Chapter 8 Recommendations on Japan's Diplomacy

Chapter 8
Recommendations for Japan's Diplomacy"Arctic Governance and Japan's Diplomatic Strategy" Project(Prepared by: ASARI Hideki)
1. Background
Having remained an "unexplored sea" for a long time, the Arctic region is now increasingly
garnering recognition from a range of countries as a "new frontier" as its ice melts and diminishes
as a result of global warming.

Considering the impacts of the global warming on the Earth's

environment, this development is not something to be hailed without reservation and each country
needs to continue working to prevent global warming; given, on the other hand, that a "newfrontier" is indeed emerging in reality and the strategic environment and the economic competitive
conditions affecting Japan's national interests are being transformed, Japan must take action so as tosafeguard its national interests.

At the same time, the melting of ice is bringing with it the

emergence, as real-world issues, of matters concerning the legal status of the Arctic region and therelationships of rights and obligations among different countries, which, as it were, have previously
been "frozen" in ice. If, going forward, nations engage in their respective claims and activities ina unilateral fashion, resulting in the Arctic becoming an arena brimming with nationalistic quarrels
where they blatantly pursue their own interests, we might find ourselves faced with the "tragedy ofthe commons," which would cause the environment to be further deteriorated and resources to be
depleted.
From this standpoint, research has been carried out under this Project for the duration of one yearwith a mission to deliberate on (a) what national interests Japan should safeguard amid the ongoingappearance of a "new frontier" in the Arctic region, (b) by what means and in what areas suchnational interests should be safeguarded and (c) how governance of the Arctic region necessary forensuring not only Japan's own national interests but also common international interests should
evolve.

The following recommendations are the outcomes of the discussions held among themembers of the Project.

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Chapter 8 Recommendations for Japan's Diplomacy

2. Policy recommendations(1) Basic approach
Although covered in ice, the Arctic Ocean is an ocean and is therefore subject to a series ofexisting relevant rules of international law, particularly laws of the sea, including as embodied in
the United Nations Convention on the Law of the Sea (UNCLOS). While, theoretically, one may
conceive a whole new regime such as in the form of an "Arctic Treaty," it is difficult for it tobecome a realistic option, given the Arctic coastal states, including the US and Russia, have anegative stance about it. Rather, Japan's national interests would be better served if the area
beyond territorial seas were treated as "commons (an area shared by the international community),"
except with respect to certain matters for which sovereign rights of coastal nations are recognizedover an exclusive economic zone or continental shelf (resource exploration, development, etc.) in
accordance with relevant rules of international law including the UNCLOS.
The nature of the Arctic Ocean as "commons" looms even clearer if one considers that, as will be
discussed later, the environment of the Arctic region is more delicate than other waters and thatwarming in the Arctic region has an effect of accelerating the pace of global warming.

When

acting on the "new opportunity" that is emerging in the Arctic Ocean, it is therefore necessary tohave a mindset directed towards how the "commons" should be protected by all nations working
together, based on the existing treaty order, as opposed to a "zero-sum" type of mindset.
In the meantime, however, the application of the UNCLOS, simple though it may seem, involves
a number of points of ambiguity when it comes to application in individual cases.
example the provision of Article 234 of the Convention.

Take as an

While it allows Coastal States to takecertain steps for the purpose of preserving the environment, this leaves an issue, for instance, as towhether or not some of the regulations on navigation imposed by a Coastal State are within thescope permitted by Article 234 of the Convention.

While abiding by the UNCLOS as the basics,

it is imperative to make sure that Japan's national interests and the "commons" features should not
be impaired in its details of application.

Additionally, Japan needs to play a leading role in thedevelopment of new rules on matters of navigation safety and environmental preservation beyond
the scope of discipline of the UNCLOS, while ensuring the consistency of such new rules with theConvention.

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Chapter 8 Recommendations on Japan's Diplomacy

Presented below are six specific recommendations founded on the approach described above:(2) Recommendation I: Japan's financial means and technology should be utilized in the areaof resource exploration and development to build win-win relationships with Coastal States.
In this attempt, adequate attention must be paid to the environment in consideration of any
particular conditions that the Arctic Ocean poses.
The continental shelf of the Arctic Ocean is estimated to contain 13% of the world's total oil and
30% of the total gas, both in terms of undiscovered resources. 1 While only a portion of them has
actually been explored and developed due to the severe hydrographic conditions there, it is safe to
say that the continental shelf of the Arctic Ocean has a potential to play a role in contributing tostabilizing the global energy supply and demand balance in the future.

For Japan, from aperspective of ensuring stability in its own energy supply as well, it is critical to be actively
involved in resource exploration and development on the continental shelf of the Arctic Ocean.
This is because maintaining "upstream" interests can work to mitigate fluctuations in trade terms intimes of energy emergency.

There are a range of programs for supporting "upstream" interest

acquisition overseas, including exploration equity financing by the Japan Oil, Gas and Metals
National Corporation (JOGMEC) and loans from the Japan Bank for International Cooperation(JBIC), which should be utilized proactively.
The UNCLOS forms the core of international rules that govern the continental shelf of the Arctic
Ocean, as is the case for other continental shelves.

Therefore, a Coastal State has sovereignty

over the waters within 200 sea miles from its coastal baseline and any area beyond 200 sea miles
should be treated in accordance with the provisions of the Convention.

In any event, Japan's

involvement in resource exploration and development on the continental shelf of the Arctic Ocean
can be made possible by cooperation with Coastal States, such as Russia. Taking into account themagnitude of risk that comes with resource exploration and development, investments from abroad
are attractive for Coastal States as well and foreign businesses do indeed have a part in projects in
the Barents Sea and the Kara Sea. Cooperation should be promoted while efforts are made tobuild win-win relationships with Coastal States.
In addition to being involved with "upstream" operation stages as mentioned above, anothercourse of action that would be advantageous for Japan is to become an active purchaser of natural
gas from the Arctic region.

There are mutually complementary demands for natural gas produced－3－

Chapter 8 Recommendations for Japan's Diplomacy

in the Arctic region - the one in Europe, where summertime demand is not as high as in wintertime,
and the other in Asia, where electricity demand rises sharply in the summertime for use for
air-conditioning – which suggests that Japan's decision to actively make spot purchases in thesummertime will contribute to diversifying its natural gas supply sources and can also bring about
an effect of keeping in check natural gas prices in Asian markets, which have soared as they areinterlocked with oil prices.
Meanwhile, environmental preservation should be a matter of particular attention in any resource
exploration or development in the Arctic region.

The Arctic Ocean's very low water temperatures

make the speed of decomposition of crude oil, in the event of oil leakage, slower than in otherwaters, resulting in its negative impact on the environment lingering for an extended period of time.
In the process of exploring or developing resources in the Arctic region, caution must therefore beused most scrupulously to avoid even the smallest chance of an accident. In this connection,
Japan should carry on basic research on steps against crude oil spillages in ice-covered waters incase of accidents involving oil field development in the Arctic Ocean, as well as basic research on
environmental preservation in the Arctic region.
In any case, resource exploration or development in the Arctic region should be regarded asbusiness-based and win-win cooperation based on the sovereign rights of Coastal States and not as
a "resource rivalry."

By harnessing its experience in resource exploration and development aswell as its financial means and technological expertise, Japan should, with its government andindustry working together, contribute to the creation of a win-win order: Japan's energy security isaugmented; Coastal States reaps the benefits and; stability is brought to the international energy
demand and supply balance.
(3) Recommendation II: In the area of marine transportation, appropriate application of the
UNCLOS should be ensured on the basis of the principles of the right of innocent passage (inthe territorial waters of Coastal States) or freedom of navigation (in the waters beyond theterritorial waters of Coastal States) on Arctic shipping routes.

Steps should be taken to

ensure navigation safety and to preserve the environment which are conducive to theutilization of shipping routes commensurate with the nature of the cargo.
Recently, Arctic shipping routes, particularly the one called the Northeast Passage, which runs
alongside Russia's northern coasts, have been drawing attention.

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For example, the navigation

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distance between Rotterdam and Yokohama could be shortened by approximately 34% on the
Northeast Passage (approximately 7,397 sea miles) compared to navigation via the Suez Canal(approximately 11,279 sea miles).

Another point is the absence of piracy concerns on the

Northeast Passage, unlike the southern route.
Meanwhile, the feasibility of the Northeast Passage requires deliberations based on the reality on
the ground.

Considering, for instance, that the Northeast Passage is available only duringice-melting periods, it is not necessarily suitable for container vessels, which serve much of cargotransportation on shipping routes between Japan and Europe.

As container vessel operations form

part of the production line, as it were, of the manufacturing industry, regularity and punctuality are
prerequisites.

In addition, the fact that ice, even if it is indeed melting, is still scattered all over

the Northeast Passage makes it impossible for ships to run at the same speed as they do on thesouthern route.

Further still, given the potentially enormous impact in the event of fuel oil leaking

out in ice-bound seas, it might be necessary to use diesel oil, which is more costly than fuel oil, andit will also be necessary to use ships that satisfy special specifications required of ships navigating
ice-bound seas.
As a result of examining these and other circumstances, this research project finds that the typeof cargo suitable for the Northeast Passage for now, with cost implications taken into account as
well, is non-regular bulks (resources such as LNG and gas condensate). Natural gas extracted on
the continental shelf of the Arctic Ocean fits this type.

When contemplating the use of any Arctic

navigation route, it is therefore necessary to do so from a perspective of an all-encompassing
strategy, associating it with the form of involvement in resource exploration and development on
the continental shelf in the Arctic Ocean as well.

For instance, there is substantial room forJapanese technology to play a part in resource surveys, including seismic mineral exploration, andplant construction, etc.

Furthermore, participation in the upstream operation itself, i.e., resource

development, carries even greater significance from a standpoint of not only economic value but
also resource security.

The utilization of the Northeast Passage can be associated with the Yamal

Peninsula LNG project, for which production is expected to begin before long, in 2017.

As theNortheast Passage requires a special ship structure and reinforced equipment from a perspective ofsafe navigation and environmental pollution prevention needed in a voyage in ice-bound seas, thecost of shipbuilding will be high, which makes it necessary to examine using shipbuilding
financing facilities from the Japan Bank of International Cooperation (JBIC) and the Development－5－Chapter 8 Recommendations for Japan's Diplomacy

Bank of Japan (DBJ).
When the use of the Northeast Passage is envisioned in that light, steps then must be taken to
ensure navigation safety, and environmental preservation.

Examples include establishing a system

for supplying drift ice and meteorological information to shipping companies, using a weather
observation satellite, so as to facilitate more in-depth navigation planning. As the lack of any
emergency port of call capable of accommodating large vessels alongside the northern Russiancoasts east of Murmansk is another element of concern about the use of the Northeast Passage, it isappropriate to encourage its development, pointing to advantages for Russia that the increased useof the Northeast Passage can bring about.
With regard to excessive claims for rights made by Coastal States, Japan can join hands withother user countries to try to dissuade such claims.

The UNCLOS 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 (Article 234) and the charges for navigation support services (icebreakers,
ice pilots, etc.) that Russia requires ships transiting the Northeast Passage probably draw the basis
from this provision. However, as the cost breakdown not being made transparent, it is necessary to
examine if the requirement imposed by Russia is a reasonable one conforming to the Convention.
While the Northwest Passage, which runs alongside Canada's northern coasts, does not attract asmuch attention as the Northeast Passage for the time being, Canada claims a vast area of seas as its
internal waters by applying the straight baseline method; it is also necessary to examine if suchtreatment is appropriate.
As the Arctic Ocean is characterized by low water temperatures and the slow speed ofdecomposition of polluting oil, the environment would suffer an irremediable destruction in theevent of fuel oil leakage.

It would not suffice to leave this issue up to Coastal States alone totackle; Japan is also well-positioned to make contributions in the area of expertise and technology
in an effort to ensure emergency preparedness associated with any large-scale oil spill accident andthere is also a need to develop a structure that provides ways for nations to work together to address
the issue.

The central role would be played by the International Maritime Organization (IMO)and Japan, being a maritime nation, needs to take an active part in international cooperation
centering around the IMO.

The IMO is also currently in the process of developing a Polar Code－6－

Chapter 8 Recommendations on Japan's Diplomacythat sets out discipline associated with maritime safety and environmental preservation in polarwaters; leading the discussion in this forum for Japan should also work to check any arbitrary
moves made by Coastal States.
(4) Recommendation III: On the security front, the Japan-US cooperation should be further
strengthened, taking into account implications for the strategic environment if power
projections in the Arctic Ocean become easier.

It is also appropriate to clearly place suchchanges in the strategic environment in Japan's defense policy.
From a security standpoint, the strategic environment surrounding Japan would be affected if theuse of the Arctic Ocean, previously "seas beyond reach," became easier.

In the past, it was only

specialized vessels, such as large icebreakers, that could navigate the Arctic Ocean, covered withthick ice, and power projections in the Arctic Ocean was therefore not recognized as a real issue.
If, however, the further melting of ice made it possible, for regular ships to navigate the area undercertain conditions, it would also become easier to perform military operations.

This means thatthe "background" that used to be safe would turn into a new "defense front line," particularly for
Russia, but the US would also face the same issue.
For instance, China's active moves in the Arctic Ocean have been drawing attention recently,
while China is also said to be working on improving the performance of its strategic nuclear forces,
including higher survivability and readiness, longer range, better targeting accuracy and multiple
warheads.2 It is perfectly conceivable that as a result of China succeeding in the development of
JL-2, its new SLBM (submarine-launched ballistic missile) allegedly with a range of 8,000 km,
coupled with the greater ease for China to deploy its SSBMs (ship, submersible, ballistic missile,
nuclear-powered) in the Arctic Ocean, almost the entire land mass of the US could enter in therange of JL-2 in the future and China would therefore be equipped with effective second strikecapabilities against the US.

In order to prevent a situation where the US's extended nuclear

deterrence capabilities would be affected, Japan and the US must examine deepening theircooperation in line with the changes in the strategic environment in the Arctic Ocean: more
specifically, reinforcing missile defense and the system of antisubmarine patrol that covers chokepoints like the Soya Strait and the Tsugaru Strait.
The prospect of power projections in the Arctic Ocean becoming a real issue also means that,seen from Russia' standpoint, its capabilities of maritime strategic maneuver deployment between－7－

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Europe and Asia should improve, while a new defense front – the kind never envisioned before – isemerging.

The route via the Sea of Japan out to the Western Pacific Ocean and the Bering Strait

should also change strategic implications of the Sea of Okhotsk for Russia.
Keeping abreast of the changes in the strategic environment in the Arctic Ocean, the US alreadydeveloped a comprehensive Arctic policy (National Security Presidential Directive 66) in the nameof President Bush in January 2009, which was followed in November of the same year by thedevelopment of the "Arctic Roadmap" by the US Navy.

This Roadmap provides assessments ofthe current state of affairs and future predictions about the Arctic Ocean, as well as examines a
strategy, policy and plan, investments, operations and exercises, outreach and strategic
communication activities, and aims at establishing readiness and capabilities, bearing in mind the
US's fiscal years 2010 to 2014.

The 2010 QDR (Quadrennial Defense Review) also contained astatement about the Arctic Ocean and the "Arctic Roadmap" is scheduled for review every four
years concurrently with the QDR. 3
While the US is thus a step ahead in actions to address the Arctic issues in the area of security,
Japan also needs to clearly place the changes in the strategic environment in the Arctic Ocean in its
defense policy.

Specifically, Japan should, in its National Defense Program Guidelines, assess

the changes in the strategic environment in the Arctic Ocean and, examine what actions Japan
should take.

At the same time, Japan and the US also need to engage in close strategic

consultations

and deepen their defense cooperation, looking 10 to 15 years ahead, in areas

including missile defense and antisubmarine patrol as discussed earlier.

Cooperation between the

Self-Defense Forces and the US Navy encompasses not only actions to address such threats but
also other domains, including search and rescue (SAR) operations in the event of trouble in the
Arctic Ocean.
(5) Recommendation IV: Fully taking into consideration the delicate environment of the
Arctic Ocean, Japan should harness its expertise and technology to play a leading role in thearea of environmental preservation. At the same time, it also needs to have a leading part in
the fight against global warming, bearing in mind the enormous impact that progress in themelting of ice in the Arctic Ocean can have on the Earth's environment.
Since, as explained previously, water temperatures are low, and any polluting oil is therefore
decomposed only slowly, in the Arctic Ocean, an oil spill accident would lead to the irremediable－8－Chapter 8 Recommendations on Japan's Diplomacy

destruction of the environment.

It is true that resource development and new navigation routedevelopment in the Arctic Ocean will be beneficial, but they need to be performed in a way so as toensure a balance with environmental preservation.

More specifically, every possible step must be

taken to prevent any oil spillage from occurring as a result of resource development and basic
research needs to be further advanced as to what should be done in the event of an oil spillage.

Inthe domain of maritime transportation, Japan also needs to assume a key role in the IMO's work ofdeveloping discipline for maritime safety and environmental preservation and to develop aframework of international cooperation in emergency responses to an incident involving an oil
spillage.

An idea of creating international rules like the "Protocol on Environmental Protection to

the Antarctic Treaty" is also worth exploring.
Measures to stop the progress of ice melting in the Arctic Ocean are also needed. Although it istrue that the melting of ice in the Arctic Ocean is giving rise to new "opportunities," the further
progress of this phenomenon is simply a peril to the Earth's environment, considering negative
impacts that the melting of ice in the Arctic Ocean brings about; it is said, for example, that any
surface of the Arctic Ocean covered by white-colored ice, thus reflecting the sunlight, will, once theice melts, absorb the sunlight to an increased extent and accelerate global warming as aconsequence.4 This implies the need for joint efforts by nations to take more rigorous steps tocombat global warming.

From this perspective, necessary actions include utilizing natural gas,

which emits less CO2 than coal or oil, curbing the consumption of fossil fuels themselves throughimproved energy efficiency, using nuclear energy with economic efficiency, safety and waste
disposal addressed as basic imperatives, and developing new types of energy.

Such efforts will be

conducive to fighting global warming as well as to advancing energy security, thanks to reduced
energy consumption.

As a country with the world's top-level energy efficiency, Japan must play aleading role in the fight against global warming, taking advantage of its expertise and technology.
The environment of the Arctic Ocean has many aspects that are not yet understood.

The list ofissues that require further research is extensive: rising water temperatures in the Arctic Ocean thatare said to be progressing faster than in other regions of the Earth; impacts of changes in the snow
and ice of the Arctic Ocean on the meteorological system and; impacts that the changing Arctic
environment can have on the climate of the Earth as a whole through the thermohaline circulation(a mechanism whereby the North Atlantic Deep Water is said to circulate through the Indian Ocean
and the Pacific Ocean in the course of 2,000 years).

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Given its long-term accumulation ofChapter 8 Recommendations for Japan's Diplomacy

scientific research in the polar zone, Japan should build more on that in the future and contribute toimproving international expertise on the environment of the Arctic Ocean through international
research collaboration, communication between researchers and other such means.

For thepurpose of researching the environment of the Arctic Ocean, there is also a need to have a platformthat enables research to be performed onsite, as well as a need to have a robust research structure,including the construction of a new icebreaker or the utilization of the Antarctica observation vessel"Shirase."(6) Recommendation V: Active diplomacy should be pursued so that governance founded on apeaceful and stable international order be ensured in the Arctic Ocean. An appropriate
approach would be one leading to greater "common interests" of the countries concerned,
including Arctic States and countries surrounding Japan.
Arctic governance needs to be based on a mindset directed towards how "commons" should beprotected by means of concerted efforts by nations, not on a "zero-sum" type of mindset.

Fromsuch a viewpoint, Japan, while ensuring its interests, must work on expanding "common interests"of the international community through large and small multinational frameworks and bilateral
cooperation.

Japan should take the initiative in the area of international rules on the Arctic.

Specifically, Japan should take a lead in clarifying the provisions of the UNCLOS as well as
establishing new operational rules on matters not covered by the UNCLOS, based on theConvention and other relevant rules of international law.
The first name that comes up as a venue for coordinating cooperation associated with the Arctic
Ocean is the Arctic Council, which consists of eight Arctic States as members and other stakeholder
countries, international organizations and other entities participating as observers.

Japan iscurrently an ad-hoc observer but has made an application for permanent observer status, which isslated for deliberation at the 2013 Arctic Council Ministerial Meeting.

While its very origin as aforum of high-level talks between Arctic States undeniably gives it an exclusive trait, as is manifest
in its membership consisting exclusively of Arctic States, it does carry a certain level of legitimacy- it is participated in by influential countries like the US and Russia and is centered around Arctic
coastal nations that have the closest interests in the Arctic Ocean – and is therefore a frameworkthat Japan should also attach importance to.

Being an observer, Japan is not allowed to take partin decision-making; it is nevertheless advisable that it should build up contributions in scientific－10－Chapter 8 Recommendations on Japan's Diplomacy

research, environmental preservation and other areas associated with the polar zone to make Japan's
arguments more persuasive and to exert as much positive influence as possible on decision-making
at the Arctic Council.
That being the case, the Arctic Council will remain just one of the several diplomatic means aslong as Japan has no decision-making power. Japan should, while ensuring its national interests,
also contribute to the governance in the Arctic Ocean through other international organizations,large and small multinational frameworks, and bilateral cooperation.

One example of an initiativethat Japan must play a leading role in is the work in progress at the IMO to develop a Polar Code inconnection with marine safety and environmental preservation.

Another point is the makeup of

the G8, with the US, Russia and Canada being Arctic Council members, the UK, France andGermany observers and Japan and Italy ad-hoc observers; considering that the G8 is a framework
to play a significant role in global governance, it would be useful to broach the Arctic issue in thatframework.

In addition, Japan should contribute to the governance and promote cooperation

associated with the Arctic Ocean, through the use of a variety of diplomatic means, including
cooperation with its ally the US, cooperation under a Japan-US-Russia framework and cooperation
with China and Korea.
One should not be oblivious of the indigenous peoples in the context of the governance in the
Arctic region. Climate change in the Arctic Ocean has deprived the indigenous peoples of theirlivelihood and seriously affected their foundation of life.

The Arctic Council has raised the

involvement of indigenous peoples as a significant point at issue.

If Japan is to be vigorously

involved with the Arctic issue, it will need to attend to the issue of environmental preservation, amatter that might greatly affect the lives of the indigenous peoples.
(7) Recommendation VI: The Japanese government's Arctic policy structure should be
reinforced. Specifically, the Cabinet Secretariat should play a role of the headquarters sothat the relevant ministries, including the Ministry of Foreign Affairs, the Ministry of
Economy, Trade and Industry, the Ministry of Land, Infrastructure, Transport and Tourism,
the Ministry of Defense, the Ministry of the Environment, and the Ministry of Education,
Culture, Sports, Science and Technology, can implement coherent policies.
As described above, issues associated with the Arctic region are wide-ranging, from resources tomarine transportation, security, environment, governance and much more.

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The JapaneseChapter 8 Recommendations for Japan's Diplomacy

government has been building up a steady contribution thus far in the form of participation in
discussions in the Arctic Council, scientific research on the polar zone and in other forms but,going forward, will be required to boost its action much more as an all-government effort,
considering substantial impact of the various issues in the Arctic Ocean on Japan's national interestsand common international interests.

To that end, it needs to set up a headquarters function in the

Cabinet Secretariat and sort out complex and entangled issues in order to work out a systematiccourse of action.

One idea is to establish a "ministerial meeting on Arctic issues," while they canalso be presented as a main agenda item at a "National Security Council" of which establishment iscurrently being considered.

By means of such and other frameworks, the Administration should

articulate strategies and measures and it would be useful to showcase their orientation and details in
the form of such means as "Arctic White Paper."As a further move for the purpose of actively

participating in and contributing to a variety of large and small multinational or other forms of
discussion, Japan should appoint an ambassador in charge of the Arctic, with examples of Arctic
Council member countries in mind.

-Notes1

US Geological Survey, “USGS Release: 90 Billion Barrels of Oil and 1,670 Trillion Cubic Feet of

Natural Gas Assessed in the Arctic,” July 23, 2008, http://www.usgs.gov/newsroom/article.asp?ID=1980
2"Defense of Japan (White Paper on Defense)" 2012, in the section about the military posture under (1)Nuclear forces and missile forces in subsection 4, Section 3: China, Chapter I.
3

US NAVY ARCTIC ROADMAP、” Department of the Navy, October, 20094

Mutsuyoshi Nishimura, "Environmental Issues in the Arctic Circle," Section 1, Chapter 5 of this Report(The Japan Institute of International Affairs, 2013).

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