Podcast

Arctic: New Circumstances Bring New Challenges

The Arctic region has undergone an extreme development both geographically and politically. Recently, a new layer of complexity has evolved; Russia decided to invade Ukraine and China has shown interest in the arctic as the ice retracts. The question: What is going to happen in the Arctic?

Written by: Terma
Podcast Security Arctic

The Arctic region has undergone an extreme development both geographically and politically. Recently, a new layer of complexity has evolved; Russia decided to invade Ukraine and China has shown interest in the arctic as the ice retracts. The question: What is going to happen in the Arctic?

The changing environment not only impacts people, but also the changes raise a string of geopolitical challenges, which will be discussed in this episode. Managing Director at Naval Team Denmark, Nils Wang, and Thomas Blom, Senior Vice President for Surveillance and Mission Systems at Terma A/S join us to help shed light on this topic.

Listen to this episode if you want insight into one of the major political hotspots.

Today’s Guests:

  • Managing Director at Naval Team Denmark, Nils Wang
  • Senior Vice President for Surveillance and Mission Systems at Terma, Thomas Blom

Your Host: Mikkel Svold
Produced for Terma by Montanus

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Resources

Want to learn more?

In our blog post "New Circumstances Bring New Challenges", you’ll learn about the North Atlantic and the Arctic High North from an operational perspective – seeing the area as a whole.

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Episode Transcript

Mikkel Svold:
Welcome to Allies in Innovation. I'm Mikkel Svold. And in this and the next episode, we are talking about the Arctic region. And this is one of those episodes, so one of those two episodes, that I've been really looking forward to because the Arctic region right now undergoes such an extreme development both geographical changes because of ice melting, but of course also political changes with increasing political interests in the area.

Mikkel Svold:
So, I'm super excited about this episode. And today, we are going to talk about how to handle some of the geopolitical challenges and what it means that the Arctic region is basically opening up a little bit, and what these new circumstances in the northern Arctic region brings. And today, we're recording the new atrium of Terma's, new and beautiful domicile here in Copenhagen. And with us, we have Thomas Blom. Welcome to you, Thomas.

Thomas Blom:
Thank you.

Mikkel Svold:
And Thomas, you're the senior vice president that is for Surveillance and Mission Systems here at Terma?

Thomas Blom:
Yes.

Mikkel Svold:
And also joining us is the former head of the Royal Danish Navy, and now managing director of Naval Team Denmark. Welcome to you, Nils.

Nils Wang:
Thank you.

Mikkel Svold:
That is Nils Wang. And Nils, maybe just before we begin, because I think most people don't know Naval Team Denmark. Can you just put a few words on what is Naval Team Denmark?

Nils Wang:
Naval Team Denmark is a network organization for the maritime defense industries in Denmark. And our role is to facilitate our member companies strive to export their products to other navies, with reference to what they have delivered to the Danish Navy.

Mikkel Svold:
So, you basically connect the navies with the suppliers?

Nils Wang:
Yes.

Mikkel Svold:
And also before we go deep into the geopolitical things that are going on in the Arctic region, I think maybe we should try to define the Arctic region as well. What do we actually mean? How far does it go down? Is Iceland included and Nils maybe-

Nils Wang:
Yeah. Normally, you would say that the most common definition of the Arctic is the water and the landmass north of the Arctic Circle. But even in that area, the Arctic is very much different depending on which part of the Arctic you are looking at. So, there's of course, a huge part of the Arctic with a lot of ice, polar ice from the polar seas drifting down in the area. But there is also vast areas of the Arctic that is free of ice also the whole year because of the gulf current.

Nils Wang:
But it is not enough just to look at the Arctic as an area north of the Arctic Circle because the North Atlantic that is bordering the Arctic region at the Arctic Circle is part of the operational definition of Arctic waters. And that is why you hear different kind of labels. Some often labeled as the Arctic, but somebody also talks about the High North. Somebody talks about the North Atlantic.

Nils Wang:
So, it is very important that you try to define when you're talking about specific challenges in the Arctic, where in the Arctic are we, what are we talking about.

Mikkel Svold:
Yeah. And this definition, is that the largest definition or-

Nils Wang:
Yeah, I think, seen in an operational perspective that we are discussing today. You would need to look at the North Atlantic and the Arctic High North, the whole area.

Mikkel Svold:
And now obviously, we sit here in Copenhagen and in Denmark. Denmark has quite a prominent role in the Arctics compared to the size of Denmark, but of course that's because of Greenland. And Thomas, maybe you can just briefly touch upon what is the role of Greenland? I know it's not necessarily into your specific-

Thomas Blom:
Well, going back to the question that Nils asked before, I think you also can take a look at it from a country perspective that when you talk about the Arctic countries, you will see Denmark, i.e. Greenland, the Danish Kingdom as one of the biggest countries. But you also have Canada, you have the US with Alaska. You have Russia. And finally, Norway as sort of what you can say is the true Arctic countries.

Nils Wang:
The Arctic Five.

Thomas Blom:
Yeah, the Arctic Five. And then you have Finland. You have Sweden. You have Iceland that is also associated. And I've even seen China now labeling themselves as interested, the countries that are interested in Arctic. And obviously, China is there because of, as you said, the change in climate situation and the ability to have a new transportation routes through the Arctic with-

Mikkel Svold:
Yeah, because I was just about to say, why is the Arctic region getting increasingly more interesting? What's happening right now?

Nils Wang:
I would say it's predominantly because you have a great power rivalry again. So, the world is getting more and more bipolar and not in an Arctic sense, but in a power distribution sense with US and China as the big poles in the power game. And then you have, of course, Russia, not the least in Europe right now showing also their wish to become looked upon as a great power.

Nils Wang:
So, the great power game is kind of spilling over in the Arctic. So, where you previously had a very low-tension Arctic, you can see today that the rivalry between US and China, and Russia and the west is actually spilling over in the Arctic region. And that is why it is now kind of looking a little bit like other regions security-wise.

Mikkel Svold:
How new is this development? Is that with Russia or-

Nils Wang:
It has been going on for some time as Thomas alluded to. China is defining themself as a near Arctic country, which is basically not a protected label for any country. And everybody is looking towards the Arctic because this rivalry is going on, but also because the Arctic is becoming more and more accessible. You mentioned the retraction of the ice is creating new opportunities, not only for sea transportation, but also to extract resources.

Nils Wang:
And I think the present situation with the war between Russia and Ukraine and the whole supply chain challenges for many companies and industries is kind of pointing towards any region that is rich on resources. And in the Arctic and for example, Greenland, is actually containing the whole periodical system of resources.

Mikkel Svold:
But I'm thinking that even though that might be true and also the retraction of the ice, it's still quite inaccessible, isn't it? It's still really far away.

Nils Wang:
Yes and no. I mean, yes, you have great distances. There is, no matter of the climate change, still harsh conditions up there. But you see that the Northern Sea route along the Russian coast is getting open in more and more extended periods of the year. And you can also see that the amount of goods that is transported through that waterway is actually increasing.

Nils Wang:
So, I think everybody expects that in the next 5, 10, 15 years, you would see more and more traffic going this way. And where you have sea traffic, you have choke points and where you have choke points, you have strategic tension. And that is also a reason why the Arctic is kind of being normalized also when we are talking about security policy and tension.

Nils Wang:
So, you would have international straits, like you have the Strait of Hormuz and you have the Danish Straits, and you have the Malacca Strait. Now, you'll probably see that some of the straits in the Arctic will also be areas of great concern. And you would also have Russia claiming that it is territorial water of Russia, and the rest of the world claiming that it is not. So, you would have all these kind of questions popping up in the Arctic.

Mikkel Svold:
And Thomas, from your chair where you're sitting, how is this development? How do you feel this development in the Arctic region?

Thomas Blom:
Well, there's no doubt that the interest in the Arctic and the interest in understanding what is actually happening up there has been increased significant over the last 10 years. If you go back in history actually, you could say that during the Cold War, the interest started after the Second World War in the '50s. There was a significant investment actually in surveillance technology.

Thomas Blom:
At that time, you were interested in seeing bombers and aircraft primarily from Russia into the US because we tend to look at the world from ... We take a look at Denmark. We take a look of Europe, but if you need to understand how the countries actually sit together in the Arctic, you need to take a different map with you.

Mikkel Svold:
Yeah. I think that's a very good point because when you look at a world map, which is the world map that most people look at, you have Europe in the middle and you have the US to the left basically, right?

Thomas Blom:
And Russia to the right.

Mikkel Svold:
And Russia to the right. And it's skewed. And the more north you go, the more skewed the map becomes. So how are they actually positioned when you look from a top of the globe?

Thomas Blom:
And that is exactly the interesting point is that they all come together more or less at the North Pole. And I think we should maybe also a little bit later come into who actually owns the North Pole, because as Nils says, the borders in the Arctic region are not really decided yet. There is the process ongoing for who will actually have the North Pole as a territorial part.

Thomas Blom:
But except for that, going back to the Cold War and especially US-Russia, the shortest path from Russia to US or vice versa, that is actually over the Arctic region. That's over Canada. That's over Greenland. And that's why when the Cold War in the '50s really started, there was a huge focus on, first of all, it was aircraft, which was really bomber aircraft for the Cold War in case of a war. And that later developed into the missiles.

Thomas Blom:
And suddenly, you moved from being interested in seeing aircraft, you became interested in seeing missiles. And that is the origin of what is today the Thule Base that is there today, actually to look at ballistic missile defense.

Mikkel Svold:
And now coming maybe a little bit back to you talking about the developments since the Cold War. And then there's been a long period of time where there's actually been quite a good collaboration between the Arctic nation, as I understand it. Nils, what is happening now?

Nils Wang:
Yeah. But before we talk about what's happening now, it might be worse just reminding that Denmark actually took an initiative back in the beginning of the '90s, creating the Ilulissat Declaration, which was basically a declaration that stipulated that the five Arctic coastal states, that means the states that have border lines to the polar seas, that they agreed that the International Convention on the Law of the Sea was governing the area, because the fear was that you had to create new regulatory regimes in order to govern the area.

Nils Wang:
And that would actually lead to a discussion with anyone including also non-Arctic states like China, and everybody would have an opinion on how these rules should be. So, instead, all the five Arctic states told the rest of the world, basically, that this is a sea like any other sea. And therefore, the Convention on the Law of the Sea is the governing regime that is regulating this area.

Nils Wang:
And I think that was genius. It was probably one of the most genius Danish diplomatic initiatives in recent history because we talked about who owns the North Pole, Thomas mentioned that. And that is actually because you use the International Convention on the Law of the Sea to submit your claims to the continental shelf. It is a matter of establishing the limitations of the outer continental shelf, which means the right to actually regulate any activities on the seabed and under the seabed. It has nothing to do with values in the water like fish and anything.

Nils Wang:
And because you use the International Convention or the Convention on the Law of the Seas, you have to support these claims with scientific data. And that is why we have used, I think 330 million Danish kroner in order to have expeditions on icebreakers. And in order to collect these data that we then submitted to the international commission that is regulating this, and Russia did the same.

Mikkel Svold:
It's basically find out where the continents-

Nils Wang:
How the seabed is connected to your continental shelf. And because Greenland and Russia is located opposite each other, and they can use the same rules about the rich that is going along the seabed. They have overlapping claims. By the way, so have Canada. So, Canada, Russia, and Denmark claims, all three countries claims that they have the limit of the outer continental shelf that is including the North Pole.

Mikkel Svold:
And I think this is very interesting, and I think we should touch upon it briefly. But before going into how does this manifest in the technical side of how do you actually do that, but what does it mean that ... Or how do we solve this other than ... Well, we can look down, but is there areas that are still disputed even if we get a full image of?

Nils Wang:
There is a few areas that is still disputed, but they are insignificant. And it is nothing that is expected to hold big values. When countries are interested in claiming seabed in the polar seas, it is not about collecting bags of gold tomorrow. It is a matter of actually getting the right to regulate this area. And that is the DNA of any state, that if you can expand your territory or your rights even though it's only on the seabed without going to war with anyone, you will go for it. And that is why you see that countries are doing that.

Nils Wang:
There was a disputed area between Russia and Norway, by the way. Norway and Russia had agreed to disagree about the exact location of the delineation line between the two exclusive economical zones of the countries. And therefore, none of the countries could actually extract energy resources in the vicinity of that area.

Mikkel Svold:
So, they basically created a no man's land?

Nils Wang:
Yes, exactly. And then suddenly I think it was in 2011-ish, then Russia and Norway suddenly sat down and both were interested in extracting the resources out there. So, they agreed upon a delineation line for the first time in more than 30 years. And basically the week after, they both started to extract energy resources on each side. And that is a very good example that how economical interests can actually solve diplomatic disputes.

Mikkel Svold:
Yeah. Because I was just about to say, I think just for the listener not familiar with this expression, what does it mean that you have an economic exclusion zone? What is that?

Nils Wang:
The economic exclusion zone is a zone defined from the baseline or the coastline and out to 200 nautical miles. Unless there is not 200 nautical miles between the next country, then it's the line in the middle. And in that area, you have the right to extract any values, whether that is marine values in the water or stuff on the seabed and under the sea.

Mikkel Svold:
Yes, oil.

Nils Wang:
And that is where you fish are getting paid for, that other countries can fish in your area.

Mikkel Svold:
And now, Thomas, in the next episode, we're going to dive deeper into this. But then again, I want to ask you because as you talk about that you want to expand your rights to use this area, how do you actually make sure that you can keep your rights because that's your area of expertise as well?

Thomas Blom:
You can say one of the important things by actually keeping the rights to a territory, that is the ability to have a presence and the ability to actually have surveillance of the area historical. It goes back to why you have the Sirius Patrol today. That was actually the Danish way of showing that we were present on Greenland around the whole coast. And there were actually claims by Norway after the Second World War, that part of that should actually belong to Norway because you had Norwegian whale catchers that was on the coast of Greenland. That then actually got decided on by, I think, the UN? Nils, that's your expertise.

Nils Wang:
It was the International Court in The Hague.

Thomas Blom:
And supported by the US. So, you need to prove that when you have the territory, that you are actually active, that you are present, and you do surveillance.

Thomas Blom:
And as you started with saying that I'm responsible for business unit in Terma Surveillance and Mission Systems. That's the hint for me sitting here that surveillance, that's different kind of sensors from space-based to land-based to chips sensors of all forms of camera, radars, different types of acquisition systems, sensors.

Thomas Blom:
And mission systems, that's about data management. That's about taking all the input you have from all these sensors and human intelligence and putting it together to create an understanding of what is actually happening in the territory in the air, on the surface, on land, and also below the seabed, under the sea, in fact.

Mikkel Svold:
And in the next episode, we'll dive into is how you can actually do that in practical terms, because that's not easy.

Nils Wang:
Basically, it's all about enforcing your sovereignty. I mean, if you don't enforce your sovereignty, somebody else will exploit that weakness. And then you suddenly is not master in your own house. And a good example of also how practical that can be is, basically, the recent story about Hans Island in the Kennedy canal between Greenland and Canada. And we are talking about a rock, a square kilometer. You can stand on it and you can see on a bright day, you can see Canada on one side and you can see Greenland on the other one. And again, Denmark and Canada had agreed to disagree about the borderline on Hans Island, not the borderline up to Hans Island from the south.

Mikkel Svold:
But on the exact island?

Nils Wang:
On the exact island. That was a disputed issue. And we have agreed to disagree for more than 30 or 40 years. And the Danish Navy have actually, and also a Danish Minister of Greenland Affairs who started to fly out there and hoisted the Danish flag. And later on, on three occasions, Danish naval ships went up there, which is I should say it is a very dangerous operation because the ice conditions in that area can actually get you stuck very easily.

Nils Wang:
So three naval, the commanding officers of Danish naval ships have sailed up there and hoisted the Danish flag. And you can argue that that's ridiculous. And that is something that is belonging to another century.

Mikkel Svold:
Because I saw a picture from a top of the island. And just for people to understand, the island is really just a rock. It's just a big flat rock in the sea right in the middle.

Nils Wang:
But to put this flag hoisting into perspective, at the same time in parallel, there is an area where Denmark and Canada have submitted their claims to the International Commission of the Continental Shelf, exactly the same commission as the submission about the North Pole, about a seabed area southwest of Greenland, also between Greenland and Canada. And it looks like Denmark will actually get a chunk of seabed in that area with the size of the whole of Denmark here where we are.

Nils Wang:
And I would argue that the Hans Island, also the flag hoisting, claiming that it was Danish is a chip in that bargaining. So, it is very old fashioned, but it is also very modern.

Mikkel Svold:
Yeah. Because what do you suspect that the division of Hans are between Canada and Denmark now? It happened, I think, just last week where they agreed on the border. Is that going to influence how you would solve future disputes in the region?

Nils Wang:
I really hope so because I also think it's a showcase of how civilized countries is actually handling disputes like that. And I hope that a lot of countries is looking that this is the way to go when you have disputes like that and not just invading another country when you think that there is something that belongs to you.

Thomas Blom:
And also the South China Sea, that's probably the biggest dispute you have in the world right now with China claiming a big part of the South China Sea. And there you do see, you cannot call it battles, but you do see poling ships meeting each other and fishing over borders, et cetera, et cetera.

Mikkel Svold:
It's a deliberate provocation.

Thomas Blom:
Exactly. And that's obviously for a different podcast, but that is really one of the biggest conflicts I see on the longer term that is the South China Sea and hoped it could get back to China as a key country there.

Nils Wang:
But also worth mentioning, I think that in the Arctic, Russia have actually played by the international rules. I mean, there's not one incident where they have kind of said, "We don't care about that." And that is of course because in the Arctic, the international rules is serving Russia's interests. And that is why.

Mikkel Svold:
Can you explain why is that compared to other areas?

Nils Wang:
Yeah. That is because if you have 11-time zone coastline out bordering a sea and you then have a 200 nautical mile exclusion zone, and after that you can get up to 150 nautical mile outer continental shelf rights, I mean the whole, the biggest part of the cake, so to speak, will go to Russia. They just have-

Mikkel Svold:
If they played by the rules.

Nils Wang:
If they played by the rules. And you could argue that Russia have more resources in the Arctic region that they can afford to exploit already. So, they don't have this strive to get something more than the international rules can give them.

Mikkel Svold:
And I think I wrote down Ukraine on my paper here, because I think we should touch upon ... This situation in Ukraine, do you think it's going to change Russia's approach to the international convention in the Arctic region?

Nils Wang:
Yes, I do. But not necessarily in the sense of playing by international rules or not, but I'm sure it will ... I mean, it has already as a consequence, Arctic Council where you have all eight Arctic states including Finland and Sweden and Iceland, they have suspended their activities because all the members except for Russia is not showing up anymore.

Nils Wang:
So, that alone means that you have an important international and very prestigious international forum where you can't discuss anything because there's no one there. So, that is a consequence. And I also think that Russia will continue to kind of build up military presence along the Northern Sea Route because they want to be sure that they get the fees and the money for going through that area, because they see it as a future of business.

Nils Wang:
And then you have the biggest concentration of Russia's military force, including the whole nuclear arm is located in the ice free part of Russia around the Kola Peninsula. And that will continue to happen, continue to be there.

Mikkel Svold:
And now, our time is actually running. So, I want to come back home to Denmark, basically. How does this whole new situation, how does that affect the Danish role in the Arctics? What is going to happen now?

Nils Wang:
I think that, I mean, it kind of defines which kind of operational capabilities Denmark have to build up because Ukraine is connected to the Baltic Sea in the way that you have the Baltic states and all the countries that is bordering Russia. They want to increase NATO presence in order to have a conventional deterrence.

Nils Wang:
And if a deterrence should be trustworthy and liable, you need to have a backup plan if your deterrence fails. And that backup plan is basically to reinforce Europe and reinstall the integrity of NATO if Russia, for some reason, should violate the borders. And in order to reinforce Europe, you need to have a lot of equipment going over the North Atlantic, just south of Greenland and Iceland, and the Faroe islands-

Mikkel Svold:
From the US too.

Nils Wang:
From the US to, amongst others to the Danish area, which in the new situation is a basing and staging area. So, it all comes together in a sense, and the Danish kingdom is stretching and is basically the very concrete transatlantic connection you could argue. And therefore, we need to be able to protect reinforcement in the North Atlantic, also against submarines coming from the Kola Peninsula. And you need to be able to create or recreate the freedom of maneuver in the Baltic Sea so that you can get this reinforcement also across the Baltic Sea.

Nils Wang:
So, this whole new situation is not only a Baltic matter or a European matter, it's also a transatlantic and thereby an Arctic matter.

Mikkel Svold:
And that is going to put special demands on the equipment and the surveillance in the area.

Nils Wang:
Surveillance. Yeah.

Mikkel Svold:
And that is a perfect segue onto our next episode. So, I'm going to stop you now and thank you so much for joining this episode. It's been super interesting. And Nils, if people want to follow you or follow what you do, where would you recommend, they look?

Nils Wang:
I'm on LinkedIn predominantly.

Mikkel Svold:
On LinkedIn? And you, Thomas?

Thomas Blom:
Terma.com.

Mikkel Svold:
Terma.com will be the place. And obviously, we'll put links to everything that we've talked about in the show notes of this episode on terma.com. So, Nils Wang and Thomas Blom, thank you so much for joining us today. And I can't wait to have you back in the next episode where we'll dive into further down into how we can secure like a stable Arctic region in the future.

Mikkel Svold:
And to you, dear listener, if you do like this episode, don't forget to hit the subscribe button, I was about to say. And of course, please leave us a comment and rate this episode. It will help us spread the words of this podcast so we can make sure to give you the coolest insights possible. Thank you so much for listening.