Various industries ranging from production to the tertiary sector impact wealth and ecological wellbeing in the Barents region counties (Jenkins & Yakovleva 2006).
Barents metal mining is the industrial sector which is the main focus of this dissertation. However, there are other industries with operations in the far north of Europe, including forestry, oil and gas production, shipping, tourism, reindeer husbandry and fisheries, which are considered in the following.
60
Forestry
Forestry impacts local ecosystems and economies in the Barents region (Välkky et al. 2008). The forest area of 87 million hectares in the Barents region equals around sixty percent of the entire forest area in the European Union. In Finland, Russia and Sweden, forestry is of outstanding economic significance. Characteristics of the forest territories in the Barents region are the small number of tree species, large forest areas and high-quality wood (Välkky et al. 2008). Forests are essential to provide oxygen for the Earth’s atmosphere and are simultaneously carbon sinks, which are a significant asset in the climate change debate (Alexandrov & Yamagata 2004; Roderfeld et al. 2006). Moreover, forest regions are a natural habitat for a vast number of species and are important for biodiversity. Logging can result in enormous negative environmental impacts (Panwar 2008), including deforestation, habitat loss and noise. Forestry as a sector at the heart of the sustainable development discourse has one essential advantage compared to other natural resource-based industries (Välkky et al. 2008). Wood is a renewable resource and forest areas can recover with the application of forestry management systems, including monitoring, mapping and planning. The management systems strive for forest recovery in periods that will allow the upcoming future generations to have access to the same amounts of resources as the present generation (Martin 2008;
World Commission on Environment and Development 1987; Husted & Milton de Sousa-Filho 2017). Oil, gas, metals and minerals, by contrast, are non-renewable (Tatarkin & Loginov 2015; Tiainen et al. 2015). Forestry in the Barents region has a low potential for conflict with the metal mining industry, but continuously faces land-use conflicts with reindeer herders and tourism (Välkky et al. 2008).
Oil and gas operations
Two out of the four Barents region countries are active in the extraction of oil and gas. These two countries are Norway and Russia and their extraction activities are mainly offshore in the Arctic Ocean (Austvik & Moe 2016). Norway started its exploration initiatives in 1980, with major discoveries in 1984 (Snøhvit gas field), 2000 (Goliat Oil field) and 2011 (Skrugard Oil field; Klick 2009). Exploration activities slowed down in the Norwegian Barents Sea (as part of Arctic Ocean) in 2011 (Austvik & Moe 2016). There are high expectations that more intensive well drilling in the Barents Sea will lead to further large discoveries. Oil equivalent reserves amounted to approximately 200 million tons at the end of the 2010s, and the estimated undiscovered resources in Norway are up to 750 million tons of oil equivalent reserves (Austvik & Moe 2016). The Snøhvit gas field is the only production site in the Norwegian Barents region to this date and it was opened in 2007. It became a world-famous LNG (liquefied natural gas) project
(Offshore-61 Technology - Snøhvit Gas Field). Russia (formerly Russian Soviet Federative Socialist Republic) initiated its exploration activities in the 1970s and 1980s with several notable discoveries in this time span, including the Shtokman gas field (estimated reserves of 3,800 million m3 gas) (Zhdannikov & Mosolova 2007). This field is located 650 km northeast of the city of Murmansk and in the past thirty years has raised hope and anticipation of locals for economic and infrastructural development in the Murmansk region with peaks in the early 1990s. Exploitation of the Shtokman gas fields would mean great wealth creation for the region (Madslien 2006). However, exploitation has not begun yet as of 2018, due to the capital-intensive investments needed, and low gas prices on the international markets.
Gazprom the leading project partner of Shtokman Development Enterprise estimates that exploitation will begin in 2028 (Staalesen 2017 (1)). Over the past few decades Norway and Russia have had several conflicts over determining who has the jurisdictional rights in specific Arctic Ocean areas. This conflict was solved in 2011 and the conflict area was divided fairly by the two states (Austvik & Moe 2016). The ecological dimension of oil and gas extraction in the Barents region must not be neglected. Extensive shipping activities increase the risk of oil spills in the Arctic Ocean. Furthermore, the Russian fleet partly uses nuclear energy to run their fleet, thus radioactive waste might harm the natural environment in the Arctic Ocean (Bergman & Baklanov 1998; Barentsinfo). The oil and gas industry and metal mining have a low potential for conflict. Oil and gas is exploited largely off-shore in the Barents region and mining is to this date economically only feasible on land (Abramowski 2016). Both industries have much in common and thus their stakeholder universes are similar. Both industries face similar societal and ecological challenges throughout their operations (Kokko et al. 2014; Vanclay et al.
2015; Ludviksen 1995; Osofsky 2011).
Tourism
Tourism in the Barents region is on the rise, with the strongest development in Finnish Lapland since 2015 (Statistics Finland). Winter tourism in particular is a success story for the regional economy and there are several promotional campaigns under way to attract more tourists to visit the European Arctic (e.g. Visit Finland, Visit Sweden, Visit Norway, Visit Arctic Europe 2015–2018, Visit Arctic Europe II 2018–2021). Tourism organisations in Finland, Norway and Sweden are collaborating in marketing to promote the touristic assets that their northern territories provide. Major visiting groups in recent years come from China, Great Britain, France and the German speaking countries in Central Europe (Statistics Finland). The main attractions in the Barents region comprise winter outdoor activities, such as Husky safaris, cross-country skiing, hiking, snowmobiling and sledging. A special asset of the Barents region are the occurrence of the northern
62
lights (Aurora Borealis) that fascinate all the visitor groups, with Chinese tourists in particular who hold high appreciation of experiencing this natural phenomenon.
The northern lights are also a strong reason that Murmansk perceives a growth in tourism, particularly based on more visitors from China (Staalesen 2017 (2)). China and Russia are both in the BRICS community and this gives Chinese travellers comparatively easy access to a touristic visa, often provided by Chinese travel agencies (Staalesen 2017 (2)). While winter tourism has been on the rise in the past few years with the establishment of new hotels and resorts, the challenge to attract international visitors to spend the summer in the Barents region remains and has become more severe as a rising number of accommodation facilities are unoccupied in the low-tourist season (Kohllechner-Autto 2011). Tourism is linked to various ecological threats in the vulnerable Arctic ecosystem. Tourists enter a natural habitat that is home to numerous species of flora and fauna. Most of these plants and animals can adapt only to small-scale human impacts (Colman 1998).
Infrastructural development and the growth of touristic centres results in increasing pollution levels, noise and threatens the level of biodiversity (Espiner et al. 2017).
Another major problem is the transportation of tourists to the Arctic. The vast majority enter the Barents region by plane. Aviation is accountable for a large-scale carbon footprint and thus has a large role concerning the warming climate (Lee et al. 2009). Conflicts with mining are linked to land-use disputes, because mining creates dust, noise and pollution of the soil, air and water (Davis & Franks 2014).
These impacts harm the Barents region tourism industry which is selling a picture of scenic, “untouched” beauty in a pristine environment (Suopajärvi 2015; Kokko et al. 2014). From a societal viewpoint tourism is an opportunity to create employment for local communities and counteracts the out-migration of young residents (often women) to larger urban centres away from the Arctic (Graybill 2009). Tourism is not a male-dominated industry as is the case for the extractive industries. The co-existence of tourism and mining in the Barents region is possible but requires the will to negotiate and the cooperation of all involved parties to build consensus and make compromises (Kokko et al. 2014). There are international examples of mining tourism, meaning that the mine site either in operation or abandoned becomes the tourist attraction itself. Potential visitors may show interest in tours around the mine site, or a mining museum affiliated to the local mine (Colman 1998).
Shipping
The shipping sector is growing in the Barents region. There is increased attention based on the fact that the seasons of ice-free shipping routes in the Arctic Ocean are becoming continuously longer due to retreating sea ice (Zonn et al. 2017).
Technological advancements are however required not only to be able to break the sea ice. Arctic shipping embraces further challenges, including harsh weather
63 conditions and low visibility due to the occurrence of fog or darkness (Buixadé Farré et al. 2014) This is of particular interest for connecting the Barents region ports to ports in China, South Korea and other Asian markets, the so-called Northeast Passage (Zonn et al. 2017). The other route with high relevance for economic development in the European Arctic is the Transpolar Sea Route, connecting Europe and North America via the North Pole (Zonn et al. 2017). Shipping has a low potential for conflict with the mining industry, as shipping operates off-shore and mining is to this date economically feasible only on-shore (Abramowski 2016).
These two industries supplement each other as metals and minerals can be transported via shipping from the remote Arctic areas to major markets overseas.
As mentioned in the oil and gas production chapter, shipping is connected to threats concerning oil spills and nuclear contamination in the Arctic Ocean, due to the vessels propulsion systems. However, international Arctic cooperation is developing and a good example of this can be seen in the terms of the “Arctic Search and Rescue Agreement”, which defines responsibility for Arctic states to include search and rescue coverage beyond their own boundaries and beyond coastal areas (Arctic Council 2011 – Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic).
Fisheries
Fisheries have a long tradition in the most northern parts of the European Arctic, including today’s Barents region counties. The Barents Sea has numerous fish stocks with important species such as haddock, redfish, saithe, Greenland halibut, herring, capelin and by far the economically most meaningful Norwegian Arctic cod fish (Hønneland 2000). Cod is of particular interest as the global cod populations have significantly decreased due to overfishing. Norway and Russia have set a good example of how the implementation of quotas and international cooperation can counteract overfishing. These two countries have been able to preserve fish stocks, and this has allowed the cod to thrive temporarily in population (Allick 2010). It is a remarkable example, as cooperation between Russia and Western European industrial countries is often characterised by enormous challenges and mutual mistrust (Crotty & Rodgers 2012). However, Arctic cooperation between Russia and other Arctic states works on a comparatively strong foundation (Hønneland 2000). Fisheries in the Barents region are not just a matter of large-scale fishing with international quotas. They are also traditional livelihoods for indigenous people in the Barents region (Zonn et al. 2017; Ivanov 2015) and are particularly important for the Sami populations in Northern Norway.
The indigenous people practice small-scale low-capitalized fjord fishing without using high-technology vessels (Eythorsson 1993). Bjoerklund (1990) argues that fjord fishing in Northern Norway, where each community fishes at maximum one
64
hour away from the home shore, is a traditional Sami resource just as is the case with reindeer husbandry. Mining and fisheries have developed conflicts when mining companies have decided to dump mining waste into water bodies (Conde &
Le Billon 2017). The Førde Fjord in Northern Norway is a popular example where environmentalists, NGOs and local communities organised protests against planned mining practices of dumping tailings into the seabed. This practice threatens the aquatic ecosystem in the fjord, including a threat of significantly reducing the fish stock (Save the fjords 2016). Deep sea mining of metals and minerals is to this date only on a theoretical level in the Barents region, with several research institutes conducting research and development to make it economically feasible. Once it starts, it will naturally impact aquatic organisms and impose risks to the fishery sector, due to similar ecological problems that are known from traditional on-shore mining (Jaeckel et al. 2016). Other ecological concerns for fisheries are linked to oil and gas extraction in the Arctic Ocean and possibly uncontrolled leakages of oil, gas or fuel. The disposal of reactor waste from nuclear submarines of the Soviet Union fleet in the Kara Sea is another ecological problem that threatens aquatic ecosystems in the Arctic Ocean (Nilsen 2018 (1)).
Reindeer herding
Reindeer herding is a characteristic feature of the Barents region. It is practiced in all four Barents region countries and constitutes one of the major traditional livelihoods for the indigenous communities that reside in the region (Ivanov 2015;
Kokko et al. 2015). However, it is not only practiced by indigenous groups. In Finland and Russia non-indigenous groups practice reindeer herding as well.
Currently, European Union citizens have the right to possess reindeer in Finland. In contrast to this, in Norway and Sweden the Sami populations have exclusive rights to practice reindeer herding (Reindeer Herding – Virtual Guide). What makes reindeer herding in the Barents region special is that it is not just a business or a way to make a living, but it is strongly tied to culture and beliefs (Ivanov 2015). For instance, the nomadic Nenets populations in Northwest Russia stick largely to the cultural life, established in ancient times, with reindeer as provider for food, clothes, manufacturing materials and as draft animals to cover long distances in harsh climatic conditions (Adrian-Vallance 2013; Ivanov 2015). Reindeer herding requires vast amounts of land for several purposes including grazing in different seasons and migration. Appropriate land is limited, particularly in the Nordic countries, as land needs to provide sufficient nutrition for the animals and a secure environment. Reindeer herders continually face land-use conflicts with all kinds of extractive industries and also encounter challenges with the booming tourism sector in the European Arctic. Mining causes difficulties for reindeer herding from various perspectives (Kokko et al. 2015). Building a mining site and developing the
65 infrastructure around a mining site destroys forests and pasture land. Natural habitat is fundamentally needed for the animals (Jenkins & Yakovleva 2005). Access roads and railways in mining areas divide the forest territory and this result in a loss of biodiversity and higher emissions of dust and noise (Suopajärvi 2015; Kokko et al. 2015).
Other sectors with notable impacts on the Barents region
As indicated before, the Barents region is largely dependent on natural resources and traditional livelihoods (Ivanov 2015; Roderfeld 2008; Kokko et al. 2015). The growing service sector largely embraces tourism and travelling enterprises.
Production and manufacturing facilities are rare, due to the distance to the major markets in Central Europe, North America and East Asia. Specific products manufactured in the Barents region are often linked to the cold climate in the area (Riyad 2015). The production of snowmobiles or the development of web-server facilities are two examples in this regard. The latter requires a great deal of cooling inside the facilities and in the European North it is less energy intensive than in more southern latitudes with warmer climates throughout the year (Staalesen 2018). Car and other vehicle manufacturers use the Arctic climate conditions in Finland and Sweden for test-driving purposes at low temperatures and on slippery surfaces (Finnerty 2017). Aviation in the Barents region is on the rise with a higher influx of tourists from all over the globe (Statistics Finland; Visit Norway; Visit Sweden; Nilsen 2015/2018 (2)).
66
5 CORPORATE SOCIAL RESPONSIBILITY (CSR)
The content and number of definitions of CSR are abundant and continuously growing. Despite lacking a core definition, certain characteristics of CSR have prevailed to this date (Windsor 2006; Detomasi 2008; Bice 2016). This dissertation combines these characteristics to analyse the CSR concept and its relevance. This chapter discusses the thematic background of CSR, the history of CSR, the contradiction of soft-law and hard-law and already prevalent and novel typologies of CSR.