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The missing local points

Mind the governance gap! Arctic municipalities and industrial megaprojects.

We need to address the scant attention given to local political institutions in Arctic policy arenas. Whether you read an official white paper from one of the Arctic states or attend an Arctic conference, the local perspective is almost surely lacking.

Instead, endless discussions of business initiatives propagate, conveying a message that business opportunities equal societal development. However, there is no invisible hand guaranteeing such a simultaneous progress.  Rather, societal development is dependent on wise decisions being made at the same political level that almost everybody seems to forget. 

A new industrial era?

In the last decade, politicians and business representatives have forecasted a new industrial era in the Arctic region. Encouraged by petroleum resource estimates and record-breaking mineral prices, the numerous Arctic conferences held around the globe have been optimistic events with peak representation from state leaders and corporate representatives. Together, they have celebrated the vast potential for economic development in the Arctic areas, often symbolized by industrial megaprojects.

Today, the rhetoric is somewhat different. Lower prices have moderated the most optimistic projections, and several of the megaprojects face an uncertain future, so too the local communities hosting these projects. The local dimension of industrial megaprojects was, in large part, absent from the public debate when commodity prices skyrocketed. Plummeting prices do not seem to make any difference: The local point of view is still missing.

Megaprojects and municipalities

As a part of my PhD-project, I have interviewed municipal leaders and business representatives in Arctic municipalities affected by industrial megaprojects. More precisely, I have studied three mining projects, one in Sweden and two in Norway and asked elected representatives and public servants about how the megaprojects affect different aspects of the municipality. My ambition has not been to assess the megaproject itself, but to explore how the municipality overcomes inevitable trials related to public services, democracy and societal development.

Almost everyone interviewed has been positive towards the respective mineral extraction projects. For interviewees, mining signifies employment, increased demand in the local market, tax revenue and, above all, the hope of population growth. However, mining also implies challenges, which they claim are currently not addressed adequately. Here I will limit myself to three issues that the interviewees frequently elaborated upon and that are generalizable to other sectors than mining:

Timespans

First, the feedback unanimous regarding the need to shorten the time-span from the first encounter between the municipality and the company through to the investment decision. The process of zoning plan proposals, consultations and objections, environmental impact assessments and discharge permits is too long and drawn-out. The interviewees strongly support the need to report on consequences and illuminate potential impacts, but there was consensus on the need to do it faster.  As several municipal leaders emphasize: It is better with a frank and prompt no, than to wait for years for something that might come.

Second, municipal leaders leave their positions. The turnover was striking when I tried to map what had happened in the different municipalities. One of the municipalities had witnessed three different chief administrative officers in four years. It goes without saying that it is difficult to sustain a long-term strategic focus if key persons are replaced too often. My interviewees addressed this problem and talked about the need for incentives for key personnel to stay in their jobs during the planning phase and early operation phase.

Benefits and burdens

Third, the changing role of the state leaves locally elected representatives in a vacuum – not knowing what to expect from the companies. Several Arctic communities have substantial industrial experience. However, the new industrial era in the Arctic region is markedly different from previous periods of industrialization, defined by the changing role of the state and the introduction of new global corporate actors.

Instead of being a subsidized state-owned company with a vast number of initiatives and sponsorships in the local community, the cornerstone company now has responsibilities toward its foreign shareholders. My interviewees do not oppose this altered division of labour. However, they fear that the corporate sector’s commitment to and sense of place today is less deep-rooted; transnational firms are more detached from the local community than what was the case 30 years ago. This development impinges on the municipalities’ strategic decisions. For instance, balancing between the company´s need for economies of scale and the host community´s interest in a longer and steady operation period is often difficult, and can lead to tensions.

This also relates to a concern expressed by several interviewees, that the burden of

industrial activity remains, while the benefits end up elsewhere.

Lessons to be learned

So, what lessons can be learned by analysing three municipalities hosting megaprojects?

  • First of all, the lack of attention to local political institutions is rather paradoxical because local authorities are critical for the establishment of business initiative.
  • Second, exposure to a global market has redefined the preconditions for local governance, making the future less predictable and more dependent on a volatile global market.
  • Third, there is a need for new policy initiatives that address the challenges that the host municipalities face. Almost all my interviewees welcome the megaprojects, but a project’s broader legitimacy can be reduced if the local community are left alone with problems not adequately responded to by national government.
  • Fourth, my findings also highlight the need for arenas where key actors can discuss the municipal role in Arctic industrial megaprojects. The next opportunity will come at the Arctic Circle conference in Reykjavik at the break-out session Arctic booms and busts (October 17).  Be there.

Frode Bjørgo works at University of Nordland and is currently completing his doctoral dissertation about the municipal role in the establishment of big industry in the High North. His project is the basis for a seminar during the Arctic Circle Conference in Reykjavik on Saturday the 17th of October.