This 1920 treaty allows China to buy land in Arctic. Here's why Norway has blocked the sale

Tensions are rising in the Arctic.

Norway has blocked the sale of the last privately owned property in the archipelago of Svalbard.

The remote Søre Fagerfjord property in southwestern Svalbard, 60 square kilometres of mountains, plains and a glacier, was on sale for $326 million.

China was looking to buy it under the terms of the 1920 Svalbard Treaty.

But what do we know about the treaty? And why has Norway blocked the sale?

Let’s take a closer look:

Svalbard

First, let’s take a brief look at Svalbard.

The strategic archipelago comprises a group of islands north of continental Norway.

Twice the size of Belgium, it is located halfway between mainland Norway and the North Pole.

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It is around 700 kilometres north of the European mainland.

It is located in the Arctic – a region that has become a geopolitical and economic hotspot as the ice melts and relations grow ever frostier between Russia and the West.

According to the Svalbard Museum website, people from all around the world have been coming to the archipelago since the 17th Century.

Prior to the treaty being signed, the area was open to anyone and everyone who wanted to exploit its natural resources.

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According to non-profit JSTOR, Norway, Sweden, and Russia were the earliest states looking to take advantage.

Svalbard witnessed activities such as hunting and coal extraction.  Polar explorers also used it as a base to the Arctic.

In 1905, Norway achieved its independence from Sweden. It then sought to include Svalbard in the Kingdom of Norway and also to establish rules regarding its use.

Many scenarios were looked at including Norway, Sweden, and Russia sharing Svalbard. However, Norway pushed for itself to run the territory.

Unfortunately, negotiations were halted by the outbreak of World War I.

The treaty

The Svalbard treaty was eventually signed on 9 February, 1920 in Paris.

It established Norway’s full and undivided sovereignty over Svalbard.

Norway, The United States of America, Denmark, France, Italy, Japan, the Netherlands, Great Britain and Ireland and the British overseas Dominions and Sweden were the original signatories.

According to JSTOR, the countries acceded to this party because of the losses Norway’s commercial fleet suffered during World War I.

Norway’s newly-independent status also was a factor.

Russia, which had gone through the 1917 Russian Revolution, did not participate in the negotiations.

Afghanistan, Albania, Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Chile, Czech Republic, Denmark, Dominican Republic, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Italy, Japan, Latvia, Lithuania, Monaco, New Zealand, North Korea, Norway, People’s Republic of China, Poland, Portugal, Romania, Russia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Switzerland, The Netherlands, United Kingdom, United States, and Venezuela have all signed on as of 1 January, 2021.

One important point the treaty established is that the signatories and their citizens have the same rights to exploit its resources as Norway does.

Citizens and commercial groups from the signatory nations have

• Access to and presence in Svalbard

• Fishing and hunting

• All types of maritime, industrial, mining, and commercial operations

• Acquisition, exercise, and enjoyment of the right to ownership of property, including mineral rights

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

The treaty also states that Norwegian authorities can control activities.

The treaty states that authorities may ban a particular activity or regulate it, but no one can be treated differently simply because of their nationality.

The treaty also demilitarised the region.

No country, including Norway, is allowed to permanently station troops on Svalbard.

Article 9 of the treaty states, “… Norway undertakes not to create nor to allow the establishment of any naval base in the territories specified in Article 1 and not to construct any fortification in the said territories, which may never be used for warlike purposes.”

According to the Svalbard Museum, the archipelago must “never be used for warlike purposes.”

Norway’s military presence in Svalbard, which comprises mainly coast guard, also remains at minimum levels.

So why has Norway blocked sale?

Norway has cited national security as the reason for blocking the sale after its intelligence agencies warned of a risk.

The government said on Monday a potential sale will require state approval under national security law.

“The current owners of Søre Fagerfjord are open to selling to actors that could challenge Norwegian legislation in Svalbard,” Trade and Industry Minister Cecilie Myrseth said.

“It could disturb stability in the region and potentially threaten Norwegian interests,” she added.

Myrseth said anyone ready to fork out a “disproportionately high price” for Søre Fagerfjord could be intending to challenge Norwegian law and national security.

Norway owns 99.5 per cent of Svalbard.

It has declared most of the land, including the Søre Fagerfjord property, protected areas.

Søre Fagerfjord is located in a national park that was protected in 1973, and which is subject to strict restrictions, according to the Norwegian government.

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.

“China is a possible buyer. China has shown great interest in the Arctic for a long time. If they can get a foothold up there, it would have great strategic significance for China,” Per Kyllingstad, a lawyer for the owners of the property, was quoted as saying by the Financial Times.

China isn’t the only one interested in the region.

According to the newspaper, Russian media singled out Svalbard after the 2014 annexation of Crimea as a possible flashpoint for World War III.

Moscow has also repeatedly provoked Norway by flying flags and holding a pseudo-military parade on the archipelago recently.

The Nordic country in late May said it planned to increase its control of Svalbard, as security concerns and climate change impact the Arctic archipelago.

The Nordic nation has long been concerned that tensions between western countries on the one hand, and with Russia or China on the other, could spill over to the vast outpost because of the archipelago’s strategic position and of growing interest in the Arctic’s valuable oil, gas and shipping routes.

Norway’s ministry again made an offer of $1.9 million for the property last week, Fredrik Sejersted, the attorney general acting on the government’s behalf, told Agence France-Presse on Monday.

That offer, a tiny fraction of the owners’ asking price, was refused.

Kyllingstad, who represents the sellers, has previously told Agence France-Presse that he had received “concrete signs of interest” from potential Chinese buyers who have “been showing a real interest in the Arctic and Svalbard for a long time”.

The piece of land is a unique occasion to grab the “last private land in Svalbard and, to our knowledge, the last private land in the world’s High Arctic”, he said.

Kyllingstad did not immediately respond to the government announcement.

The property’s seller is a company controlled by a Russian-born Norwegian, according to local media.

Critics remain sceptical about the price and feasibility of the sale.

The property, in the southwest of the archipelago, a region without roads or infrastructure, covers protected areas where construction and motorised transport are prohibited, stripping it of commercial value.

The Norwegian state owns 99.5 per cent of Svalbard and has declared most of the land, including the Søre Fagerfjord property, protected areas where construction and motorised transport, among other things, are prohibited.

But the sellers cite the 1920 treaty to argue that owners can exploit and develop their properties.

In 2016, the government paid €33.5 million to acquire the second-last piece of private land on Svalbard, near Longyearbyen, the archipelago’s main town, which was also reportedly being eyed by Chinese investors.

With inputs from agencies