free and not the next. Canadian law is far more stringent than the Polar Code. A major challenge is the lack of people with cold climate experience, especially on cruise ships. As sea ice melts, the development potential accelerates. China is building ships that are ice capable, so we expect to see a large increase in Arctic traffic.”
A Chinese research icebreaker transited the Northwest Passage last September which could pave the way for Chinese cargo vessels to sail the route on a regular basis, said University of Calgary professor Rob Huebert. It’s the first time a Chinese vessel has gone trough the Northwest Passage, while China has gained observer status at the Arctic Council, he noted.
Canada is not interested in blocking ships in Arctic waters, it just wants it done properly, suggested Suzanne Lalonde, professor of International Law, Université de Montréal. “Unfortunately, the U.S. regards the Northwest Passage as international waters. I believe in Canada’s legal position that those waters are ours.”
Canada is trying to develop Low Impact Marine Shipping Corridors (formerly Northern Marine Transportation Corridors) to strengthen the safety of marine navigation in the Arctic and to offer an efficient planning guide for future Arctic investments. It will also provide Ottawa with the framework needed to prioritize and deliver its programs and services, including nautical charts and products, aids to navigation, icebreaking services and marine safety regulations.
“Primary corridors capture 77 per cent of marine traffic. Everybody is on board with the consultation process,” said Ms. Lalonde. “The corridors will be implemented when the funding is available. Maybe the OPP (Oceans Protection Plan) will be the impetus needed to get the primary corridors initiative launched.”
Canada is always good at making announcements, but bad at following through, added Peter Pamel, Partner, Borden Ladner Gervais. He’s happy that money ($1.5 billion over five years) is finally being invested through the OPP. “The corridors are based historically where major traffic is going. But you can’t make them mandatory, because some resupply is done in remote communities.”
Transport Canada has introduced new Arctic Shipping Safety and Pollution Prevention Regulations which incorporate the Polar Code into Canada’s domestic legislation. “Basically, we’ve kept some Canadian regulations to go along with the implementation of the Polar Code,” said Mr. Pamel who discussed the Polar Code as a component of risk assessment.
The two main types of marine insurance are hull and machinery insurance and P & I insurance. In terms of risk distribution for ice damage, it could be shared between the two groups. Risk assessment could include physical risks to ship and crew, infrastructure risks or human risks due to a lack of training and experience of officers and crew.
The Polar Code outlines a list of potential hazards like ice, cold weather and navigational challenges that vessels must be aware of when operating in Arctic regions. It doesn’t really apply to big vessels that operate regularly in the north such as Fednav, but more for cruise ships or one offs like a ship picking up cargo at a northern mining site for a customer in Europe, Mr. Pamel suggested. The code essentially establishes a framework of regulations and standards for the safe operation of ships and enhanced protection of the polar environment. For insurers, uniform international rules and regulations are essential.
“You can check all the boxes, but it doesn’t necessarily mean your ship is seaworthy. Under the Polar Code, a ship can no longer pick up spot cargo in the Arctic without being Polar Code compliant. The effect will be more barriers to entry and it focuses one’s mind on elements relevant in remote environments,” concluded Mr. Pamel.
The transportation sector contributes 6.3 per cent to Canada’s GDP and marine transportation accounts for two per cent of that sector, according to Julie Gascon, Assistant Commissioner Central and Arctic Region Canadian Coast Guard. Up to seven million vesse