How an “Observer Plus” Club Could Strengthen the Arctic Council’s Governance
The Fletcher Forum is proud to present this essay showcasing an innovative solution for Arctic governance. This scholarly piece sets the stage for our upcoming Winter 2024 print edition titled 'Beyond the Ice: The Emerging Arctic Arena.' In this edition, expect an array of original research covering diverse aspects of the Arctic, spanning climate, security, economics, and more.
By Zheng Cui
The Arctic Council is currently facing two critical challenges that converge to offer the platform a timely opportunity to address foundational concerns. First, the council faces continued funding challenges from overstretched resources and inefficient bureaucratic structures. Second, non-Arctic states and actors are expressing growing interest in the Arctic and challenging the council’s exclusivity. To meet the Arctic Council’s financial and geopolitical needs, the council should implement a new concept based on the existing observer mechanism: the Observers Plus Club (OP Club). The OP Club would increase funding for the council’s projects while bridging the gap between Arctic and non-Arctic entities.
THE ARCTIC COUNCIL’S CHALLENGES
The Arctic Council includes eight Arctic states (Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States), six permanent participants representing Indigenous groups, and a plethora of global observers. However, even with such robust membership, the Arctic Council lacks the stable funding to plan, implement, and monitor its projects. Inadequate and inconsistent funding poses systematic challenges that hampers the practicality of the Arctic Council. The Arctic Council has no programming budgets, with projects funded ad hoc by the states who advocated for them. The Secretariat is funded equally by all member states of the Arctic Council, except for Norway, which sponsors half of the Secretariat’s budget as the host country. While the Secretariat enjoys stable finances, fluctuations in project-based funds hinder both short-term and long-term program planning. In addition, the number of projects that the Arctic Council undertakes has increased dramatically since its creation in 1996, further stretching the already thin budget.
Efforts to address this problem have been unsuccessful. During the United States’ 2015-2017 chairmanship, the Secretariat asked for a comprehensive review and categorization of the funding sources. The Algu Fund, established in 2017, aimed to provide stable and long-term funding for Indigenous groups who are permanent participants in the Arctic Council. However, reforms related to working group finances have yet to materialize, leaving many initiatives grappling with financial uncertainty.
A separate problem is that the Arctic Council lacks fully developed mechanisms for non-Arctic entities to participate in the region. As one of, if not the most, important platforms for Arctic governance, the Arctic Council includes several diverse actors. The current make-up of observers includes non-Arctic states, intergovernmental organizations, and non-governmental organizations. As of now, Observers must find an Arctic state or an Indigenous permanent participant to co-propose new projects to the Arctic Council. This greatly limits the growing interest in the Arctic by Observer countries. In addition, Observers are only allowed to sponsor Arctic Council projects at levels no greater than the contribution of the project's host country.
While the current structure ensures the dominant position of the Arctic states in the Arctic Council, it significantly limits the potential of the Observers. With economically powerful non-Arctic nations like the People’s Republic of China (PRC), Japan, and South Korea demonstrating increased interest in Arctic governance, the current Arctic Council structure fails to provide participation pathways that non-Arctic nations desire.
INTRODUCING THE OBSERVERS’ PLUS CLUB
The Arctic Council has a unique opportunity to tackle two problems at once by linking the desire of non-Arctic entities to participate with the need for increased funding. Building on the existing model of Observers serving as norm entrepreneurs in Arctic governance, the Arctic Council should develop an Observers’ Plus Club (OP Club), which would require members to financially commit to sponsoring working group projects and providing funding for the permanent participants. In exchange, OP Club members would have the ability to independently bring Arctic-related issues for discussion and propose new projects.
Observers demonstrating interest would be put into "candidacy” status, thereby removing the current limitations for financial contribution and giving the power to propose new projects within the working groups. The Arctic countries would then have three years to examine and evaluate the intentions and potential impact of a candidate. Subsequently, a two-thirds majority vote would be required to officially induct the Observer to the OP club. The two-thirds majority vote ensures a fair majority without creating impossible barriers for collective decision-making. The Secretariat would review existing members of the Observer Plus Club every three years. Criteria for evaluation might include demonstrating a strong interest in the wellbeing of the Arctic, willingness to promote and engage in different sustainable agendas, and establishing accountable commitments to Arctic governance and development. States that do not consistently deliver satisfactory outcomes, as assessed by Arctic countries, would receive a warning, constraints on participation, and eventual removal from the club, with each stage given a one-year period before moving to the next.
The advantages of this framework are numerous. By enabling non-Arctic states to financially contribute and propose projects, the OP Club could significantly bolster the Council's project funding, allowing for a more diverse range of initiatives and enhancing the Council's capacity for environmental protection and sustainable development. Moreover, this model would provide a balanced approach to inclusivity, empowering non-Arctic entities to participate in Arctic governance while maintaining the centrality of Arctic states and indigenous peoples. The review process for candidacy and membership ensures that only genuinely committed entities are involved, with the periodic review fostering ongoing accountability. The OP Club model establishes a framework to link the economic needs of the Arctic Council with the political needs of the non-Arctic nations.
It is also important to acknowledge that the Arctic Council nations are some of the wealthiest in the world, bringing into question why monetary incentives would be attractive. Three of the eight Arctic nations (the United States, Norway, and Denmark) rank in the world’s top ten wealthiest states, as measured by GDP per capita. Economic incentives and capital alone will not be sufficient to attract support. Luckily, the OP model also has political and strategic implications. If the Arctic Council fails, like the League of Nations or the International Refugee Organization, there is no guarantee of the power distribution in the next governance regime. By allowing more non-Arctic nations' involvement, the Arctic Council can increase its legitimacy as it builds itself to be the most inclusive and efficient multilateral cooperation platform for Arctic governance, with the Arctic nations at its helm. Strategically, demonstrating the inclusiveness of Arctic governance would encourage more nations to be involved in the region, further strengthening a collaborative environment where shared interests in scientific research, sustainable development, and indigenous rights can be pursued. Lastly, Arctic nations that are concerned about their diminishing influence can rest on the difference between agenda-setting and voting rights. While members of the OP Club can propose a limited number of agenda items, the club does not give its members voting rights.
In October 2022, the PRC’s Special Envoy to the Arctic Feng Gao announced that the PRC would not recognize the Arctic Council without Russia's participation. In May 2023, Norway assumed the chairmanship from Russia. While Norway has demonstrated its ability to foster a smooth transition amid the political tensions between Russia and the West, future cooperation remains difficult due to the lack of trust among Arctic nations. The Observer Plus model provides a way to build a more effective and impactful Arctic Council that will be the backbone of Arctic international cooperation. With proper monitoring and management, this model could lay the foundation for a more effective, inclusive, and responsible Arctic governance regime.
Zheng Cui is a a master’s degree candidate at The Fletcher School and a research intern at the Stockholm Environment Institute. His current research focuses on international development and climate policy. His work experience spans various institutions in the United States and People’s Republic of China. Most recently, Zheng was a research intern at the Carnegie China Center at Tsinghua University focusing on global governance issues and the distribution of public goods in the Middle East. Zheng has also interned at the Shanghai Institute of American Studies and the Chongyang Institute for Financial Studies at Renmin University. He received his B.A. in international relations from The George Washington University, where he concentrated on East Asia regional studies and international development.
“Arctic Council Flags” is by arctic_council and is licensed under CC BY-NC-ND 2.0.
