Norway’s high court confirms Norwegian control of Arctic resources

Norway's highest court confirmed on Monday the Norwegian state's exclusive right to natural resources on the continental shelf around the strategically important Svalbard archipelago in the Arctic.

Published: 20 March 2023 15:19 CET

A ruling has found Norway controls resources in and around Svalbard. Pictured are homes on Svalbard.

The case sets a precedent with major potential repercussions. The 15 judges of the Supreme Court unanimously rejected a lawsuit brought by the Latvian fishing company SIA North STAR, which had demanded the right to fish for snow crab on the continental shelf around Svalbard.

At the heart of the dispute are different interpretations of the Spitsbergen Treaty, the 1920 legal document governing the Svalbard archipelago. Beyond the question of snow crab — considered a delicacy in Asia — the case was seen as an important test to determine who would control other lucrative resources thought to lie beneath the continental shelf, like oil and gas or minerals.

Norway has long insisted it has exclusive rights. The Spitsbergen Treaty recognises “the full and absolute sovereignty of Norway” over Svalbard, but also allows nationals from other signatory countries to “enjoy equally the rights of fishing and hunting in the territories”.

As a result, Russia is able to maintain a mining community in the archipelago, located halfway between Europe’s mainland and the North Pole, in a region its Northern Fleet transits en route to the Atlantic.

But the wording of the treaty limits its geographic scope to the archipelago’s land and “territorial waters” — a concept that today denotes a maritime zone of 12 nautical miles but which was not specifically defined in 1920.

Treaty interpretation

According to SIA North STAR, the spirit of the treaty indicates that equal rights should apply to the entire continental shelf, a much wider zone, and a concept that also did not exist legally when the treaty was drawn up.

The Supreme Court found in favour of the Norwegian state, ruling that the wording of the treaty could not be subjected to an “extensible interpretation”.

“There has been no development in international law which would result in the notion of ‘territorial waters’ today including areas beyond territorial waters,” it wrote in its verdict.

Contrary to most other treaty signatories — more than 40 states, including Latvia, France, Russia, the United Kingdom and the United States — Norway is almost the only one that uses a restrictive interpretation of the treaty. The issue has never been brought before an international court.

“We are disappointed but we are not really surprised by the verdict, this case has a lot of legal and political aspects,” the lawyer for the Latvian company, Hallvard Ostgard, told AFP.

He said he would like to see the case brought before the International Court of Justice, which only reviews cases brought by states. The Norwegian state said it was “satisfied” with the ruling.

“It’s an important national clarification for a question that has been raised on several occasions in Norwegian courts,” Foreign Minister Anniken Huitfeldt told AFP.

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The archipelago is located halfway between mainland Norway and the North Pole, in an Arctic region that has become a geopolitical and economic hotspot as the ice melts and relations grow ever frostier between Russia and the West.

For €300 million ($326 million), interested parties can acquire the remote Sore Fagerfjord property in southwestern Svalbard.

Measuring 60 square kilometres (23 square miles) — about the size of Manhattan — the property is home to mountains, plains, a glacier and about five kilometres of coastline, but no infrastructure.

“It’s the last private land in Svalbard, and, to our knowledge, the last private land in the world’s High Arctic,” said lawyer Per Kyllingstad, who represents the sellers.

“The Chinese are naturally potential buyers since they’ve been showing a real interest in the Arctic and Svalbard for a long time,” he told AFP, adding that he had received “concrete signs of interest” from the country.

Special treaty

Since China’s 2018 white paper on the Arctic — a sign of its interest in the region — the country has defined itself a “near-Arctic state” and plans to play a growing role in the region.

Svalbard is governed by a 1920 international treaty that leaves ample room for foreign interests.

It recognises Norway’s sovereignty over Svalbard, but citizens of all signatories — including China — are equally entitled to exploit the region’s natural resources.

Russia, for example, has maintained a coal mining community on Svalbard, via the state-run company Trust Arktikugol, for decades.

But times have changed.

Keen to protect its sovereignty, Norway would not look kindly on the Sore Fagerfjord property falling into foreign hands.

Especially hands in China, which Norway’s intelligence services say poses the biggest security risk to the Scandinavian country after Russia.

Norway’s Attorney General has therefore ordered the owners — a company controlled by a Russian-born Norwegian, according to local media — to call off the planned sale.

“The land can’t be sold without the Norwegian authorities’ approval,” Trade and Industry Minister Cecilie Myrseth told AFP.

“Nor is it possible to hold negotiations about the property,” she added.

That argument is based on clauses of an old loan granted by the state in 1919. Kyllingstad insists the clauses’ statute of limitations has expired.