in March 2009, the Faroe Islands and Norway are now waiting for the completion of Iceland„s submission which is currently pending to be able to finalize the three bilateral delimitation agreements238. This shows that even in a situation where the countries are claiming the same piece of territory, Iceland, Norway and the Faroe Islands still manage to come under an agreement showing strong cooperative intentions. Overall, the Faroe Islands provide a broad Arctic strategy with a lot of additional information and suggestions. The problem, though, is that there is a disproportionately excessive amount of descriptions about organizations, information about the situation in the region, while there is very little about politics overall and even less about political position and goals of the Faroe Islands. The strategy could be called realistic meaning that the situation is viewed with understanding of the Faroese abilities. Having to prioritize work in the Arctic Council as a consequence of a small administration gives a clear example that negates complex interdependence assumption that there is no hierarchy in agenda setting. The case is even strengthened by the situation of Faroese economy with 95% of exports coming from fishing industries making it the top priority in the Faroese
237 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 8. 238 Claimed Entitlement to Outer Continental Shelf North of the Faroe Islands recognised by the Commission on the Limits of the Continental Shelf, 20 March, 2014. The Government of the Faroe Islands. Retrieved from: http://www.government.fo/news/news/claimed-entitlement-to-outer-continental-shelf-north-of-the-faroe-islands- recognised-by-the-commission-on-the-limits-of-the-continental-shelf/; last checked: 2015 05 03. 71
politics. While not exaggerating its abilities, at the same time the country tries to boost its importance by showing itself, maybe, more necessary to the region than it really might be and sets itself goals that could be above its weight, like, for example, to strengthen its influence on the decision making processes in the Arctic Council and other organizations, to become a maritime hub in the region. In international relations, the Faroe Islands are willing to use every opportunity to increase their political and practical gains, thus the strategy can be also seen as a forthright one. As it was discussed in the earlier chapters, there are limits to what a country can reach politically, but small states can at least in part overcome them by creating connections, involving in cooperative activities and looking for partners with same positions regarding issues in international activities. Hence, the Faroe Islands know its limitations, but sets high standards and objectives which the country tries to reach through connection building and promotion of its own activities and capabilities. The positive side is that the strategy is comprehensive and informative, it even provides recommendations to Faroese government and parliament, for example, on the purchase of equipment for emergency response to oil spills at sea with provided list of equipment with technical data and finance suggestions239. In Alyson J.K. Bailes‟ opinion, the Faroese report shows typical small-state features in terms of balancing relationships and the use made of multilateral fora. According to her, the strategy would place the Faroes in the Nordic mainstream, but it also steers clear of any stances that would risk isolating the Faroes or conflicting directly with Russian, Canadian or US policies“240. With high economic and political goals in the region, the country certainly cannot afford to be in serious confrontation with other countries and instead choose cooperation and positive relations, business connections. The Faroese approach to organizations engaged in Arctic affairs is also of a classic small state with aims of maximum participation and visibility, self branding, promotion of national agendas and full exploitation of institutional rights and resources241. In a nutshell, to be seen, heard, to create opportunities for Faroese businesses, to strengthen cooperation with states that share common views and issues242 are the main goals of the Faroe Islands in the Arctic.
239 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 40-41. 240 Bailes, J.K.A. The Faroe Islands and the Arctic: Genesis of a Strategy. Icelandic Review of Politics and Administration Vol. 9, Issue 2 (531-548), 2013. P. 544. Retrieved from: http://www.irpa.is/article/view/1228; last checked: 2015 01 23. 241 Ibid. 242 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 11. 72
3.4 Comparison of politics of Greenland, the Faroe Islands and Iceland in the Arctic The Faroe Islands, Iceland and Greenland are all active in the Arctic, but only the two former countries have published their own Arctic strategies. The Faroe Islands have Arctic policy called “The Faroe Islands – a Nation in the Arctic” published in 2013 and Iceland has “A Parliamentary Resolution on Iceland's Arctic Policy” approved by the parliament in 2011. Greenland, on the other hand, does not have a separate strategy. There is the “Kingdom of Denmark Strategy for the Arctic 2011 – 2020“ covering Denmark, Greenland and the Faroe Islands, but it is mostly written from the common or Danish perspective. Thus, such documents as a common draft Arctic strategy of Greenland and Denmark published in 2008 or Greenland‟s coalition agreement after the government elections in 2014 had to be used as base sources of information. One of the methods to draw attention to Faroese politics in the Arctic expressed in their strategy is by publicizing more information material on the Faroe Islands and their interests in English language243. Iceland also does not lack information in English regarding the subject, but Greenland, once again, is a different case here. There is very little information in English, albeit the country provides more in Danish language, though, compared to the Faroe Islands and Iceland overall, very little still. The fact that Greenland and the Faroe Islands are not fully sovereign countries, but are parts of the Danish Kingdom present a number of challenges for them when forming Arctic policies which are not met by Iceland. For example, it hasn‟t been such a long time since they have established their home rule governments and foreign affairs institutions. Therefore, possibly not enough time has passed to build competence in the field and to optimize the workflow. According to Greenland‟s Self Government Act244 and Act on the Conclusion of Agreements under International Law by the Government of the Faroes245, the countries can conclude agreements with foreign states and international organizations, but only in hometaken areas, the countries are also able to do so under their own name when international organizations allow. Yet, if the matter touches both of these countries, the two governments have to act jointly. As it has been noted by the Faroese Prime Minister, the interests of Greenland and the Faroe Islands are not always the same and it is viewed as a serious problem constraining both Greenland and the Faroes from acting freely in international politics. Moreover, Denmark is still in control of defense and security policy agreements or those which are to apply to Denmark or negotiated within an international
243 The Faroe Islands – a nation in the Arctic. Op. Cit. P. 13. 244 The Greenland Self-Government Arrangement. The Prime Minister‟s Office. Retrieved from: http://www.stm.dk/_p_13090.html; last checked: 2015 05 08. 245 Act on the Conclusion of Agreements under International Law by the Government of the Faroes. Op. Cit. 73
organization which the Kingdom of Denmark is a member of. The objective for the Faroese government is to gain as much freedom as it can in conducting its own foreign policies. Greenland‟s position is mainly the same, but the country also states that the cooperation with Denmark in foreign policies is important because then Greenland‟s interests are defended better. It seems that the country is balancing between the goal for political freedom and the political shelter of Denmark in international affairs. To conduct its foreign affairs Greenland has a department of Foreign Affairs which is presented among other ministries and is headed by the Minister for industry, labor and trade. The Prime Minister of the Faroe Islands and the Department of Administration and the Foreign Service inside the PM‟s office is the institution that deals with foreign policy in the Faroe Islands, while Iceland as a sovereign state has a Ministry for Foreign Affairs. Moreover, small populations also add to the problematic of conducting foreign policies in the Arctic for Greenland and the Faroe Islands. For example, the latter in their Arctic strategy express worries that because of the small nation, Faroes have to prioritize their efforts in the Arctic Council meetings and other working procedures. Here, the complex interdependence theory is negated because of low human resources forcing the country to prioritize and form a hierarchy of issues, contrary to what theory is suggesting - that after the military question has been taken from the top of hierarchy pyramid, there is no longer any prioritization of issues. Faroe Islands even have a goal in their strategy to shape the decision making process of the Arctic Council more suitable to a small nation with low administration capabilities. If compared how the strategies are written, the Faroe Islands provide a broad Arctic strategy with a lot of additional information and suggestions. The problem, though, is that there is a disproportionately excessive amount of descriptions about organizations, information about the situation in the region, while there is very little about political position and goals of the Faroe Islands. Without pictures and designed pages, Icelandic strategy is not a strategy made to be publicized as the Faroese one. It is far shorter, but far more concentrated on the Icelandic strategy, issues and challenges that the country meets. Greenland cannot be involved in this comparison since it does not have its own Arctic strategy as a separate document. The Arctic Council is the most important forum in the Arctic according to Greenland, the Faroe Islands and Iceland. All of them promote cooperation in the region through the organization and actively seek to have their own influence in decision-making processes in the organization, as well as to solve Arctic issues internationally through cooperation and in this way to get support in solving their own issues. Iceland also expresses a need for a unified position of member states in the Council, as well as stronger organization and even support for the global role of the Arctic Council. Iceland has positive views towards the extension of number of observer status holders at the Arctic
74
Council, although the Faroes do not seem so positive about the question. The possible competition from countries outside the Arctic can raise political competition. TO further the argument, both Iceland and the Faroe Islands reject the idea of „Arctic Treaty‟ that would make governance of Arctic into a global matter. However, more countries involved in the Arctic matters could also create opportunities to promote business, which is what Iceland could be aming for and the Faroe Islands are sensitive to any additional competition because their own positions need to be strengthened. Considering the common Denmark – Greenland – Faroe Islands delegation in the Arctic Council, the task for the latter country is to affect the organization of the delegation in a way that would enable and encourage the perspectives of all three nations to be heard. Furthermore, Faroe Islands claim that most of the topics discussed in the Arctic Council relate to political areas for which the Faroese government has exclusive competence, which could also be said about Greenland. The latter does not provide much information about its position regarding Arctic Council. For example, Greenland‟s government states that in the organization‟s six working groups, Greenland participates in the most relevant ones, but does not specify which are the most important groups for the country. Iceland voices strongly for cooperation in the organization, while the Faroe Islands express the need to influence Arctic Council to their own needs the most actively. Greenland takes part in Arctic 5 cooperation and supports the format, arguing that it is a format primarily for issues relevant to the five coastal states. Since the Faroe Islands are not participating, the cooperation format is not even mentioned in the Faroese strategy. Iceland, being excluded from this participation, criticizes Arctic 5 for dissolving solidarity between the eight Arctic states. However, for Iceland, it is of a vital interest to be recognized as a coastal state. It is important for the country to be able to make influence on region‟s development and decision making process. Basically, the country wants to be recognized as a coastal state, but criticizes the Arctic 5 for assuming the decision making powers in the region. The first countries mentioned in Icelandic policy are the Faroe Islands and Greenland with which Iceland seeks to strengthen cooperation, promote interests and common political position. In the Faroese strategy West Nordic countries – Iceland, Greenland and Norway are emphasized. The three smallest countries in the Arctic are actively cooperating in the region. For example, with addition of Norway, they are all involved in organizations as Nordic Atlantic Cooperation (NORA); NAMMCO – North Atlantic Marine Mammal Commission and the West Nordic Cooperation joining Iceland, the Faroe Islands and Greenland. It is of strategic interest for all three of these countries to cooperate with each other, because geographically they are close neighbors, they meet with similar economic, environmental and political challenges, thus can have aligning positions.
75
All three countries mention indigenous people in the Arctic, but have slightly different approaches. Greenland works actively on indigenous people‟s rights. Together with Denmark it established a Permanent Forum on Indigenous Issues in the UN in 2002, participated in negotiations on the UN Declaration on the Rights of Indigenous Peoples which was adopted in 2007. Iceland also shows its support for indigenous people, but at the same time does not miss the opportunity to criticize “the powerful countries” and the Arctic 5 for ignoring indigenous people and commend Arctic Council for including them in cooperation. The Faroe Islands have a quite different approach regarding indigenous people, who are of an interest for the Faroes too, but only as much as there are common interests to join forces and issues to be solved commonly. Greenland, Iceland and the Faroe Islands acknowledge the importance of the United Nations Convention on the Law of the Sea, but have slightly different approaches when presenting it in their strategies. Greenland and the Faroe Islands present the latest developments regarding territory claims. From 2012 to 2014 Greenland has prepared three claims and at the end of 2014 five partial submissions together with two Faroese claims were forwarded by Denmark to the Commission on the Limits of the Continental Shelf. While there are no new developments regarding the question for Greenland, in 2014, the commission recognized an area covering 87,792 square kilometers of continental shelf to the Faroe Islands. What the latter is emphasizing is that although Norway and Iceland have overlapping claims to parts of the same area, the three countries have agreed on how they‟ll divide the territory between themselves. Iceland‟s strategy, though, only provides information about developments of other countries but not about its own. Position towards military and security questions in Iceland„s as well as the Faroe Islands‟ policies follow the logic of complex interdependence by stating that the countries have to work against any militarization of the Arctic, moreover, instead of that, should promote cooperation in the protection of biota, research, observation capabilities, search and rescue, as well as pollution prevention in the Arctic region. Faroe Islands also view the military bases in the Arctic as emergency and rescue facilities and overall, both countries take a completely anti-military position. Greenland is not so vocal about the question, it has long standing agreements with the USA which include security issues, for example the latter country has a military air base located in Thule, thus the country discusses cooperation with the USA in the field, but not in general terms as such. All three countries try to be seen, heard, strengthen cooperation with states that share common views and issues, create new connections in the Arctic, but their narratives are slightly different. The essence of Iceland‟s Arctic policy is cooperation and connection building, cooperation through issue solving as well as strong involvement in the region‟s activities. The same can be said about the Faroese and Greenlandic policies, but the latter two countries have a far more pronounced self-
76
centered approach. Iceland aims at positioning itself among those countries that have the greatest influence on future development in the region. Furthermore, Iceland aims to be a leading force in the Arctic, but the country tries to do so through promoting cooperation and agreements. The Faroe Islands and Greenland have the same goals, although express far less emphasis on cooperation, but rather connection building and promotion of their own activities and capabilities, willingness to use every opportunity to increase their political and practical gains. Faroese approach seems to be more active than Greenland‟s, but both take more stringent and forthright positions than Iceland, most likely so because the latter is a sovereign country and thus has a far stronger position in international relations in the Arctic region than the Faroe Islands or Greenland which feel that they still need to establish their positions. Iceland implements multiple channels – activity in various organizations, involvement in law making, trade and business in the region, to achieve its goals and does not seem to have them organized in a specific hierarchical structure like the Faroe Islands do. The complex interdependence assumption that there no longer is hierarchy in agenda setting is affirmed in Iceland‟s case as its economy and reliable energy situation allows the country to be active in the region with products to offer from their high-tech industry, world leading equipment, experience and good geographical position. The Faroe Islands, on the other hand, having to prioritize its work as a consequence of a small administration and with 95% of exports coming from fishing industries making it the top priority in the Faroese politics, gives a clear example that negates the assumption. Greenland, with economy geared to gain more freedom from Denmark and Arctic policies so much concentrated on economy, would stand at the Faroese side here. Greenland‟s policy statements for the Arctic are mainly economy and energy considerations with goals to attract foreign capital and to strengthen its businesses abroad. Thus, Greenland‟s strategy is very „dry‟ in this sense as it concentrates far more on these things rather than on politics and as a result there is practically no political strategy for the Arctic region as such. Although, to achieve its goals, Greenland promotes cooperation and connection building which not only creates political ties between countries, but also directed towards promotion of economic activities. While Greenland and the Faroe Islands do prioritize their Arctic policy objectives contradicting complex interdependence assumption that there should be no hierarchy of issues, both of these countries together with Iceland create and promote multiple channels of connections through business and political activities in the Arctic. Although the military questions were just touched in the analysis, it is clear that Greenland, Iceland and the Faroe Islands oppose any militarization in the region and the former seems to express a slightly more reserved position than the latter two. Regarding economy, Greenland with a major objective to strengthen its economy, the
77
Faroe Islands trying to maintain the already overwhelmingly dominant fishing industry and Iceland with far more developed energy sector and more diversified economy, in comparison to the former two countries, all still have small domestic markets, hence they have to actively promote business and free market in the Arctic. Nevertheless, Greenland, Iceland and the Faroe Islands all voice a goal to be among the “big players” in the region and to reach it, as well as to compensate for weaker economies, all three countries try to use the international environment in the Arctic to the fullest through maximum participation and visibility, self branding, promotion of national agendas and full exploitation of institutional rights.
78
CONCLUSIONS
1. International cooperation, regional organizations and business are multiple channels the Faroe Islands, Greenland and Iceland employ to develop connections in order to be visible in the Arctic arena and to make influence in its agenda setting. Such strategy is a viable option for these states, keeping in mind that their economies produce comparatively far less GDP than other states in the Circumpolar North and since their domestic markets are really small, open international markets are important for their economies and active involvement in the High North serves this purpose. 2. Because Greenland and the Faroe Islands are heavily dependent on fishing industry in export while Iceland less so, all of them are active in this sphere in international organizations and get involved in creation of fishing laws, also are encouraged to look into ways to strengthen and diversify their economies. Greenland had put the most hopes compared to Iceland and the Faroe Islands in oil explorations, which, however, have so far proven to be commercially unsuccessful for all three countries, meaning there‟s no additional inflow of revenues which would change states‟ capabilities economically and boost their political influence in the region. Greenland, the Faroe Islands and Iceland are taking measures to strengthen their renewable energy sector to lessen the influence and vulnerability from the supply of fossil fuels, thereby contributing to the environmental protection in the Arctic. Tourism has been a priority area for Iceland for several years now and it has yielded largely positive results; for Greenland, the industry is currently a major interest and an expected source of rising revenues; the Faroe Islands, on the other hand, are looking skeptically at it. Faroese are the most concentrated in connection building in the Arctic region aiming to become a maritime hub, to get every benefit possible from the presence of international companies in the country, while Greenland is the least active in promoting its businesses in the Arctic. 3. The key of Arctic policies of all three countries is to be seen, heard and strengthen cooperation with states that share common views and issues, to create new connections and use the international environment in the Arctic to the fullest, but their narratives are slightly different. Faroese and Greenlandic policies have a strongly pronounced self-interested approach and express promotion of their own activities and capabilities. Faroese approach seems to be more active than Greenland‟s in expressing willingness to use every opportunity to increase their political and practical gains, but both countries take more stringent and forthright positions than Iceland, whose Arctic policy‟s essence is cooperation and connection building. All three countries aim at positioning themselves among those countries that have the greatest influence on the development of the region.
79
Because of problems such as limited administration capabilities, high economy reliance on fishing industry, Greenland and the Faroe Islands have to prioritize their work in the Arctic Council and Arctic, both of these examples negate the complex interdependence assumption that there is no prioritization of issues. As Iceland does not seem to have its objectives organized in a specific hierarchical structure, the theoretical assumption is affirmed in the Icelandic case. Greenland, with economy geared to gain more freedom from Denmark and Arctic policies mainly concentrated on economy, would sideline with the Faroes. Moreover, Greenland concentrates far more on economy and energy considerations than on politics and as a result, the country has practically no political strategy for the Arctic region as such. Because the Arctic Council is a forum where Greenland, the Faroe Islands and Iceland promote cooperation in the region and actively seek to increase their influence in the decision- making processes in the High North, all of them acknowledge this organization as the most important forum in the region. Iceland expresses a need for a stronger organization and support a global role of the Arctic Council, as well as an extension of a number of observer status holders. The Faroe Islands seek to strengthen its own positions in the organization and in the common Danish Kingdom delegation, thus do not support any additional powers coming from outside the region. Both Iceland and the Faroe Islands reject the idea of „Arctic Treaty‟ that would make governance of Arctic into a global matter, because it would lessen the influence of these countries on the Arctic matters. Differences between the positions show regarding the Arctic 5 format, of which Greenland is a member and supports it. Iceland, not being a part of the organization, criticizes it for dissolving solidarity between the eight Arctic states and assuming the decision making powers in the region, yet it is of a vital interest for the country to be recognized as a coastal state. Regarding indigenous people, Greenland works the most actively on their rights, Iceland also shows its support while the Faroe Islands have interest in indigenous people only as much as there are common interests to join forces and issues to be solved commonly.
80
LIST OF REFERENCES
1. Literature: Monographs 1. Arter, D. Nation-building and state-building, 1809 -1944. Scandinavian Politics today. Manchester University Press, 1999. 2. Bailes, A.J.K, Cela, M., Kjartansdóttir,K., Schram, K. Iceland: small but central. Perceptions and Strategies of Arcticness in Sub-Arctic Europe. Latvian Institute of International Affairs. SIA Hansa Print Riga, 2014. 3. Bailes, A.J.K., Heininen, L. Strategy Papers on the Arctic or High North: A comparative study and analysis. Alþjóðamálastofnun og Rannsóknarsetur um smáríki, háskólaútgáfan, 2012. Retrieved from: http://ams.hi.is/wp-content/uploads/old/arctic_strategies_innsidur.pdf; last checked: 2014 04 28. 4. Buzan, B. People, States and Fear, The National Security Problem in International Relations. Department of International Studies, University of Warwick, 1983. 5. Doyle, M.W. Kant, Liberal legacies, and foreign affairs. Linklater, A. ed. INTERNATIONAL RELATIONS. VOLUME III. London and New York: Routledge, 2001. 6. Katzenstein, P.J. Flexible Adjustment in the Small European States. Small States in World Markets. Cornell University Press, 1985. 7. Keohane, R.O., Nye, J.S., Jr. Realism and Complex Interdependence, Chapter 2. Power & Interdependence, 4/E. Longman, 2011. 8. Keohane, R.O., Nye, J.S., Jr. Realism and Complex Interdependence. Contending Views of IPE. International Political Economy: State-Market Relations in a Changing Global Order, 2nd Edition. Editors: Goddard, C. R., Cronin, P., Dash, K. C. Palgrave Macmillan, 2003. 9. Miller, D. ed. Liberalizmas. Politinės Minties Enciklopedija. UK: Blackwell, 1998.
Articles in periodicals 10. Archer, C. Greenland, US Bases and Missile Defence/ New Two-Level Negotiations? Cooperation and Conflict: Journal of the Nordic International Studies Association Vol. 38(2): 125–147. SAGE Publications. 11. Bailes, J.K.A. The Faroe Islands and the Arctic: Genesis of a Strategy. Icelandic Review of Politics and Administration Vol. 9, Issue 2 (531-548), 2013. 12. Deudney, D., Ikenberry, G.J. The nature and sources of liberal international order. Review of International Studies, 1999, Nr. 25. 81
13. Dunne, T. Liberalism, International Terrorism, and Democratic Wars. International Relations, 2009. 14. Haar, E. The Liberal Divide over Trade, Peace and War. International Relations, Jun 10, 2010. 15. Rogerson, K.S. Information Interdependence: Keohane and Nye„s complex interdependence in the information age. Information, Communication & Society, 3:3. Routledge, 2010. 16. Sahni, V. Peripheric Realism versus Complex Interdependence: Analyzing Argentine and Mexican Foreign Policies since 1988. International Studies 38, 1. Sage Publications , 2001.
Conference proceedings 17. Hilmarsson, T. Energy and aluminium in Iceland. Platts Aluminium Symposium, Phoenix Arizona, January 12-14, 2003. Retrieved from https://www.institutenorth.org/assets/images/uploads/files/Energy_and_aluminum_in_Icelan d.pdf; last checked: 2015 03 26. 18. Skarphéðinsson, Ö. The trans-Arctic Agenda: Challenges of Development, Security, Cooperation. A high-level international seminar at Reykjavik, Iceland, 18-19 March 2013. Institute of International Affairs University of Iceland. Retrieved from: http://ams.hi.is/wp- content/uploads/2014/08/Arctic-brochure-A5-endurpr-28bls.pdf; last checked: 2015 04 28
2. Sources: Legal documents 19. Act on the Conclusion of Agreements under International Law by the Government of the Faroes. Act No. 80 of May 14th 2005. Retrieved from: http://www.government.fo/the- government/act-on-the-conclusion-of-agreements-under-international-law/; last checked: 2015 05 02. 20. Parliamentary Act No. 103 from July 26 1994 on Home Rule in the Faroe Islands. Retrieved from: http://www.government.fo/the-government/parliamentary-act-on-home-rule-in-the- faroes/; last checked 2015 05 02.
Reports 21. Indberetning nr. 3/2015. Rigsombudsmanden på Fęrųerne, Tórshavn, den 21. april 2015. Retrieved from: http://www.ft.dk/samling/20141/almdel/f%C3%A6u/bilag/6/1521478.pdf; last checked: 2015 05 04.
82
Internet sites of state institutions and international organizations 22. Arctic Forum Foundation. Retrieved from: http://eu-arctic-forum.org/; last checked: 2015 03 20. 23. Central Intelligence Agency. The World Factbook. Retrieved from: https://www.cia.gov/index.html /; last checked: 2015 03 21. 24. Climate Greenland. Retrieved from: http://climate-greenland.com/; last checked: 2015 03 24. 25. Government of Iceland. Retrieved from: http://www.government.is/ /; last checked: 2014 04 27. 26. Government of the Faroe Islands. Retrieved from: http://www.government.fo/; last checked: 2015 05 03. 27. Government of Greenland. Retrieved from: http:// http://naalakkersuisut.gl/kl-GL; last checked: 2015 02 22. 28. Greenland Corporate Website. Retrieved from: http://corporate.greenland.com/en/; last checked: 2015 04 13. 29. Greenland„s Prime Minister‟s Office. Retrieved from: http://www.stm.dk/_a_2747.html; last checked: 2015 05 08. 30. Icelandic Arctic Cooperation Network. Retrieved from: http://arcticiceland.is/en/; last checked: 2015 04 27. 31. Information Centre of the Icelandic Ministry of Fisheries and Agriculture. Retrieved from: http://www.fisheries.is/iceland/ /; last checked: 2015 03 27. 32. International Whaling Commission. Retrieved from: https://iwc.int/iceland; last checked: 2015 04 02. 33. Ministry for Foreign Affairs of Iceland. Retrieved from: http://www.mfa.is/; last checked: 2015 04 26. 34. Ministry of Finance and Economic Affairs of Iceland. Retrieved from: http://eng.fjarmalaraduneyti.is/; last checked: 2015 03 26. 35. Ministry of Fisheries and Agriculture of Iceland. Retrieved from: http://www.fisheries.is/; last checked: 2015 04 02. 36. Ministry of Fisheries of the Faroe Islands. Retrieved from: http://www.fisk.fo/; last checked: 2015 03 30. 37. National Energy Authority. Retrieved from: http://www.nea.is/; last checked: 2015 03 25.
83
38. SEV – the main energy supplier in The Faroe Islands. Retrieved from: http://www.sev.fo; last checked: 2015 03 30. 39. Statistics Faroe Islands. Retrieved from: http://www.hagstova.fo/en; lst checked: 2015 03 29. 40. Statistics Iceland. Retrieved from: http://www.statice.is; last checked: 2015 03 28. 41. The Faroe Islands. Retrieved from: http://www.visitfaroeislands.com/; last checked; 2015 03 31. 42. The House of Industry of Faroe Islands. Retrieved from: http://industry.fo ; last checked: 2015 03 30. 43. The IUCN Red List of Threatened Species. Retrieved from: http://www.iucnredlist.org/search; last checked: 2015 04 02. 44. The Official Gateway to Iceland. Retrieved from: http://www.iceland.is/trade- invest/fisheries/; lats checked: 2015 03 27. 45. WDC. Retrieved from: http://us.whales.org; last checked: 2015 04 02.
Arctic strategies and other official publications 46. A Parliamentary Resolution on Iceland's Arctic Policy. Retrieved from: http://www.mfa.is/media/nordurlandaskrifstofa/A-Parliamentary-Resolution-on-ICE-Arctic- Policy-approved-by-Althingi.pdf; last checked: 2015 03 12. 47. Coleman Y.D., Editor in Chief. Appendix: Greenland. Denmark, Countrywatch Review, 2014 Edition. Retrieved from: http://www.privatnurse.com/index_htm_files/Denmark2014.pdf; last checked: 2015 04 19. 48. Departement for Erhverv, Råstoffer og Arbejdsmarked (IASN) inkl. Råstofsstyrelsen (MLSA). Udenrigspolitisk Redegørelse 2014, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/ Udenrigspolitiske%20redegorelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 49. Energy statistics in Iceland, 2013. National Energy Authority. Retrieved from: http://os.is/gogn/os-onnur-rit/orkutolur_2013-enska.pdf; last checked: 2015 03 24. 50. Fælles arktisk strategi mellem Hjemmestyret og Rigsmyndighederne. Government of Greenland. Retrieved from: http://dk.vintage.nanoq.gl/Emner/Landsstyre/Departementer/Landsstyreformandens%20Dep artement_2013/Udenrigsdirektoratet/Selvstyrets_Udenrigspolitiske_Kompetencer/~/media/ DA23A81EB8214C318579C40869BB2132.ashx; last checked: 2015 04 23. 84
51. Faroe Islands Fisheries and Aquaculture. Ministry of Fisheries of the Faroe Islands. Retrieved from: http://www.industry.fo/Admin/Public/Download.aspx?file=Files%2FFiler%2FRKF%2FFO_ fisheries_and_aquaculture_final_revised.pdf; last checked: 2015 03 30. 52. Foreign policy. Coalition Agreement 2014-2018, Nuuk, 4 December 2014. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Naalakkersuisut/DK/Koali tionsaftaler/Koalitionsaftale%202014-2018%20engelsk.pdf; last checked: 2015 04 21. 53. Greenland‟s oil and mineral strategy 2014-2018, appendices. 8 February 2014. Government of Greenland, IASN-2013-093824. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Raastof/ENG/Greenland%20oil %20and%20mineral%20strategy%202014-2018_ENG.pdf; last checked: 2015 03 20. 54. Greenland‟s oil and mineral strategy 2014-2018, our mineral resources, creating prosperity for Greenland. Government of Greenland. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Raastof/ENG/Olie%20og%20mi neralstrategi%20ENG.pdf; last checked: 2015 03 22. 55. Hannesson, H.W. Iceland and the Arctic. Ministry for Foreign Affairs, Reykjavík, 26 November 2012. Retrieved from: http://www.institutenorth.org/assets/images/uploads/articles/Nor%C3%B0ursl%C3%B3%C 3%B0astefna_Alaska_2611_2012.pdf; last checked: 2014 04 28. 56. Icelandic Economic Situation Overview, March 2015. Ministry of Finance and Economic Affairs. Retrieved from: http://eng.fjarmalaraduneyti.is/media/frettatengt2015/Iceland- Economic-Situation-Overview.pdf/; last checked: 2015 03 26. 57. Icelandic Fisheries. The Official Gateway to Iceland. Retrieved from: http://www.iceland.is/files/icelandic-fisheries-press-kit-enska-30-sept-2013.pdf; last checked: 2015 03 28 58. Iceland Offshore Exploration. National Energy Authority. Retrieved from: http://www.os.is/gogn/os-onnur-rit/OS-Iceland-Offshore-Exploration-v022013.pdf; last checked: 2015 03 24. 59. Iceland„s target visitors. Northern Sights: the futre of tourism in Iceland. A perspective from the Boston Consulting Group, September 2013. Retrieved from: http://www.icelandictourism.is/servlet/file/store36/item699669/version1/report%20from%2 0bcg%20on%20the%20future%20of%20tourism%20in%20iceland.pdf; last checked: 2015 03 28.
85
60. Indledning. Udenrigspolitisk Redegørelse 2014, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/ Udenrigspolitiske%20redegorelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 61. International Handbook. Government of Greenland, Department of Foreign Affairs, 2014. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Udenrigs/InternationalHaandbog 2014_DK.pdf; last checked: 2015 03 22. 62. Kingdom of Denmark Strategy for the Arctic 2011 – 2020. P. 14. Retrieved from: http://um.dk/en/~/media/UM/English-site/Documents/Politics-and-diplomacy/Greenland- and-The-Faroe-Islands/Arctic%20strategy.pdf; last checked: 2015 03 14. 63. Multilaterale aktiviteter, Departement for Erhverv, Råstoffer og Arbejdsmarked (IASN) inkl. Råstofsstyrelsen (MLSA). Udenrigspolitisk Redegørelse 2014, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/ Udenrigspolitiske%20redegorelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 64. Rasmussen, M.H. Current Trends in the Faroese Economy. Danmarks Nationalbank Monetary Review, 3rd quarter, 2014. Retrieved from: http://www.nationalbanken.dk/en/publications/Documents/2014/09/Current%20Trends%20i n%20the%20Faroese%20Economy_Mon3-2014.pdf; last checked: 2015 03 31. 65. Rigsfællesskabets fælles udenrigs- og sikkerhedspolitik. Udenrigspolitisk Redegørelse 2014, Government of Greenland. Retrieved from: http://naalakkersuisut.gl/~/media/Nanoq/Files/Attached%20Files/Udenrigsdirektoratet/DK/ Udenrigspolitiske%20redegorelser/Udenrigspolitisk%20Redeg%C3%B8relse%202014.pdf; last checked: 2014 04 22. 66. Sustainable aquaculture. Faroe Islands Fisheries & Aquaculture. Ministry of Fisheries and Natural Resources. Retrieved from: http://www.industry.fo/Admin/Public/Download.aspx?file=Files%2FFiler%2FRKF%2FFO_ fisheries_and_aquaculture_final_revised.pdf; last checked: 2015 03 30. 67. Sveinsson, G.B. Minister for Foreign Affairs report on foreign and international affairs Thursday 19 March 2015. Retrieved from: http://www.mfa.is/media/gunnar-bragi/EN_FM- statement-to-Parliament_19.03.15.pdf; last checked: 2014 04 28.
86
68. Taxation of hydrocarbon extraction in Iceland. Iceland Offshore Exploration. National Energy Authority. Retrieved from: http://www.os.is/gogn/os-onnur-rit/OS-Iceland-Offshore- Exploration-v022013.pdf; last checked: 2015 03 24. 69. The Faroe Islands – a nation in the Arctic. Retrieved from: http://www.government.fo/foreign-relations/the-faroe-islands-and-the-arctic/; last checked: 2015 03 13. 70. Tourism Industry Policy. Ministry of Trade and Industry, Government of the Faroe Islands, Tinganes Tórshavn. Retrieved from: http://www.government.fo/media/5391/tourismindustrypolicy.pdf; last checked: 2015 03 31. 71. Tourism Strategy 2011-2020. Icelandic Tourist Board. Retreived from: http://www.ferdamalastofa.is/en/about-us/tourism-strategy-2011-2020; last checked: 2015 03 28. 72. Whaling in the Faroe Islands, October 2013. Retrieved from: http://www.government.fo/media/5343/whaling-in-brief-october-2013-1.pdf;l last checked: 2015 03 30.
Electronic sources 73. Bennett, M. Elections in Greenland and Alaska bolster Arctic natural resource extraction, 2014 12 01. Cryopolitics, Arcitc News & Analysis. Retrieved from: http://cryopolitics.com/2014/12/01/elections-in-greenland-and-alaska-bolster-arctic-natural- resource-extraction/; last checked: 2015 02 25. 74. Boersma, T., Foley, K. Dark Clouds Gather over Greenland‟s Mining Ambitions, January 16, 2015. Brookings. Retrieved from: http://www.brookings.edu/blogs/planetpolicy/posts/2015/01/16-greenland-mining-boersma- foley; last checked: 2015 03 23. 75. Casey, K. Greenland‟s New Frontier: Oil and Gas Licenses Issued, Though Development Likely Years Off, January 20, 2014. The Arctic Institute. Retrieved from: http://www.thearcticinstitute.org/2014/01/greenlands-new-frontier-oil-and-gas.html; last checked: 2015 03 16. 76. Challenging deployment of renewables in the North Atlantic, February 2015. Green Growth web magazine The Nordic Way. Retrieved from; http://nordicway.org/2015/02/challenging- deployment-of-renewables-in-the-north-atlantic/#.VRm69_ysUZM; last checked: 2015 03 30.
87
77. Dong Energy Seizes Six Blocks in Faroe Islands, 26 June 2013. Offshore Energy Today. Retrieved from: http://www.offshoreenergytoday.com/dong-energy-seizes-six-blocks-in- faroe-islands/; last checked: 2015 03 30. 78. Economical Impact. The Icelandic Association of Aliuminium Producers. Retrieved from: http://en.samal.is/hagkerfid/undirflokkur-1/nr/119; last checked: 2015 03 26. 79. EIA: Iceland Tops Europe‟s No-Carbon List, 23 September, 2014. The Independent Icelandic Eenergy Portal. Retrieved from: http://askjaenergy.org/2014/09/23/eia-iceland- tops-europes-no-carbon-list/; last checked: 2015 03 26. 80. Energy & Oil Prices. Bloomberg. Retrieved from: http://www.bloomberg.com/energy/; checked: 2015 03 23. 81. Expansion Plans. The Icelandic Association of Aliuminium Producers. Retrieved from: http://en.samal.is/hagkerfid/staekkunaraform/nr/122; last checked: 2015 03 26. 82. Faroes in smart grid first, 22 November 2012. Renewable news. Retrieved from: http://renews.biz/28171/faroes-in-smart-grid-first/; last checked: 2015 03 30. 83. Fjeldsbø, T.A.K. Faroese PM calls for independent international fisheries vote, APRIL 16. 2015. NORA Region Trends. Retrieved from: http://www.noraregiontrends.org/news/news- single/article/faroese-pm-calls-for-separate-votes-for-greenland-and-the-faroe-islands/87/; last checked: 2015 05 04. 84. Geothermal hopes in the Faroes, 14 July 2014. Nora region trends. Retrieved from: http://www.noraregiontrends.org/energy/energynews_single/article/geothermal-hopes-in- the-faroes/193/; last checked: 2015 04 02. 85. Hannestad, A. Grønland skruer ned for råstofdrømmen, nu venter de barske reformer, Grønlands nye finans- og råstofminister vil satse mere på turisme og varsler en hård reformkurs, 14 january 2015. Politiken. Retrieved from: http://politiken.dk/oekonomi/dkoekonomi/ECE2510896/groenland-skruer-ned-for- raastofdroemmen-nu-venter-de-barske-reformer/; last checked: 2015 03 24. 86. Hornby, L., Milne, R., Wilson, J. Chinese group General Nice takes over Greenland mine, January 11, 2015. Financial Times. Retrieved from: http://www.ft.com/cms/s/0/22842e82- 9979-11e4-a3d7-00144feabdc0.html#axzz3VEZAizCe; last checked: 2015 03 23. 87. Iceland and Greenland as Strategic Energy Storage for Peak Load Demand, 14 August 2014. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2014/08/14/greenaland-and-iceland-as-strategic-energy-storage-for- peak-load-demand/; last checked: 2015 04 02.
88
88. Iceland is the World Largest Energy Consumer (Per Capita), 17 November 2014. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2014/11/17/iceland-is-the-world-largest-energy-consumer-per-capita/; last checked: 2015 03 26. 89. IceLink Offers Flexibility Rather Than Baseload Power, 1September 2014. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2014/09/01/icelink-offers- flexibility-rather-than-baseload-power/; last checked: 2015 03 25. 90. Levring, P. „Simply not realistic': Greenland abandons dream of raking in oil riches, January 12, 2015. Bloomberg. Retrieved from: http://business.financialpost.com/2015/01/12/simply- not-realistic-greenland-abandons-dream-of-raking-in-oil-riches/; last checked: 2015 03 23. 91. Lieber, R.J. Politics stops at the water‟s edge? Not recently. The Washington Post, February 10, 2014. Retrieved from: http://www.washingtonpost.com/blogs/monkey- cage/wp/2014/02/10/politics-stops-at-the-waters-edge-not-recently/; last checked: 2015 02 15. 92. Major oil companies pull projects from Greenland, 14 Jan 2015. Retrieved from: http://rt.com/business/222447-oil-projects-end-greenland/: last checked: 2015 03 23. 93. Massive Structure in Greenland – Crashed Alien? Retrieved from: http://www.abovetopsecret.com/forum/thread460112/pg1; last checked: 2015 04 21. 94. Matalucci, S. Orkustofnun: Low oil prices for two years not to affect peripheral areas, 10 February 2015. Natural Gas Europe. Retrieved from: http://www.naturalgaseurope.com/iceland-oil-and-gas-barents-sea-einarsson; last checked: 2015 03 24. 95. No Oil at Brugdan II well (Faroe Islands), 27 June 2014. Offshore Energy Today. Retrieved from: http://www.offshoreenergytoday.com/statoil-completes-brugdan-ii-drilling-faroe- islands/; last checked: 2015 03 30. 96. Østhagen, A. Dimensions of Oil and Gas Development in Greenland, December 19, 2012. The Arctic Institute. Retrieved from: http://www.thearcticinstitute.org/2012/12/dimensions- of-oil-and-gas-development.html; last checked: 2015 03 17. 97. Population. The Arctic. Retrieved from: http://arctic.ru/geography-population/population; last checked: 2015 04 30. 98. Shankleman, J. Faroe Islands reveals power of 'world's first' smart grid, 22 November 2012. BusinessGreen. Retrieved from: http://www.businessgreen.com/bg/news/2226500/faroe- islands-reveals-power-of-worlds-first-smart-grid; last checked: 2015 03 30.
89
99. Sustainable whaling. Whales and whaling in the Faroe Islands. Retrieved from: http://www.whaling.fo/en/sustainable/sustainable-whaling/; last checked: 2015 03 30. 100. The Continental Shelf Project. Retrieved from: http://a76.dk/lng_uk/main.html; last checked: 2015 04 24. 101. Thule Air Base. Encyclopedia Britannica. Retrieved from: http://www.britannica.com/EBchecked/topic/173672/Thule-Air-Base; last checked: 2015 04 21. 102. UK Affirms Interest in IceLink Interconnector, 2 March, 2015. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2015/03/02/uk-affirms- interest-in-icelink-interconnector/; last checked: 2015 03 25. 103. World Class Wind Efficiency, 18 march 2015. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2015/03/; last checked: 2015 03 24. 104. World‟s Largest Electricity Producer per Capita, 4 June 2012. The Independent Icelandic Energy Portal. Retrieved from: http://askjaenergy.org/2012/06/04/worlds-largest- electricity-producer-per-capita/; last checked: 2015 03 24.
Other sources 105. Degeorges, D. Denamrk, Greenland and the Arctic, Challenges and opportunities of becoming the meeting place of global powers. Retrieved from: http://forsvaret.dk/fak/publikationer/briefs/documents/denmark-greenland-and-the- arctic.pdf; last checked: 2015 02 13. 106. Gorbachev, M. Speech in Murmansk at the ceremonial meeting on the occasion of the presentation of the order of Lenin and the gold star to the city of Murmansk, 1 Oct. 1987. Retrieved from: http://www.arctic.or.kr/files/pdf/m2/m22/1/m22_1_eng.pdf; last checked: 2015 04 30.
90