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The Arctic Economic Council Makes an Entrance

In the two years since Arctic Economic Council was founded as an offshoot of the Arctic Council, its members have been building the organization from the ground up, establishing a secretariat in Tromso, Norway, and a governance structure.

Written by Chris Windeyer Published on Read time Approx. 6 minutes
The Arctic Economic Council aims to improve business-to-business relationships and create new opportunities for economic development.Pixabay

With four million people and tremendous natural resources, the Arctic is, among many other things, an economic opportunity. But despite the oft-heard “race for the Arctic” narrative, economic development in the circumpolar world is more likely to be hashed out around a conference table.

Canada pushed for the creation of the Arctic Economic Council (AEC) during its chairmanship (2013-2015) to bring together the Arctic Council’s member states and permanent participants with existing northern business and companies looking to invest in the North. The AEC held its first meeting in Iqaluit, the capital of the northern Canadian territory of Nunavut, in 2014.

Tara Sweeney, the SEC’s chair, who by day serves as the executive vice president of external affairs with Alaska’s Arctic Slope Regional Corporation, spoke to Arctic Deeply about the council’s founding, its plans and the economic issues it intends to take on.

Arctic Deeply: What is the Arctic Economic Council for?

Tara Sweeney: Prior to the creation of the AEC, if you look through all of the declarations, you will see that there’s a reference to the need for attention to economic development activities in the Arctic. Those sitting around the table had the discussion about the need for business input into the Arctic Council.

The AEC is an entirely independent organization from the Arctic Council, yet the membership mirrors the representation of the Arctic Council. So we have eight Arctic states and six permanent participant organizations that are the legacy members of the AEC. The distinguishing factor I would say between the AEC and the Arctic Council is that permanent participants have voting privileges within the AEC.

Arctic Deeply: What is the AEC’s budget and where does the money come from?

Tara Sweeney: The Norwegian Ministry of Foreign Affairs coupled with the Norwegian business community currently provide 100 percent of the funding for the AEC secretariat. They agreed to cover the costs for the first three years, then the AEC secretariat must find additional funding mechanisms to become sustainable. The AEC as a whole, deeply appreciates the leadership, support and financial backing from Norway.

Arctic Deeply: Is the membership restricted to the states or the permanent participants or do business or business associations have a vote?

Tara Sweeney: There are three levels of membership that organizations can explore and [they’re] non-voting memberships. For those [businesses] that are points south of the Arctic, we’re calling that membership level the “southern partnership.” Then for businesses located in the Arctic, if they’re headquartered or domiciled in the Arctic, then we’re calling that membership level a “northern partnership.” And because there’s such a need to continue to create opportunities for micro, small and medium businesses, we have a level for those types of organizations in the Arctic. And we’re calling that the “permafrost level” because small businesses in our communities are very active, so they’re kind of like that active layer.

Arctic Deeply: What sort of membership uptake has there been in each of these three tiers so far?

Tara Sweeney: We have not released the documents that have been ratified because they’re currently in the design process, so they’re not publicly available yet. We anticipate they’ll go live [in early May]. However, the reason that we created these various membership levels was due to the interest expressed by other Arctic businesses and companies that want to do business in the Arctic.

Arctic Deeply: Can you outline how Indigenous peoples are going to play a role in the AEC?

Tara Sweeney: The way the AEC is set up, each Arctic state has three business representatives and each permanent participant has three representatives on the council [one on each committee]. Some seats have not been filled yet, but they have up to three seats.

One of the ways that businesses can be involved is through the working groups. One of my projects inside the AEC, in addition to being chair, is overseeing the working group called Arctic Stewardship. The goal there is to bring people together to develop guidelines on how to be a good Arctic steward if you are a business coming from the south and wanting to look north.

The environment that we live in defines who we are as people and we want to ensure that the environment is taken care of because it feeds us. I had my cousin from Barrow come down and bring me some frozen fish, which actually I’m cutting up right now. We have to take care of the environment. It’s who we are as indigenous people. And so there’s going to be that balance that needs to be struck between environmental stewardship and regional economic growth. And that balance can only be struck with the input of local Arctic residents and the indigenous populations.

Arctic Deeply: How does AEC propose to engage some of these outside environmental groups who have things to say about what should be on and off the table?

Tara Sweeney: The AEC way really is through partnership, innovation, collaboration and peace. When I have given talks throughout the Arctic and points south, the message is always “go local.” For those who want to lock up large swathes of land throughout the Arctic without talking to the local people here, then they’re doing us all, the four million-plus people who live in the Arctic, a huge disservice, and our role is to assist in the dialogue and to ensure that the business community and the indigenous populations have a voice in responsible economic growth.

The Nesjavellir Geothermal Power Plant in Thingvellir, Iceland. (Gretar Ivarsson)

The Nesjavellir Geothermal Power Plant in Thingvellir, Iceland. (Gretar Ivarsson)

Arctic Deeply: There is a tendency to see the Arctic as this untapped repository of natural resources. What other economic possibilities do you see and what is the AEC going to do to promote them?

Tara Sweeney: There is a lot of untapped potential in the Arctic.

The Arctic Stewardship working group has three tracks. One is to promote traditional knowledge in projects whether they are large or small. Two is what we’re calling corporate responsibility and then the third is the promotion of small, micro and medium Arctic businesses.

The second working group is on maritime infrastructure and development.

The third one which is responsible resource development and that includes renewable and nonrenewable industries.

The final one is telecommunications infrastructure and development.

Those are the four [working groups] that are active. There are three other that include fisheries, human resources, and tourism.

While you have large industry interest in the Arctic with respect to resource development, there is huge growth potential with marine transportation and infrastructure. There is a huge need for broadband connectivity. Reliable communication avenues for our northernmost communities is essential. And what we’re seeing is more people interested in coming to visit the Arctic so tourism is going to play a role as well.

Arctic Deeply: Will AEC tackle the question of how to pay for new infrastructure in the Arctic?

Tara Sweeney: One of them is public-private partnerships.

The harbor of Kirkenes in northern Norway, on the border with Russia. (Wikimedia Commons/Clemensfranz)

The harbor of Kirkenes in northern Norway, on the border with Russia. (Wikimedia Commons/Clemensfranz)

Arctic Deeply: Have you found from your own experience in Alaska that that’s an effective method?

Tara Sweeney: We’re working on it, I can tell you that much. If I can switch hats real quick, my company, Arctic Slope Regional Corporation, owns a minority interest in what we’re calling the Quintillion Subsea Cable Project. Right now, the Alaska portion is completely private money.

Arctic Deeply: AEC is born of the Arctic Council, but how do you see AEC working with the Arctic Council and other circumpolar organizations over the next few years?

Tara Sweeney: Again, it goes back to our underlying principles of cooperation, collaboration, innovation and peace. We’re open to working with organizations across the Arctic to promote responsible economic growth.

There’s been a lot of progress and there’s a lot of interest in the AEC, and with these foundational documents, now we can really begin to focus on these discussions and creating the work product necessary to move the needle with respect to economic growth in the Arctic. I’m really excited.

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