Go USA…but go away China? Opposing reactions to two large-scale foreign investments in Svalbard

newdock

They’re both huge potential investments in Svalbard by foreign entities. One is being hailed as a key element of Longyearbyen’s post-mining future. The other is seen as undesirable and a possible threat.

There are enormous differences in the two situations, but the opposing reactions within a week by a top Norwegian official reveal the considerable economic, legal and political dilemmas Svalbard may face as it tries to expand and diversify its industries. Scenarios ranging from Longyearbyen losing up to half of its roughly 2,100 residents if mining suddenly ends to the creation of up to 700 full-time jobs in new industries have been floated recently by officials and analysts.

Among the promising developments was an announcement last week that U.S. investors may spent several hundred million kroner for a new floating dock in Longyearbyen that would open the city up to new shipping and research activities. Mayor Christin Kristoffersen told NRK she met with the investors in Oslo and the dock could be a prototype for other northern areas such as Alaska, Canada and Greenland.

“It is interesting that the plan is generating international interest,” she said.

The dock was among numerous potential future developments local political and business leaders discussed with Norwegian Minister of Trade, Industry and Fisheries Monica Mæland during a visit to Svalbard last week. She said Norway can’t ignore private, foreign investors in the archipelago, according to NRK.

“I am saying that private investment is interesting,” she said. “The Americans have  big plans, big ambitions with a big project. Now we need to take a closer look at that, and we are aware that will take a legal process involving the Norwegian Coast Guard, Ministry of Transport and Communications, and the National Transport Plan.”

The Ministry of Justice and Public Security would assess if such an investment would pose any problems relating to Norway’s sovereignty of Svalbard, but existing laws and regulations appear to ensure the government would retain firm control, Mæland said.

But she’s far less enthusiastic about a different type of foreign investment, stating this week that Norway has the right – and would likely exercise it – to block the sale of one of two private land tracts in Svalbard to a foreign entity.

Austre Adventfjord

The Austre Adventfjord estate, including Operafjellet, is one of two privately-owned land parcels in Svalbard, but Norway says it intends to intervene if an attempt is made to sell it to foreigners. Photo courtesy of Wikicommons.

The 217-square-kilometer Austre Adventfjord tract across the fjord from Longyearbyen, representing 0.35 percent of Svalbard’s total land area, was put up for sale early last year by a family in Bergen. Concerns were immediately voiced that a potentially hostile nation such as China or Russia could purchase it and expand its Arctic foothold, and news reports in subsequent months suggested a Chinese tycoon was close to a purchase agreement.

But Mæland, in an interview with Svalbardposten, said a clause attached to a mortgage agreement in the 1930s requires the Norwegian government’s approval if the property is sold to a foreign entity. She has stated repeatedly since last year the property should remain under Norwegian ownership and the government is attempting to purchase it.

“It’s naturally a little to be expected that when the government wants to purchase that we will not easily approve a sale to another,” she said.