Canada's Record as Arctic Council Chair

Canada’s Record as Arctic Council Chair

Diego Creimer | Communications Officer | 514-999-6743 | [email protected] greenpeace.ca/media Twitter : @GreenpeaceCA @GreenpeaceQC

When Canada first stepped up to chair the Arctic Council in May 2013 the government claimed that the theme of its chairship would be “development for the people of the North” and that “Canada’s chairship would put northerners first.”[1] While the people of the north were spotlighted in the Canadian government’s PR materials, and there was some positive movement on important issues such as mental health and black carbon, under Canada’s leadership the Arctic Council has pursued several initiatives and policies that show the real themes of the Canadian chairship were promoting the interests of big business, disempowering northerners, and opposing serious action on climate change. Canada did this through the creation of the Arctic Economic Council, refusing to take action to reduce CO2 emissions, and promoting the extraction of ‘unburnable’ Arctic oil and gas. In Canada, the government’s domestic policy towards the Arctic also showed the same themes.

The Arctic Economic Council: a new lobbying arm of the oil industry The Arctic Economic Council (AEC) was intended to be the centerpiece of the Canadian Chairship: a circumpolar business forum focused on small and medium enterprises and Indigenous businesses. At least that’s what the Canadian government was telling public at the beginning of 2014.[2] But when the rules and membership of the AEC were announced later in the year, it became clear that the AEC would actually serve as a lobbying body for big business interests from outside the Arctic, particularly oil and other extractive interests. The AEC is currently made up of 35 representatives, with 21 of these being nominated by the Arctic states and 14 by the Arctic Council Indigenous Permanent Participants. [3] There were no clear criteria provided to the public for the choice of nominations. Of the 21 state nominees, there appear to be only three that are small- or medium-sized northern-owned businesses.[4] In terms of sectors represented by the Arctic states’ nominees, eight are national industry associations, the majority of which include in their memberships significant oil industry interests,[5] seven are companies from or connected to the oil and gas sector,[6] four are companies from or connected to the mining sector,[7] one is a communications company,[8] and one is a tourism company.[9] The majority of the 21 state nominees either represent or are themselves companies from the oil industry.


AEC members include Russian oil giant Rosneft, Norwegian Oil & Gas (their national industry association), and Fairweather LLC, an Alaskan subsidiary of Edison Chouest Offshore (ECO), a multibillion dollar Louisiana-based marine transportation conglomerate that, according to Fairweather’s website, “has made a major commitment to support exploration and production activities in the Arctic.” ECO’s operations in Alaska are headed by Rick Fox, a former Shell employee of 35 years, and ECO was towing Shell’s infamous drilling rig the Kulluk when it crashed ashore off the coast of Alaska at the end of 2012.[10] The Chair of the AEC is the CEO of Baffinland Iron Mines, a 50-50 joint venture of ArcelorMittal, the world’s largest manufacturer of steel, and another company belonging to The Energy and Minerals Group, a multibillion dollar Texas-based private investment firm specializing in energy and minerals. The Energy and Minerals Group has investments in US fracking operations, and happens to be run by the son of former ExxonMobil CEO Lee Raymond.[11] It’s pretty clear from these facts that the AEC is being used to promote the interests not of northerners, but non-Arctic business interests, and the oil industry in particular. While the businesses initially included in the AEC were selected by the Arctic states and Permanent Participants, who each got to select up to three businesses, from now on the AEC will be an independent body accountable to no one but itself, and representing the interests of no one but its own member companies. The AEC selects its own membership and determines its own activities, without being accountable to the Arctic Council or any other body. One of the AEC’s priorities will be “responsible resource development”, which those familiar with Canadian politics will recognize as a euphemism for fossil fuel and mineral extraction, especially oil.[12] The Arctic Economic Council has drawn criticism from many, including former Canadian Minister of Foreign Affairs Lloyd Axworthy and Mary Simon, a prominent Inuit leader and lead negotiator in the founding of the Arctic Council. They warn that the AEC threatens to undermine and supplant the Arctic Council, and in so doing shift Arctic governance away from the public sphere and into the hands of business interests. They believe the AEC may be part of an intentional effort to remove consideration of environmental and climate issues from international Arctic governance, and that the AEC could provide multinational corporations with preferential access to Arctic policy makers.[13]

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What’s more, it is scandalous that the AEC finds itself fully funded within a few months of being created, while the Indigenous Permanent Participants of the Arctic Council still struggle for funding to fully participate in the Arctic Council’s activities. [14] The AEC was a bait and switch. Under the guise of promoting small and medium-sized Arctic businesses, Canada has used the Arctic Economic Council to provide direct access for big business to Arctic decision makers in order to promote unsustainable and irresponsible resource extraction.

Making Climate Change Worse


Under Canada’s leadership the Arctic Council has not only failed to take serious action to address one of the most serious threats facing the region and its inhabitants, climate change, but it has taken decisive action to make climate change worse. While there has been some positive movement on addressing black carbon and methane emissions, the Arctic Council has so far refused to address the most important greenhouse gas (GHG), which accounts for 76% of annual global GHG emissions, CO2.[15] This despite the fact that the Arctic Council is well positioned to address the problem, as the Arctic states are themselves responsible for approximately 25% of annual global CO2 emissions, and when observer states are included the Arctic Council states are responsible for roughly 80% of annual global CO2 emissions. [16] This failure has been criticized by all six of the Arctic Council’s Indigenous Permanent Participants, who in a September 21, 2014 open letter reminded the Canadian Chair of the Arctic Council’s commitment to limit global warming to below 2 degrees Celsius, highlighted Arctic states’ lack of action to reduce CO2 emissions, and called on the Arctic states to “elaborate a specific course of action on mitigation of carbon dioxide emissions that will be adopted by all Arctic Council member states as a firm commitment.”[17] What’s more, the Canadian Chair’s promotion of offshore Arctic oil extraction, through the AEC and other channels, threatens to make climate change much worse and eliminate any chance of achieving the 2 degree target. This is because there’s a limited amount of fossil carbon that humanity can put into the atmosphere if warming is to be kept below 2 degrees Celsius. During Canada’s Chairship two separate independent

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analyses were released looking at what sticking to this carbon budget means for the oil and gas industry, one in Nature and the other from oil and gas consultancy Rystad Energy. Both studies indicate that Arctic oil and gas should be considered unburnable in a 2 degree world.[18] The Canadian Chair has ignored the voices of Arctic Indigenous peoples and the policy implications of the latest research on fossil fuels and climate change, choosing instead to allow dangerous amounts of CO2 to be emitted and promote an extractive resource agenda in the Arctic that all but ensures global warming will exceed the 2 degree limit Canada and the Arctic Council have agreed to.


The record at home: undermining Arctic Council goals Despite the government’s claims at the Arctic Council about putting “northerners first” and promoting development in the interests of northerners, at home the Canadian government has pursued many Arctic policies in total contradiction to these stated goals:  Forcing oil projects on Canadian Inuit: the federal government and Arctic Council

chair Leona Aglukkaq have supported oil exploration in the waters off Baffin Island, despite unanimous opposition from Baffin Inuit.[19] This is development for the oil industry, at the expense of northerners.  Disempowering Canadian Inuit: between 2012 and 2015 Canada cut funding to

political organizations representing Inuit by 71%.[20] The national organization representing Canadian Inuit, Inuit Tapiriit Kanatami (ITK), blasted the Canadian government’s actions, with Inuit Circumpolar Council Canada (ICC Canada) President and ITK Vice-President Duane Smith stating that “at a time when Canada is hosting the Arctic Council… I find it inconsistent and unconscionable that this same government would seek to reduce Inuit collaboration on projects and weaken efforts to develop vibrant, healthy communities.”[21]  Nutrition North scandal: Nutrition North was a program begun in 2011 by the

Canadian government to subsidize northern food retailers and suppliers, with the stated goal of improving northerners’ access to nutritious food by making it cheaper. Right from the start there were widespread concerns that the program would benefit

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businesses rather than northern consumers, and not actually change the price of food. Ignoring these concerns the federal government stood by the program for years until at the end of 2014 there was a media scandal in which it came to light that because of high food prices Canadian Inuit were being forced to scavenge garbage dumps for sustenance, and the Canadian Auditor General released a report criticizing Nutrition North extensively. Among the Auditor General’s concerns were that eligibility for the program was not based on need, and that the government had no way to tell whether subsidies were actually being passed on by businesses to their customers. The Canadian government was then forced to acknowledge the program has problems, but Leona Aglukkaq, Canada’s Arctic Council Chair and the Minister responsible for the Canadian Northern Economic Development Agency, has tried to insist the fault lies with businesses, rather than the design of the program, stating that it’s the responsibility of the retailers (rather than the government) “to ensure that the federal subsidy is being passed on to the consumers.”[22]  Militarization and confrontation in the Arctic: departing from a multilateral and

collaborative approach in the Arctic, Prime Minister Harper directly intervened in Canada’s territorial submission to UNCLOS to insist that the North Pole be included, despite expert opinion that Canada’s claim would be quite weak and the prospect that the North Pole claim could harm relations and lead to territorial disputes with other Arctic nations. The motivation for the move appeared to be scoring political points with domestic audiences.[23] The Canadian government has also pushed to have the Canadian Arctic patrolled by military ships despite the opinion of many experts that Coast Guard patrol would be cheaper, more appropriate and more effective. [24] –30– For more information: Diego Creimer, Communications officer, 514-999-6743, [email protected]

[1] http://www.international.gc.ca/arctic-arctique/chairship-presidence.aspx?lang=eng [2] http://www.ipolitics.ca/2014/01/29/arctic-economic-council-will-not-become-large-corporationtask-force-chair/ [3] http://arcticeconomiccouncil.com/about-us/representatives/

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[4] Peter’s Expediting Ltd., Lapland Safaris, and Bering Straits Native Corporation. [5] Federation of Icelandic Industries, Icelandic-Arctic Chamber of Commerce, Confederation of Danish Industry, Danish Shipowners’ Association, Norwegian Shipowners’ Association, Norwegian Hospitality Association, Norwegian Oil and Gas, and Russian Federation of Chambers of Commerce & Industry. [6] ATCO Group, Arctia Shipping Ltd., Joint Stock company SOVCOMFLOT, Rosneft Oil Company, Fairweather LLC, Crowley Marine Services, and Bering Straits Native Corporation. [7] Baffinland Iron Mines, Peter’s Expediting Limited, Agnico Eagle Finland, and LKAB. [8] Ericsson Canada Inc. [9] Lapland Safaris [10] http://www.fairweather.com/news/rick-fox.html ; http://www.akbizmag.com/Alaska-BusinessMonthly/October-2013/Chouest-Appoints-Fox-to-Lead-Alaska-Operations/; http://www.nytimes.com/2015/01/04/magazine/the-wreck-of-the-kulluk.html [11] http://www.baffinland.com/about-us/company-history-2/?lang=en; http://www.worldsteel.org/statistics/top-producers.html; http://www.baffinland.com/uncategorized/baffinland-in-mining-north/?lang=en; http://www.emgtx.com/about.html; http://www.wsj.com/articles/energy-investor-bets-on-aubreymcclendons-second-act-1416870833. [12] http://www.arctic-council.org/index.php/en/document-archive/category/496-sao-meeting-inyellowknife-canada-march-2014?download=2255:final-report-sao-meeting-yellowknife-march-2014 [13] http://www.theglobeandmail.com/globe-debate/is-canada-undermining-the-arcticcouncil/article23273276/ [14] http://www.nunatsiaqonline.ca/stories/article/65674baffinland_ceo_tom_paddon_to_chair_arctic_eco nomic_council/ [15] https://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_summary-forpolicymakers.pdf, 6. [16] http://data.worldbank.org/indicator/EN.ATM.CO2E.KT/countries [17] http://www.arctic-council.org/index.php/en/document-archive/category/548-8-0-otherbusiness?download=2340:8-1-letter-from-permanent-participants-on-climate-change-mitigation [18] http://www.abcnyheter.no/files/rystad_energy.pdf ; http://www.nature.com/nature/journal/v517/n7533/abs/nature14016.html [19] http://www.cbc.ca/news/canada/north/ottawa-greenlights-arctic-offshore-seismic-tests-over-inuitobjections-1.2688040 [20] http://aptn.ca/news/2015/01/13/aboriginal-organizations-hit-60-million-worth-cuts-inuit-facedsteepest-reduction-afn-analysis/ ; http://www.nunatsiaqonline.ca/stories/article/65674national_inuit_org_complains_about_cut_to_proje ct_funding/ [21] https://www.itk.ca/media/media-release/30-cut-program-funding-national-inuit-organizationinconsistent-federal-arctic [22] http://aptn.ca/news/tag/nutrition-north/ ; http://aptn.ca/news/2015/02/03/aglukkaq-says-northernretailers-responsible-passing-food-subsidy/

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[23] http://www.cbc.ca/news/politics/stephen-harper-s-north-pole-bid-caught-bureaucrats-bysurprise-1.2829243 ; http://thechronicleherald.ca/opinion/1260127-north-pole-not-ours-despiteharper%E2%80%99s-bluster [24] http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2013/04/Ti tanic_Blunder.pdf; http://www.thesimonsfoundation.ca/sites/all/files/Arctic%20patrol%20vesselsmilitary%20or%20civilian,%20combat%20or%20constabulary%20rolesDAS,%20March%2014%202014_1.pdf; http://www.theglobeandmail.com/news/national/the-navysarctic-ambition/article23290380/

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