by Anita Elizebeth Babu
The Arctic Paradox is fascinating. On the one hand, the hostile territory attracts humans in draws – in cruises and cargo ships. On the other, there is a dying urge to protect a unique ecosystem that might soon be faceless. By the year 2050, there will be a summer when there is no ice in the region. Irreversible as the consequences will be, this will revolutionise the way the world transports its goods. This blog explains how in a matchless irony, Arctic shipping routes would considerably reduce the carbon footprint left by ships navigating roundabout routes and touches upon how the sector that determines the health of the maritime industry should cope up.
Reckless to the heartthrobs of a living ecosystem
Norilsk Nickel – the world’s largest palladium producer and a top producer of allied metals, is located in an Arctic city, better known for being the world’s largest hotspot for emitting acid rain causing SO2. The metallurgical giant has been responsible for turning a river red, recurrent fuel leakage, and improper disposal of wastewater, with devastating effects on the Tundra. Billions of dollars imposed in fines by Russian authorities and namesake damage control could possible not stop the artic from melting, an area that is so significant to Russia. Geographically with its funereal ecological record, the polluter may look like one of the most direct contributors to the melting icescape. However, Nornickel is just one story, one contributor to the globally funded and enthusiastically produced multipart series for generations, called Global warming.
Troubled ice sheets?
Ice sheets are high on reflectivity and reflect most sunlight it receives, keeping the entire Northern Hemisphere cool, while the open waters absorb the heat and melt the ice. There is now a reduction in multilayer sea ice, and there is increased dynamics in the motion of the ice and unusual weather fluctuations every summer in this sensitive region. The atmosphere higher up the large melting icescape is warmer because the melting ice releases much to the atmosphere, and the southerly flow of warm wind ensures that neighbouring areas witness record degrees of temperatures.[1] 2016 and 2020 rank 1 and 2 for the hottest years the planet has seen, and the Arctic sea ice coverage on both years was tied to be the smallest on record. The Arctic, in its current form, will soon be a memory for the photographs. Whole countries like Tuvalu and similar island groups could be largely underwater by the end of the century because of the rising sea levels from melting ice. Indeed, this melt has profound consequences.
However, the melt has a different, more pronounced effect—where there was once ice, there is now liquid, navigable water. Commercial transit routes through the Arctic, which were unthinkable 100 years ago, is now not only thinkable but very much possible, even in extreme weather conditions with icebreakers. The very DNA of maritime transport is slotted for a makeover.
A possible Copernican revolution in maritime transport
Maritime shipping is the core of world trade. It is responsible for 70 per cent of the value and 80 of the volume of global exchange. The southern sea route between Europe and Asia is the most crucial route globally, and the constantly warming climate is projecting a new alternative for its hitherto unquestioned dominance.[2] The northern route can be broadly divided into two corridors – the northwest and the northeast corridors.[3] A third, but even more unexplored addition would be the Transpolar Sea route that traverses right through the North Pole. The northern sea route in particular, would cut the traditional southern route by almost 20 days or 30 per cent of the current travel time.
The Northwest Passage would have revolutionised maritime trade—if it wasn’t for the fact that it is covered in ice. A navigable sea route was long thought to be a myth until Roald Amundsen, and his crewmen snaked through the ice in their small ship in 1906. Commercial transit was still an elusive dream. More than 100 years later, in September of 2013, however, for the very first time, a commercial bulk carrier, the MS Nordic Orion, transited the Northwest Passage on its journey from Vancouver, Canada, to Pori, Finland. This ship saved $80,000 in fuel costs and was able to take 25% more cargo than if it had taken the route crossing the Panama Canal, where the depth is a limitation for huge ships and cargo. Ironically, global warming is opening a route that is better for the environment.
Risky Artic Marine Insurance
Like other forms of insurance, marine insurance is based on predictability and the insurer should be able to reasonably foresee what risks he is undertaking with the hindsight of precedent related to the risks.[4] Particularly, with respect to Arctic marine insurance, an important form of warranty would be navigation warranty. This kind of a warranty clearly demarcates the navigable territory that an insured vessel may traverse in, during the currency of a policy.[5] Unsurprisingly, the marine insurance industry refrains from covering Arctic perils by imposing a navigation warranty on ships purporting to traverse the Arctic, i.e; insurers would be discharged from liability for miscreant vessels that trespass into unnavigable territory.[6]
The English Court in Popham and Willett v. St Petersburg Ins. Co,[7] was to adjudge whether a ship that had ran into ice in the Arctic waters was covered under the notion of ‘perils of the sea’, which was afforded protection under the insurance policy. It was the court’s understanding that circumstances beyond ordinary with respect to the weather and tide, may trigger fortuitous accidents at the sea. It was noted that what may fall into the definition of ordinary conditions for Arctic waters, may be extraordinary for non-Arctic waters. Understandably, therefore, the risks that attach to Arctic marine insurance flow from a peculiar set of risks that relate to the region.
The sources of hazards envisioned by the Polar Code is clear in that navigating the Arctic waters are accompanied by innumerable natural and other, dangers. The presence of heavy ice and freezing low temperatures are only augmented by the extended periods of darkness during the night and the high latitude. If vessels meet with accidents or say, freeze mid transit, search and rescue operations are near nil to top it all. This is coupled with issues in communication, procuring competent crew and even the lack of data including hydrographic, bathymetric and mapping information. The risk to ship and cargo is compounded as against those normally encountered at sea.
It is true that insurers will need more accurate and reliable data as to the risks involved in ships transiting Arctic shipping routes, to properly gauge and set parameters for insurance coverage for the same.[8] But understandably, perils of the sea in the Arctic can only be determined on a case-by-case basis. Additionally, any damage caused to this ecologically sensitive region may invite fines in the nimiety. Given the co-existence of private contractual law so intrinsic to insurance, coupled with increased maritime traffic and threats to the ecosystem, vertical stress from regulatory regimes and convention instruments should be regularised where possible.[9] Therefore, soundly articulated legislation would greatly help attenuate the existing quagmire for insurers.
The ecological cost – to exploit or to safeguard.
Global warming is melting the Arctic – a transition that will threaten the world’s climatic balance, apart from sinking whole countries like Tuvalu. So it is just not the Polar Bears, but its tragedy with a capital T. The question ultimately narrows down to whether the path that is opening up thanks to the fast heating globe is in fact worth the damage.
The Polar Silk Road, by that name, was envisaged within the flagship transcontinental initiative of even China – quite a distant neighbour to the region. Even so, in order for this route to become operational, the huge logistical infrastructure and pro-social investments activating these areas are crucial.
An ice-free arctic would mean that ships traveling between Japan and western Europe, for example, instead of heading south, across the Indian Ocean, through the Suez Canal, and across the Mediterranean sea, will be able to head north through the Bering strait, directly across the Arctic ocean, and down between Greenland and Norway to Europe. Having said that, an allied branch that opens up as a natural corollary is that of marine insurance. A plethora of Arctic waters-specific issues pop into the fold that relate to the ice-laden waters’ unique nature. These need to be effectively addressed through international instruments to allay the fears of voyagers and insurers.
An ice-free Arctic would bring down the 13,000 mile route of today to a 7,000 mile route. It also has the potential to slash shipping prices in half and that means cheaper products across the entire world. But at what cost? Every degree Celsius of increase in the global temperatures will burn holes in exchequers worldwide. Furthermore, between 2030 and 2050, the number of deaths that climate change is expected to trigger is 250,000 per year. Surely, cheap goods balanced against such costs may pose difficult questions. Nevertheless, the reality we are in, is beyond irreversible, if that is any consolation for ethics.
This article is authored by Anita Elizebeth Babu, a 4th year student at the National University of Advanced Legal Studies (NUALS) Kochi.
[1] Merrin L. Macrae et al., Observed and Projected Climate Change in the Churchill Region of the Hudson Bay Lowlands and Implications for Pond Sustainability, 46 Arctic, Antarctic, and Alpine Research 272 (2014).
[2] Miaojia Liu & Jacob Kronbak, The potential economic viability of using the Northern Sea Route (NSR) as an alternative route between Asia and Europe, 18 Journal of Transport Geography 434 (2010).
[3] Vasilii Erokhin & GAO Tianming, Northern Sea Route: an Alternative Transport Corridor within China’s Belt and Road Initiative, in THE BELT AND ROAD INITIATIVE 146–167 (Keyuan Zou ed., 2017).
[4] E.R.HARDY IVAMY, MARINE INSURANCE 3 (4th ed., 1985).
[5] BARIS SOYER, WARRANTIES IN MARINE INSURANCE 13 (2001).
[6] HOWARD BENNETT, THE LAW OF MARINE INSURANCE (2nd ed., 2006).
[7] Popham and Willett v. St Petersburg Ins. Co., (1904) 10 Com Cas 31.
[8] M. Tamvakis et al., Economy and Commercial Viability of the Northern Sea Route, in THE NATURAL AND SOCIETAL CHALLENGES OF THE NORTHERN SEA ROUTE: A REFERENCE WORK 221-280 (W. Ostreng ed., 1999).
[9] United Nations Convention on the Law of the Sea, Dec. 10, 1982, 1833 U.N.T.S. 397; International Convention for the Safety of Life at Sea, 1974, Nov. 1, 1974, 1184 UNTS 3; Protocol of 1978 relating to the International Convention for the prevention of pollution from ships, 1973, Oct. 2, 1983 and 1978 Protocol Relating to the 1973 International Convention for the Prevention of Pollution from Ships, Feb. 17, 1978, 1340 UNTS 61; International Code for Ships Operating In Polar Waters, MEPC 68/21/Add.1.
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