Norway's Policy in the High North - the Arctic Dimension

Troms�, 21.01.2008

Ladies and gentlemen,
Let me, on behalf of the Foreign Minister express my appreciation of this opportunity to be with you here in Troms�.

I can think of no better venue for this conference. Not only has Troms� traditionally been Norway's gateway to the Arctic. It is also our key political and scientific centre in the High North.

A month after taking office, in November 2005, the Foreign Minister delivered his first major policy address on the High North here in Troms�. And in December 2006 the Norwegian government launched its strategy for the High North. Here in Troms�. Both events underscore that the High North has top priority in Norwegian foreign policy.

Arctic Frontiers has already established itself as an important conference. I would like to thank the organisers for bringing together such a distinguished group of participants - policy-makers, scientists and businesspeople - to share their perspectives and generate new ideas on developments in the Arctic.

The power of ideas and their effect on action and practice are not always appreciated. But as Victor Hugo reminds us, there is nothing more powerful than the idea whose time has come. As regards global climate change, I believe that time is now.

Developments in the Arctic entail both a serious warning and a call to action. Climate change is happening twice as fast in the Arctic as elsewhere on the globe, leaving no doubt that it is man-made, serious and accelerating and that it can only be halted if we act swiftly.

The Arctic is getting warmer and wetter; snow, ice and permafrost are melting; ocean levels are rising and seawater is becoming less saline and more acidic; and the ozone layer is thinning and ultraviolet (UV) radiation is increasing.

To use a metaphor from the fossil fuel business, in a global perspective the Arctic plays the role of the canary in the coal mine. The world must heed its call made by the Intergovernmental Panel on Climate Change (IPCC), the Arctic Climate Impact Assessment (ACIA) and the great communicator on climate change, Al Gore.

Recent observations indicate that we may be underestimating the pace of the changes in the Arctic. Climate change appears to be a self-reinforcing process and we do not know its precise outcome, neither in the Arctic region nor on a global scale.

What we do know, however, is that climate change could have a number of unintended consequences for ecosystems and livelihoods in the Arctic.
But the changes will reach far beyond the Arctic.

We know that it is the global South that will be most adversely affected by climate change. Hundreds of millions of people will be facing water shortages, hunger and coastal flooding as the world warms.

The fact is that the greatest costs of global warming will be borne by the poor who have the least responsibility for the current state of affairs. This also makes climate change a central issue of justice and ethics in world politics today.

There is a growing consensus that climate change is the greatest challenge of our time. The outcome of the Climate Change Conference in Bali - despite its weaknesses - demonstrates this consensus.

A credible, robust post-Kyoto negotiating process is now crucial. The roadmap from Bali must lead us to a new agreement in Copenhagen in 2009, for post 2012.

Two degrees. Our common objective in these negotiations must be to ensure that global temperatures rise by no more than two degrees.

Ladies and gentlemen,
The Arctic Ocean stands at the threshold of significant changes. The rapid melting of the ice cover will have significant implications for vulnerable ecosystems and economic activity.

Firstly, Arctic climate change will alter the flora and fauna of the region. With serious consequences, not least for indigenous peoples. Traditional reindeer herding and the way of life of these groups of people will be harder to sustain.

Secondly, Arctic climate change will impact the location, distribution and migration of fish stocks. This could have significant effects on commercial fisheries. Some stocks may move from the coastal jurisdiction of one state to that of another. Others may move outside the jurisdiction of any state, which could impede sound fisheries management and lead to uncontrolled harvesting.

Thirdly, melting ice will affect maritime transport in the Arctic by extended navigation period and new shipping routes. Less sea ice could also open new areas to the exploitation of petroleum and other natural resources.

The new situation poses us with new questions regarding the governance in the Arctic. As well as of the law.

How should the Arctic be governed and by whom? Are we witnessing a race for the Arctic? Is there an adequate international legal regime governing the Arctic? Or is the melting ice revealing a similar fluidity of legal norms and boundaries - or even a terra nullus?

These are questions that need to be raised - and their answers must be based on thorough knowledge.

Thus, In October last year my Government invited legal advisors from the five coastal states bordering the Arctic Ocean to a meeting in Oslo. To discuss the law of the Arctic as it applies in todays realities.

Their conclusion was that, for the time being, there is no need for a new legal regime for the Arctic.

The UN Convention of the Law of the Sea is a cornerstone in the legal regime - also so for the Arctic Ocean. It contains detailed provisions on the rights, duties and responsibilities of states to promote the peaceful uses of the seas and oceans, and to safeguard environmental considerations.

The Convention on Biological Diversity is another global agreement that is applicable to the Arctic and essential for the preservation of genetic and species diversity.

An example of a highly successful regional agreement is the Polar Bear Agreement. It was signed in 1973 when the five coastal states bordering the Arctic Ocean joined together to promote the conservation of polar bears. 35 years on this agreement still remains in force and may prove invaluable in meeting current challenges.

The UN Fish Stock Agreement obliges states to cooperate in the management of straddling fish-stocks. In the Arctic region, there are several such fisheries management organisations with the North East Atlantic Fisheries Commission (NEAFC) as a prime example. It recently increased its focus on the precautionary principle and an ecosystem-based approach to fisheries management.

We find similar agreements in the Northwest Atlantic: the Northwest Atlantic Fisheries Organisation (NAFO). I would also like to highlight the Norwegian-Russian bilateral cooperation on managing the important fisheries resources in the Barents Sea.

The International Maritime Organization and its guidelines on navigation in ice-covered areas is yet another element to complete the picture of the legal situation in the Arctic.

Allow me to dwell on this: there is no fundamental uncertainty about how the Arctic is to be governed.

And let me be even more explicit: the planting of a Russian flag on the seabed of the North Pole last year sparked a debate over an alleged race for the Arctic. But it did not alter the rules and legal norms.

The flag-planting was a symbolic act of no legal standing or material consequence. What matters is that states play by the book if they lay claim to continental shelves in the Arctic beyond 200 nautical miles. And the book they need to play by is the UN Convention on the Law of the Sea and the rules it sets out.

So, according to the UN Convention on the Law of the Sea, coastal states automatically have a continental shelf extending to an outer limit of 200 nautical miles (377 km) unless it overlaps with that of a neighbouring state. In such cases there is a need to reach agreement on a delimitation line, as for example between Norway and Russia in the Barents Sea.

In many cases, however, states have continental shelves that extend even further. In such cases the coastal state must submit documentation of this to the Commission on the Limits of the Continental Shelf.

This New York-based Commission is neither a political body nor a court, but a group of experts in the field of geology, geophysics or hydrography.

Russia made its claim to the continental shelf beyond 200 miles in the Arctic in 2001. The North Pole was included in that claim. The Commission is reviewing the Russian claim, and has reportedly asked for additional documentation.

Norway submitted its claim in November 2006. According to our documentation, Norway's continental shelf does not extend to the North Pole, but to approximately 84 degrees 41 minutes North.

The other coastal states in the Arctic, Denmark, Canada, and the United States, have not yet submitted their claims. For the Americans to do so, however, the US would first have to accede to the Law of the Sea Convention.

We agree with the legal experts of the five coastal states bordering the Arctic Ocean: there is no need for a new legal regime for the Arctic in order to improve governance in the region. The crux is thus - here as often in international law - not new law but effective implementation of existing law.

And then we should always be open to consider new mechanisms for cooperation, if future developments so warrant.

As a coastal state Norway, is responsible for managing vast areas of ocean in the Arctic. We take this responsibility very seriously. Preserving eco-systems and ensuring the sustainable use of resources are core principles of all relevant Norwegian legislation and policy.

These principles guide our approach to national petroleum legislation as well as to the fight against illegal, unreported and unregulated fishing and to Norway's extensive maritime research activities.

Ladies and gentlemen,
The Arctic Council is a key institution for dealing with Arctic issues, as it is the only regional forum that includes all eight Arctic states and representatives of six indigenous peoples.

The system of "permanent participants" gives the indigenous peoples of the Arctic an opportunity to address the governments of the Arctic countries on an equal footing. This cooperation is of great benefit to the governments in the Council and, we believe, to the indigenous peoples themselves.

When Norway took over after Russia as chair of the Council in October 2006, we set three main priorities for our chairmanship: integrated resource management, climate change and a strengthened organisational structure.

All the Arctic countries have a long and rich tradition of managing natural resources in this region. The exchange of experience and knowledge is vital in order to develop a common, integrated and ecosystem-based approach to sustainable resource management throughout the Arctic.

Our newly launched project on best practices in oceans management in the Arctic is a response to the need to learn from each other and increase the level of sustainability in regional resource management. I urge all Arctic states to take active part in this project.

The climate change challenge has disclosed disagreement between the eight Arctic states on how to deal effectively with the changes.

However, we agree that our policy in this area should be based on sound scientific knowledge. This is why we launched the Arctic Climate Impact Assessment (ACIA) process. We need higher data resolution for all parts of the Arctic and we need better scenarios.

Deeper knowledge may give us the necessary mileage toward agreement on joint action.

The Arctic Council is now preparing a major new project on the Arctic cryosphere. It will deal with the retreat of sea ice, the melting of the Greenland ice sheet and the reduction of permafrost and snow cover.

These are major Arctic developments with important global consequences. I am confident that the scientific reports from this project will provide valuable input both to the UN Climate Change Conference in 2009 and to the IPCC's fifth assessment report, due in 2013.

We have high ambitions for Norway's chairmanship of the Arctic Council and want our work to be closely coordinated with the subsequent chairmanships of both Denmark and Sweden. This will ensure continued focus on the same priorities for at least a six-year period, and will also facilitate the development of an institutional memory in an organisation that has no permanent body.

With this in view, we have established a secretariat in Troms� for the period of the Scandinavian chairmanships. The secretariat has been up and running since last August.

Ladies and gentlemen,
The theme of this conference, Oil and Gas - Political, Social and Scientific Challenges in the Arctic, reflects the growing importance of Arctic waters as a petroleum producing area. In an era of high energy prices, advanced offshore technologies and growing concerns about energy security, there is optimism about the resource potential of the Arctic.

Some of this optimism is based on rather uncertain estimates by the U.S. Geological Survey suggesting that the Arctic may hold up to a quarter of the world's remaining hydrocarbons. However, the optimism is also based on actual discoveries and development projects in the Barents, such as the Sn�hvit and Shtokman gas fields and the Prirazlomnoye oil field.

But the availability of supply in the Arctic also gives rise to caution. The Barents Sea is one of the cleanest, richest and most productive marine areas in the world and a pantry of fish for most of Europe. As petroleum exploration and production expand into the Arctic one of the challenges we face, is how to maintain the qualities of the Barents Sea.

Norway subscribes to the highest possible standards of health, safety, and the environment (HSE) and has adopted an integrated management plan for our northernmost waters. The plan takes a comprehensive, step-by-step approach to the development of petroleum resources in the High North.

The Integrated Management Plan seeks to preserve the ecosystems of northern waters within a framework that allows for the coexistence of petroleum activities, fisheries and maritime transport. The plan provides for ecosystem-based management and both presupposes and requires extensive knowledge about the marine environment of the Barents Sea. It is therefore being followed up by large-scale scientific research programmes.

There is no denying, however, that while Norway's production of oil and natural gas has been well schooled in sustainable development and is relatively clean, it is still contributing to the global climate crisis.

With the emergence of climate change as an urgent global political priority, the Norwegian Government has signalled that it will lead the efforts to mitigate the negative effects of oil and gas production. We have set ourselves a two-pronged target: to strengthen Norway's role as a provider of both energy security and climate security.

On the one hand, we will strive to produce more of the fossil fuels that the world will need in the decades to come. On the other hand, we will seek to be among the most advanced and committed nations when it comes to minimising the greenhouse gas emissions.

Speaking in Oslo last February, EU Trade Commissioner Peter Mandelson said that Norway's approach to energy and climate "sounds like a paradox, but is in fact profound insight."

Paradox or profound insight?
It is certainly a dilemma. But Norway's dilemma is also the world's dilemma and it must be dealt with as such. The relevant questions are not whether measures should be taken, but rather what type, how much and when.

We must craft the next climate agreement in such a manner that it also engages the developing world. To do so, however, we - the industrialised countries - must meet the twin challenges of cutting our own emissions while at the same time providing assistance to developing countries so that they can grow along a much less carbon intensive path than we have done.

We must do so by limiting our own emissions and by developing and diffusing new technologies that can serve that purpose on a global scale.
Norway wants to play a leading part in the international effort to "bend the trends" that are changing the global climate.

Let me sum up the three targets we have set for ourselves:
First, we aim for a 30% reduction in carbon emissions by 2020. 2/3 of this reduction will be taken within Norway.

Second, by 2012 - the end date of the first Kyoto commitment period - we aim to reduce our emissions by an additional 10% on top of our initial Kyoto Protocol commitments.

Third, looking further ahead, our overriding goal is to make Norway carbon neutral by 2030.

A broad set of measures - political, economic and technological - will be needed to reach these goals. The Norwegian experience shows that environmental regulations and taxation can spur technological innovation and make business more, not less, competitive in world markets.

The Norwegian oil industry has demonstrated the ability to integrate new technology that ensures cleaner or more sustainable production. It will have to continue on this path if we are to succeed at Mongstad in developing a full scale carbon capture and storage (CCS) project and making a contribution towards "decarbonising" the global energy mix.

Ladies and gentlemen
The resources of the Arctic must be put to good use, so that they contribute to sustainable livelihoods today while also preserving nature's riches for future generations. This is the objective of Norway's integrated management plan for the Barents Sea. Since marine ecosystems tend to ignore national borders, we would like to see a similar plan or approach adopted for the whole of the Barents Sea and the entire North Atlantic. This is why we are taking the principles of the integrated management plan as our point of departure in bilateral and multilateral discussions about the sustainable harvesting of marine resources.

The most serious threat to the fisheries resources in the North Atlantic today is illegal, unreported and unregulated fishing. Such fishing could lead to stocks being overexploited and severely depleted. Estimates indicate that 100 000 tonnes of cod at a first hand value of approximately 200 million euros are caught illegally in the Barents Sea each year. This corresponds to one fourth of the total allowable catch.

We have a common interest in putting an end to this criminal activity, which is undermining the future development of joint fish stocks and the future of honest fishermen. Norway is doing its utmost to deal with this problem. This includes control at sea, reporting routines, and control at landings.

However, the problem is that illegal, unreported and unregulated fishing and related transhipment activity are to a large extent carried out in waters beyond the jurisdiction of any coastal state.

So what is to be done to stop the illegal fishing?
The key is international cooperation on port state control and flag state responsibility. We are very pleased with the decision of the Northeast Atlantic Fisheries Commission (NEAFC) last November to adopt binding rules concerning port state control which will enter into force on May 1st this year.

We are also working actively with the EU and others to promote negotiations within the FAO on a legally binding regime on port state control. This would be a huge step forward.

Together with Russia, moreover, we have launched an initiative for port state control and inspection in major European capitals. We have also concluded bilateral control agreements with other relevant states.

Preservation of the marine environment means that accidents must be avoided. Safety at sea is essential. We are working constantly to improve the safety situation in the Barents Sea. An important step was taken when the International Maritime Organisation (IMO) approved Norway's proposed maritime routes outside its territorial waters between Vard� and R�st in December 2006.

The effect is that all ships now have to sail further off the coast, thus reducing the risk of damage to the vulnerable Arctic coast in case of spills or other accidents.

Russia actively supported this measure, which reflects the good cooperative relations between Norwegian and Russian authorities in the area of safety at sea.

Last year, Det Norske Veritas (DNV) launched a project, supported by the Norwegian Government, aimed at identifying best international practices with regard to standards of health, safety and environment (HSE) in petroleum and shipping operations in the Barents Sea. The project involves both the Norwegian and the Russian petroleum and shipping industries. It has been well received in Russia, and we believe that it will serve to promote progress on health, safety and environment throughout the Barents Sea.

Ladies and Gentlemen,
Let me expand on this and say a few words about Norwegian-Russian relations.

"We can only ensure sustainable use of resources and sound environmental management in the Barents Sea with Russia's engagement and Norwegian-Russian cooperation."

This direct quote from the Norwegian Government's High North Strategy is both a statement of fact and a guide to action.

Norway and Russia share the Barents Sea and many of the sustainability challenges of the High North. If we are to maintain the northern seas as some of the cleanest, richest and most productive marine areas in the world, our two countries must expand our cooperation with regard to the harvesting of fish stocks, exploration, production and technological developments in the petroleum sector, and the adoption of health, safety and environment (HSE) standards in petroleum operations and maritime transport.

This is the basis on which Norway seeks to engage Russia. For reasons of geography, geology and ecology, we need to manage our relations with Russia in a way that makes our neighbour part of the solution to the sustainability challenges of the High North.

President Putin has called for a strategic energy partnership between our two countries in the High North, and successive Norwegian governments have accepted the invitation. Recently, Gazprom invited StatoilHydro to participate in the development of the Shtokman field together with the French company Total. This is a sign of the energy partnership that is taking shape, a partnership that will supplement the dialogue and cooperation between our two countries in areas such as fisheries, the environment and nuclear safety. I see such cooperation arrangements between Norway and Russia as the best guarantee of the safe, stable and reliable development of the Barents Sea in the years to come.

Thank you for your attention.