On April 10, 2019, the Museum of Modern History of Russia hosted a lecture by Pavel Gudev, Senior Research Fellow at RAS IMEMO, RIAC expert, focusing on the following topic "The Northern Sea Route: Economic Potential, Legal Status, Development Prospects." The event was held as part of a series of lectures by Russian International Affairs Council (RIAC) at the Museum in 2018/19 season. The lecture was organized with the support of «Znanie», a Russian NGO. The information partner of the lecture cycle is International Affairs journal.
The Arctic is again attracting close attention from the media and the general public. The development of the Northern Sea Route was one of the key topics at the 5th International Arctic Forum 'Arctic: Territory of Dialogue', held in St. Petersburg on April 9-10, 2019. The question “Can the NSR become a full-fledged transport artery?” is extremely relevant for Russia and for other regional and non-regional countries.
Pavel Gudev touched upon three main aspects related to the NSR: economic potential, legal status, and development prospects.
Economic potential
When speaking about the NSR, it is important to remember that it does not have a single and fixed route. Depending on weather and ice conditions, the length of the NSR route can vary from 2 to 3 thousand nautical miles. Of course, unlike the route passing through the Suez Canal, the length of NSR is much shorter, which leads to substantial savings of marine fuel.
Sea transport has always been the cheapest form of transportation, it provides more than 80% of the total volume of cargo transportation. Its advantages are large carrying capacity, as well as the transcontinental nature of transportation. About 120 countries have their own seaports, which allows to connect the entire continents.
However, the NSR has a number of disadvantages: low speed of transportation, dependence on weather conditions, the existing authorization procedures for the civilian ships, the need to use icebreaking and pilotage, increased insurance rates, special requirements for the safety of navigation, range of depths, etc.
In 2018, the total volume of traffic amounted to 20.2 million tons. According to the Decree of the President of Russia, it is planned to increase this figure up to 80 million tons by 2024. Experts involved in assessing the resource potential believe that it is possible to achieve this indicator. At the same time, experts who are engaged in the analysis of energy markets are not sure that the Russian Federation will be able to enter new markets of other states, including the Asia-Pacific region, without special efforts.
Russia also faces the challenge of turning the NSR into an international transit route. However, the real numbers of transit within the framework of the delivered volume of 80 million tons are not yet known. Comparing the volume of transit through the NSR (0.5 million tons in 2018, 27 transits out of 792) with transit through the Suez Canal (more than 1 billion tons per year, 17.5–30 thousand ships), the figures speak for themselves.
When promoting containerized cargo there are also 2 main issues: what to transport and how to transport. The plans for 2019 are very modest: to transport about 50–70 thousand tons of frozen fish from the Sea of Okhotsk to the Baltic ports with the help of atomic lighter carrier-container “Sevmorput” reaching 0.5 million tons by 2030. However, container shipments require accuracy of cargo delivery, and the NSR is full of weather surprises.
Legal status
From the point of view of contemporary international law, the NSR passes through water areas with completely different legal regimes: these are inland waters, 12-mile territorial sea, 24-mile contiguous zone, and 200-mile EEZ of the Russian Federation. In some areas and with favorable ice conditions, it can, theoretically, pass through the offshore waters.
Despite the fact that under the 1982 UN Convention on the Law of the Sea there is a permitting procedure for navigation within the limits of inland waters, and in the 12-mile territorial sea — the right of innocent passage, within the 200-mile EEZ — 3 of 6 freedoms of the high seas (freedom of navigation; freedom of overflight; and freedom to lay submarine cables and pipelines), the NSR is viewed by Russia as a unified (!) transport route with a unified navigation mode.
This is primarily due to the fact that, in any case, its route will run through zones that are under sovereignty (inland waters, territorial sea) and the jurisdiction of the Russian Federation (contiguous and exclusive economic zones). Moreover, the NSR has never been used for international shipping before, and its development, including infrastructure, was carried out by the efforts of one state — the Soviet Union, and then the Russian Federation.
Russia regards the NSR as the "historically established national transport communication of the Russian Federation" with a regime of authorization for navigation of vessels. Despite the fact that the authorization for passage is enshrined in Russian national legislation only in relation to civil ships, the domestic law doctrine allows to apply authorization, or more liberal notification procedures, to foreign warships.
The US, our key opponent, does not agree with this legal model. They believe that authorization procedure has to be applied for the passage of civilian ships and warships in the internal waters, however, the right of innocent passage should be applied in the 12-mile territorial sea, and, according to the 1982 Convention, three freedoms of the high seas should work in the exclusive economic zone, including freedom of shipping. Russia, from the US point of view, interprets the provisions of Art. 234 "Ice-covered areas" of the 1982 Convention too broadly, introducing discriminatory measures within its framework aimed at restricting navigation, and not coordinating them with the International Maritime Organization (IMO). The US also believe that all Arctic straits are international allowing transit passage and Russia cannot restrict passage through them.
The radical American position is that it is necessary to start challenging Russia’s “claims” regarding the legal status of the NSR as part of the “Freedom of Navigation” program, a more liberal position suggests that it is not worth doing, as this increases the risk of a local military confrontation.
The Russian Federation proceeds from the fact that the legal regime of the Arctic as a whole, and the NSR in particular, has developed on the basis of not only contractual, and customary laws, but also the national legislation of the Arctic states (mainly USSR/Russia and Canada as having the longest coastline in the Arctic), including the one developed long before the adoption of the 1982 Convention. The latter can not be regarded as the sole legal regulator applicable to the Arctic Ocean.
Development prospects
Global warming may lead to the fact that a significant part of the Arctic will be freed from the ice and will be available for navigation most months of the year. These changes may raise the question of the extent to which art. 234 of the 1982 Convention “Ice-covered areas”, namely, the wording about “the presence of ice covering such areas for most of the year” will correspond to the current situation in the region. The Russian EEZ area getting clear of ice may result in other countries viewing the existing powers of Russia to control navigation on the NSR as less and less legitimate.
A decrease in the ice cover in the Arctic may also lead to the fact that traditional routes of the Northern Sea Route, which now pass through the internal sea waters, the territorial sea, and the exclusive economic zone of the Russian Federation, will become more high-latitude. If this happens, the Northern Sea Route will run entirely through the offshore waters, that is, outside the zones of sovereignty and jurisdiction of the Russian Federation. Russia, in this case, will no longer have any legal authority to control shipping, and the NSR may turn from the category of the national transport artery into an international shipping route.
It is also important that Russia's legal position with respect to the NSR is based on the fact that national NSR shipping regulations have never been used for international shipping, and accordingly, some of the Arctic straits can not be recognized as international with the right for transit passage.
Russia proceeds from the fact that only “current” and not “potential” (as believed by the United States) use of the straits for the passage of vessels under the foreign flags makes them international from the legal point of view, and in such a case the right for transit passage should apply. However, this logic also suggests that in the long term, that is, as the scale of transit shipping grows, such straits could theoretically be qualified as international. Accordingly, the transformation of the NSR into a full-fledged international transit route connecting North America and the EU countries with Asian markets may raise the issue of revising the legal status of a number of Russian Arctic straits in favor of their greater internationalization.
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In summary, it should be noted that the current model of the Northern Sea Route development provides for its priority use for exporting resources, mainly mineral (energy), from the Arctic regions of the Russian Federation to three key areas: North America, Western Europe, and Asia-Pacific. Despite the “resource” orientation of the NSR, this can help ensure necessary financial resources to solve another more important task — providing infrastructure of the NSR and attraction of foreign freight forwarders.
At the same time, Russia will never be able to completely abandon the national regulation of navigation on the Northern Sea Route, and to a large extent it is a question of ensuring its own security, primarily, environmental security. It is in this regard one should treat Moscow taking steps to centralize the NSR navigation management.
However, Russia will always have a certain dilemma: to try fully defend the national status of regulation on the NSR, or make the regime more liberal in order to attract foreign shipping companies and foreign investment to upgrade the existing infrastructure. Time will show which way our country will choose.
