War In Ukraine Freezes The Arctic Council: How Will Asia Break The Ice? – Analysis

By Nong Hong*

The Ukraine crisis has changed the world in many ways, one of which is the functionality of the Arctic Council, a forum that Russia currently chairs. The decision by the other seven council members in March last year to stop joining its meetings is a grave impediment to international cooperation in the Arctic.

Concerns have also been raised over the role of the observer states, including China, Japan, South Korea, Singapore and India.

Climate change has made the Arctic and its potential resources more accessible. This has changed the geopolitical landscape, and more countries are now focused on the Arctic, including in distant Asia. For China, Japan, South Korea, Singapore and India, their observer status ensures that they are involved in determining the future of the Arctic, a region they believe will affect their economic interests and the environment.

After these five states were granted observer status in May 2013, South Korea was the first to release an official Arctic policy, updating it five years later in 2018. Japan, whose Arctic initiatives were first documented in its 2013 Basic Plan on Ocean Policy, put out its official Arctic Policy in October 2015.

China issued its Arctic Policy white paper in January 2018, articulating its interest in, among others, Arctic governance and resources, shipping opportunities and polar research. Singapore has released no official policy but its interest in Arctic governance is known, given the Northern Sea Route’s potential challenge to Singapore’s shipping hub status, and the island nation’s concerns about melting sea ice.

Finally, in March last year, India published its long-awaited Arctic policy, showing an understanding of the major tendencies in Arctic geopolitics and business.

For all five Asian states, the Ukraine crisis has not just changed their engagement in the Arctic region but also with Russia. After the 2014 Crimea crisis strained Russia’s relations with the West, Moscow has viewed Beijing as its primary source of capital for Arctic development.

With the Ukraine crisis, Beijing has been trying to maintain a degree of non-alignment. But with China being seen as giving Russia an economic lifeline amid Western sanctions, some Chinese state banks have limited their financing of the purchase of Russian commodities.

A likely scenario is that China will be able to maintain some energy imports but at a lower level. Under the threat of sanctions and amid transport uncertainties, Chinese companies providing modules to Russia’s Arctic LNG 2 project in northern Siberia have had to stop work for eight months.

Compared to China, less discussion has been devoted to the responses of Japan and South Korea. In light of the sanctions on Russia, none of the three countries, which have a common interest in shipping through the Arctic, conducted a single voyage through Russia’s Northern Sea Route last year. But Japan, which is highly dependent on energy imports, has kept its stake in the Sakhalin-1 LNG project with Russia.

Meanwhile, there is growing recognition among Russian decision-makers that what Russia offers China is no longer indispensable – China can find alternative cooperation partners with other Arctic states.

But Russia may also seek investment from other Asian states – for instance, India. The Indian government has appeared eager to take advantage of “distress sales” of Russian energy assets, such as when ExxonMobil decided to give up its stake in the Sakhalin-1 project. India has long wanted to reduce its dependence on energy imports from the Middle East.

India’s Arctic policy has taken an unmissable geopolitical turn since late 2017, evolving from a largely science-only approach to committing itself to the development of the Northern Sea Route, primarily to supply Russian energy to India.

Whatever their losses or gains, the five Asian states face similar questions on their role in the Arctic Council, whose consensus-based governance structure no longer functions. Will a hotly debated “Arctic Council 2.0” gain support among non-Arctic states with a deep interest in Arctic governance?

Will these Asian observers – which have growing Arctic interests and have contributed much to Arctic research – welcome the opportunity to establish a more solid role in this region’s affairs? How will they adapt to a changing Arctic Council?

Whether the Arctic Council can continue its work on environmental protection and sustainable development without Russia’s participation remains debatable, given the decades-long tradition of scientific collaboration between nations in this region, which include Russia.

The Arctic Council, despite uncertainty, has developed a way of working where it was able to catalyse legally binding agreements between the Arctic states and with non-Arctic states. These agreements include one on search and rescue in 2011, on oil spills in 2013, on scientific cooperation in 2017, and on a polar code in 2017. In 2021, an agreement to prevent unregulated commercial fishing in the central Arctic Ocean came into force, binding countries such as China, South Korea and Japan.

Importantly, the Arctic Council is still the only permanent forum for cooperation in the region and has played an important role in protecting its environment and promoting sustainable development.

The observer states have remained active and continue to articulate their official strategies and to pay senior-level official visits to the region. But scholarship in these states needs to move beyond questions on their role in the changing Arctic Council, and start to examine their engagement in a globalised Arctic in flux.

*About the author: Nong Hong, Executive Director & Senior Fellow Head, Maritime Affairs Program

Source: This article appeared at ICAS and was originally released on South China Morning Post on February 25, 2023.