• 2022 September 6

    Foreigners sail off the Arctic

    No international transit is expected on the Northern Sea Route this year. Perhaps, that is for the best since intense development of international shipping on the Arctic route could potentially lead to perverse political and legal effects.

    In 2021, international transit on the Northern Sea Route totaled 2 million tonnes (versus the planned volume of 1.5 million tonnes) while no requests have been submitted for this year due to sanctions, Maxim Kulinko, Deputy Director of Rosatom’s Northern Sea Route Directorate, said at the round-table meeting "Transport and Transit Potential of the Arctic" held with the participation of IAA PortNews. 

    “No international transit is expected this year. NSR Directorate and GlavSevmorput jointly conduct careful analysis of requests for passing the NSR. No applications have been received from companies involved in last year transit operations so far,” said Maxim Kulinko. According to him, they say the financial risks from the sanctions are very high and there is no appropriate fleet. “So we’ll see what happens next. The companies are looking attentively towards the future when the situation with Ukraine is resolved and the sanctions are hopefully lifted,” added Maxim Kulinko.

    Rosatom representative emphasized that the western countries have always been unwilling to carry cargo by the Northern Sea Route. After test voyages of Maersk, environmental activists intensified their activities against the plans of western companies to operate on the Arctic route.

    Russia’s Asian partners are also losing their interest to shipping on the Northern Sea Route. According to Sungwon Hong, Director of Youngsan University’s Arctic logistics institute (S. Korea), the businesses polled in his country mark a decrease of interest to transportation by the NSR. The interest is still held by shipbuilding companies counting on contracts for ships intended for the Arctic. The expert believes that successful development of international shipping on the Northern Sea Route is possible if it turns into an international project involving stakeholders in Japan, S. Korea and China.

    “Japan and South Korea should be attracted to the infrastructure development, cooperation with ports should be established. In South Korea, it is primarily Busan, and Chinese ports located in the north-east of the country can be involved as well,” says Sungwon Hong.

    In the current situation, there is no much talk about extensive participation of foreigners in the Northern Sea Route development.

    Sungwon Hong underlined the absence of stable cargo flow for the international transit on the Northern Sea Route. He also marked the need to introduce digital services.

    Maxim Kulinko also told about the activities of Rosatom on creation of a unified digital ecosystem for the Arctic shipping. According to him, the core of the system will be formed by a digital platform which will collect data generated by the federal authorities and companies, process them and issue a product primarily aimed at ensuring safe navigation.

    Besides, Rosatom is creating a local system for monitoring of ice situation which is to comprise automated metering equipment on ships, remotely-piloted aerial vehicles with radiodetectors and land-based infrastructure for accumulating satellite data.

    “All that diversity will let us create a unified digital ecosystem and provide all the services required for shipping in compliance with the current global standards,” said Maxim Kulinko.

    DP World earlier announced its plans to organize transit along the Northern Sea Route amid the surging cost of container shipping due to the pandemic. For that purpose it was planned to create transshipment hubs in Murmansk and Vladivostok. According to the company’s plans the hub in Murmansk is to be linked with China, Japan, S. Korea and the railway, the western hub – with Rotterdam, London, Antwerp and other ports. That would let organize a route more efficient than that via the Suez Canal, DP World chief executive Sultan Ahmed Bin Sulayem said in September 2022.

    Besides, the interest in the NSR development was then announced by Chinese COSCO and Japanese MOL. They emphasized the significance of extending the navigation widow.

    Now those plans seem to be put into cold storage due to the known reasons.

    Port Pevek

    Does Russia have an international duty?

    Meanwhile, there has been increasing talk about the need of the NSR “internationalization”. Actually, potentially intensified development of the international shipping on the Arctic route can lead to perverse political and legal effects. When speaking at the round-table meeting "Transport and Transit Potential of the Arctic", Pavel Gudev, Leading Research Fellow - Head of the Working Group for the Study of the Policy of the United States and its Allies in the World Ocean at IMEMO RAS, said that the USA upholds the position that those straits have the status of international ones, and, consequently, ships have the right of a free transit along them. The United States substantiate their position referring to a geographic criterion: according to them, if a strait borders on the open sea it should be considered as an international one.

    However, Russia insists on the application of a functional criterion, according to which the status of the strait depends on whether they are used for a regular international navigation. Therefore, intensified international navigation on the Northern Sea Route (NSR) can aggravate the disagreement.

    Pavel Gudev emphasized similar disagreement between the USA and Canada concerning the status of the Northwest Passage.

    Besides, there are risks associated with the ice melting in the Arctic. Article 234 of the 1982 UN Convention on the Law of the Sea, provides that “coastal States have the right to adopt and enforce non-discriminatory laws and regulations for the prevention, reduction and control of marine pollution from vessels in ice-covered areas within the limits of the exclusive economic zone, where particularly severe climatic conditions and the presence of ice covering such areas for most of the year create obstructions or exceptional hazards to navigation…”.

    Therefore, if the ice cover on the Northern Sea Route does not remain for most of the year, then Russia will not be able to appeal to this article.

    Nevertheless, in the foreseeable future the Northern Sea Route will develop with the focus on transportation Russia’s export and coastal cargoes, primarily liquefied gas, coal, ore, fish and general cargo. In view of the ’eastward pivot’ and insufficient capacity of railways running to the Far East, the Northern Sea Route can be and should be used as an alternative to railways as we wrote earlier. That is the prime task today, we believe. With the developed infrastructure, well-established services, communication and safety system, as well as handling terminals it will be much easier to attract foreign carriers on our own terms.

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Vitaliy Chernov