China's BRI on the Polar Silk Road: Evolving Labor Agenda in the Arctic.

• Author: Brown, Ronald C.
• Position: Belt and Road Initiative

ABSTRACT

China is implementing its Belt and Road Initiative (BRI) into the Arctic area that is yet fashioning its labor law norms and transitioning from a subsistence to a future commercial economy. This involves eight countries which have borders on the vast area of the Arctic Ocean, which with global warming are looking toward expanding commercial activities. Finland, Norway, Sweden, Iceland, Greenland (Denmark), Russia, U.S., and Canada have come together to form the Arctic Council, which is the "leading intergovernmental forum promoting cooperation, coordination and interaction among the Arctic States, Arctic indigenous communities and other Arctic inhabitants on common Arctic issues, in particular on issues of sustainable development and environmental protection in the Arctic." They often are referred to as the "Arctic 8" and there are also eight "permanent participants" with councils or associations from the various indigenous peoples' communities.

Within the Arctic Circle there are about four million inhabitants, half of which are Russians, and include indigenous peoples. The types of anticipated projects may include scientific stations, roads coming from the EU, ports, and port facilities, i.e., all the construction that comes with developmental building. With BRI projects, China usually employs many of its own citizens as workers as well as hiring locally, if available. Manpower and labor force issues often accompany BRI projects, and the questions raised include, what are the labor norms in the Arctic and what labor dispute mechanisms are available? Certainly, territorial labor laws control, but there are special needs and rules in the Arctic Circle, and some of the "Arctic 8" are European Union members who have special rules on posted workers from the EU and the Chinese may have private international arbitration agreements covering workers.

Some BRI projects are moving forward in Norway and Finland and other EU Member States even without BRI MOU agreements. Currently, only Russia has embraced BRI cooperation and is moving ahead on projects. The U.S. has been active in attempting to persuade some Arctic 8 countries to not enter BRI projects or MOU cooperation agreements, for professed security concerns.

Finally, discussion will include the role of private versus government regulatory standards and dispute resolution, as well as potential cooperation or trade agreements that could include labor protection provisions. Currently, Iceland has an FTA with China, though the labor provisions are weak. Also, Russia, as a member of the Eurasian Economic Union (EAEU), signed an FTA with China in 2018; the EAEU is a trade bloc (often cited as Russia's answer to the EU), currently including Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.

The article will identify the types of labor issues that could arise as China's BRI moves up the Polar Silk Road and discuss possible regulatory approaches.

TABLE OF CONTENTS Table of Contents Abstract I. Introduction II. Polar (Arctic) Silk Road A. Arctic Circle and "Arctic 8" Countries Arctic States ("Arctic 8") Arctic Council Arctic Economic Council ("Arctic 8") B. The Polar BRI Plan in the Arctic Circle 1. Land and Sea 2. In the Arctic Circle C. Labor in the Arctic Circle 1. Labor Profile 2. Potential BRI Labor Issues in the Arctic III. Legal Environment A. International Guidance 1. MOUs, BITs, FT As, and Other Agreements MOUs BITs FT As Other Agreements: China- EAEU Agreement (including Russia). 1. ILO 2. Table 7: Relevant Arctic Ratifications of General International Labour Organization 3. Related Arctic Ocean Treaties Arctic 8 Agreements International Agreement Treaties B. Domestic Labor Laws and Private Contracts in Arctic 8 Countries affecting Migrant and Posted Workers IV. Analysis A. EMERGING CHALLENGES OR NEW PERSPECTIVE? B. Future Labor Agenda V. Conclusion I. INTRODUCTION

The Arctic Region (1) is in many ways no different from other places on earth and certain universal truths and irrefutable facts apply: ice melts when warmed; commercial development usually brings environmental changes, if not degradation; and construction of commercial infrastructure requires labor, which inevitably gives rise to labor issues. This paper addresses these evolving phenomena in the Arctic Circle.

The circumference of the Arctic Circle is approximately 10,500 miles. (2) The area north of the Circle is about 7,700,000 square miles and covers roughly 4% of Earth's surface. (3) With climate warming and ice melting, the Arctic Circle is presenting itself as navigable, with the anticipation of exploiting oil and gas, ore fields, and using Northwestern shipping routes and ports, as well as developing related infrastructure, including roads, railroads, and storage facilities. These developments raise concerns about environmental protections, military security, law of the seas, and labor needs and protections for the development projects.

The eight bordering countries have formed the Arctic Council ("Arctic 8") to oversee many of these concerns in this Arctic area. (4) At the same time, China purports to be a "near-Arctic State" (5) and announced its intention to provide infrastructural funding for Arctic development through its Belt and Road Initiative (BRI) called the Polar Silk Road Plan. (6) Since 2013, China is a permanent observer of the Arctic Council. (7) The population of inhabitants who live within the Arctic Circle on lands bordering the Arctic Ocean, including indigenous peoples, is roughly four million. (8) Approximately half of the Arctic population lives in Russia. (9) It is anticipated, therefore, that workers on BRI and other developmental projects in a given Arctic country will be composed of in-country citizens, indigenous peoples, and migrant labor from outside the Arctic country.

The governing legal regime is generally fortified with local and country laws and regulations; but there are also international treaties covering aspects of the land and sea in the Arctic Circle that must be considered.

As commercial and other developments move forward, perhaps fueled in part with China's BRI investments and projects, this paper gives some attention to the labor law agenda that will regulate the manpower and the issues so as to anticipate and plan for, perhaps by a multi-country FT A with labor and environmental provisions. Even, where national law controls, the Arctic 8 may have influence over the regulatory policies governing workers and the issues the new infrastructural projects may have on related issues, like local environmental and cultural considerations. For example, a current BRI railroad project in Finland is being delayed due to issues whether it will unduly interfere with herding reindeer, a long tradition in Arctic countries. (10)

2. POLAR (ARCTIC) SILK ROAD

   1. Arctic Circle and "Arctic 8 " Countries

      Arctic States ("Arctic 8")

      The Arctic states, Canada, Denmark (Greenland), Finland, Iceland, Norway, Russia, Sweden, and the U.S., have territories within the Arctic and in addition to sovereign rights, carry the role as stewards of the region. The Arctic Council, composed of the eight Artie countries, (12) was established to foster exchange and shared interests. International law and their national jurisdictions govern the lands surrounding the Arctic Ocean and its waters. The Northern provinces of the Arctic States offer a home to more than four million people, whose health and well-being is foremost on the Arctic Council's agenda. (13)

      So, who owns the Arctic? No one owns the North Pole, but every country with a border on the Arctic Ocean claims some of its waters. Because the North Pole is covered by an ice shelf and isn't actually land, it is governed by the Law of the Sea, a 1982 U.N. treaty signed by more than 150 countries. (14)

      Russia is the largest Arctic country, with half of the Arctic's four million population, and its coastline accounting for about 53 percent of the Arctic Ocean coastline. (15) It is estimated that there may as much as S35 trillion of untapped gas and oil reserves, as well as mineral resources, that Russia and its Arctic neighbors are keen to tap. (16)

      One of the projects that combines economic and symbolic importance for Russia is the Northeast Passage or Northern Sea Route (NSR), a once inaccessible shipping route in the Russian Arctic that, as ice sheets melt, Russia sees as a future shipping super-highway to transport goods and resources between Asia and Europe. It hopes the route could rival the traditional Europe-Asia sea route, via the Suez Canal, as it shortens the shipping duration by around 15 days. (17)

      Russia had an "Arctic Program" of investment and development with planned "super-projects," but with the hostile environment, the slowly melting ice, and the need for maritime infrastructure along the navigation pathways, the Russian government reduced its investment in the Program. (18) In 2018, China announced its Arctic strategy, and its investments in Russia through its Silk Road Fund made it the largest foreign investor in the area. (19) Also, China was investing in research and scientific projects in Norway and Iceland. (20) In 2017, China sent an icebreaker ship through the Northwest passage. (21) China's increased activity in the region has raised security concerns in the U.S., and Secretary of State Pompeo has stated that China is entitled to "exactly nothing" in the region. (22)

      Arctic Council

      The Arctic Council is a forum and cannot implement or enforce its guidelines, assessments, or recommendations. (23)

      The Arctic Council is the leading intergovernmental forum promoting cooperation, coordination and interaction among the Arctic States, Arctic Indigenous peoples, and other Arctic inhabitants on common Arctic issues, in particular on issues of sustainable development and environmental protection in the Arctic. It was formally established in 1996. Permanent Participants (24) are organizations...