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ENVIRONMENT

Norway’s parliament greenlights controversial deep-sea mining exploration

Norway's parliament on Tuesday adopted a government plan to open up parts of its seabed to mining exploration, despite protests from activists and scientists' warnings about the uncertain environmental impact.

Pictured is the Norwegian parliament.
Norway's parliament has approved deep-sea mining exploration. Pictured is the Norwegian parliament. Photo by Marco Süssi on Unsplash

The proposal to gradually open up a 280,000-square-kilometre (108,100 square mile) area, mostly in the Arctic, was approved by the Storting, with 80 votes in favour and 20 against.

A small group of protesters had gathered outside the parliament in Oslo, displaying banners reading “Stop deep sea mining” and “Norway protect our oceans”.

“They are opening a very new, vulnerable and enormous area that has been under-explored by scientists,” Haldis Tjeldflaat Helle of Greenpeace Norway told AFP.

Already Western Europe’s largest oil and gas producer, the Scandinavian nation is now set to become one of the first countries to explore the ocean floor for minerals crucial for renewable energy technology, potentially making it a major mineral producer.

At the same time, deep-sea mining is controversial due to its potential impact on vulnerable marine ecosystems.

In early 2023, the Norwegian Offshore Directorate published a report concluding that “substantial resources are in place on the seabed” including minerals such as copper, zinc and cobalt.

The Labour-led coalition minority government then in June proposed allowing mining of the country’s seabed in the Arctic region.

In December it announced that it had reached a deal with opposition parties to secure parliamentary support to move forward.

“We need minerals because we want to lead a green transition in the form of fuel cells and solar panels, of electric cars and mobile phones,” Labour member of parliament Marianne Sivertsen Naess told a press conference at the time.

– Knowledge gaps –

NGOs and scientists have meanwhile warned that deep-sea mining could damage habitats and harm species that are little understood, but are potentially
important to the food chain.

In addition, they point to the risk of disrupting the ocean’s capacity to absorb carbon emitted by human activities, and the noise that could disturb species such as whales.

“We are very worried about what this will mean for both ecosystems in the Arctic. What it will mean for the fisheries of both Norway and other countries, and also Norwegians and Norway’s international reputation as a country that is supposed to take climate and nature seriously,” Tjeldflaat Helle said.

The environmental activist added that they were also worried that Norway “chooses this time to send the signal that they will push forward on deep sea mining when the rest of the world is discussing a moratorium or a precautionary pause on this industry.”

Several countries, including France and the UK, have called for a moratorium on deep-sea mining.

The Norwegian plan stresses that “environmental considerations” will be taken into account in all stages of the process and “extraction will only be authorised if the licensee’s extraction plan demonstrates that extraction can take place in a sustainable and responsible manner.”

Among others, Norway’s Institute of Marine Research and the Norwegian Polar Institute have warned that there is a severe lack of knowledge necessary to assess what the environmental impact of deep-sea mining would be.

Currently there is no time schedule for when exploration and later potential mining could begin.

In the proposal, the government stressed that “the fact that the state opens an area for mineral extraction does not mean that extraction activities are initiated immediately.”

Instead it means that licensing authorities can began the process of granting licenses, while the state can “continue the mapping of Norwegian seabed minerals.”

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TAXES

Will Norway’s new exit tax slow the exodus of ultra-rich from the country?

You can check out -- but you still have to pay! Norway is looking for ways to hang onto its ultra-rich who are increasingly moving abroad to escape one of the rare European countries to impose a wealth tax.

Will Norway's new exit tax slow the exodus of ultra-rich from the country?

Industrialist Kjell Inge Røkke, former cross-country ski legend Bjørn Dæhlie, and the father of football star Erling Haaland are among the dozens of super-wealthy who have packed up and left in recent years.

The reason? The centre-left government in power since 2021 has hiked the wealth tax from 0.85 percent to one percent — and to 1.1 percent for the very wealthiest — and raised the dividend tax.

Norway, Spain and Switzerland are the only European countries that have a tax on net wealth. In Norway it also applies to unrealised capital gains (gains not yet realised through the sale of shares, for example).

Owners of companies are among those hit hardest, often drawing a modest salary even though their company has a high value.

“If your salary is one million and you have to pay three million in (wealth) tax, it’s clear that it’s untenable,” said Tord Ueland Kolstad, a real estate magnate who “grudgingly” moved to Lucerne, Switzerland in 2022.

“The system is designed so that it confiscates more than what you can produce,” he said.

To pay a wealth tax which can exceed their yearly income, entrepreneurs often need to take out dividends, hampering their company’s capacity to invest.

And those dividends are also subject to a tax rate of 37.84 percent.

“So basically you have two options: either leave Norway, or sell your company,” said Kolstad.

‘Breach of the social contract’ 

Between 2021 and 2023, more than 100 of Norway’s wealthiest people went into exile, with the large majority relocating to Switzerland.

Others transferred their wealth to heirs already residing abroad, as Norway does not have inheritance tax.

Labour Prime Minister Jonas Gahr Støre has criticised the mini-exodus, stressing that taxes are what pay for Norway’s generous welfare system.

“When you’ve made your wealth in Norway, put your kids in school, benefitted from the health care system, driven on the roads and reaped the rewards of its research, it’s a breach of the social contract,” he said in a speech in parliament.

The government is now working to tighten the country’s “exit tax”.

People who move abroad would have 12 years to pay the exit tax — also 37.84 percent of gains made in Norway from shares and other sources over many years — that has until now been easy to circumvent or defer.

“The aim is that gains made in Norway be taxed in Norway,” explained Erlend Grimstad, a state secretary in the finance ministry.

“Our nurses and teachers have to hand over a large share of their earnings to society in the form of taxes,” he said.

“If they see that the most well-off can simply avoid contributing their share by leaving the country, that undermines the legitimacy of the tax system.”

‘Don’t come to Norway’

That does little to quell the anger of the ultra-rich.

Christer Dalsbøe, who started his own company, made buzz on social media recently singing a little ditty discouraging other entrepreneurs from starting businesses in the country.

“Don’t come to Norway, We will tax you till you’re poor. And when you have nothing left, We will tax you a little more,” he sang, sitting at a piano.

The liberal think tank Civita said the government’s plans to tighten the “exit tax” were in reality aimed at setting up roadblocks for millionaires and billionaires.

“Instead of attacking the reasons that push them into exile, meaning easing the tax burden on Norwegian shareholders, they seem to prefer to set up regulatory obstacles,” said Civita economist Mathilde Fasting.

In Lucerne, Tord Ueland Kolstad said he can receive “several calls a week” from other Norwegians considering moving to Switzerland.

“The flow has not stopped. Maybe it is just beginning.”

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