Full transcript of a public address and conversation with Grete Faremo, Minister of Defense of Norway.





10:30 A.M.

Transcript by
Federal News Service
Washington, D.C.

DAMON WILSON:  Good morning, everyone, and welcome to the Atlantic Council.  My name is Damon Wilson.  I’m vice president and director of the international security program here at the council. 

I’m so pleased to welcome Norway’s minister of defense, Grete Faremo, to the council today for a conversation on the challenges and opportunities in the Arctic.  We’re so pleased to host you not only because of the growing interest in Washington regarding the Arctic but also because of Norway’s strong record within the alliance as a NATO ally. 

We’re particularly grateful for the over-500 Norwegian soldiers serving in Afghanistan today.  Today’s event is part of our new programming on the Transatlantic Initiative on Nordic-Baltic Security.  This is an effort to take a look at the future of security in the Nordic-Baltic region, as well as the region’s larger role in trans-Atlantic and global security.

Part of the idea behind the initiative is for the Atlantic Council to be a platform for public and private discussion with senior leaders from the region.  And we’re so pleased to be able to host the minister this morning.  The Transatlantic Initiative on Nordic-Baltic Security grew out of a series of meetings over the past year here at the council with foreign and defense ministers and chiefs of defense from Sweden, Denmark, Lithuania, Estonia and Latvia, so it’s fitting that we’re now able to host Norway’s minister of defense as well.

The Arctic has quickly emerged as a key field for foreign and defense-policy practitioners.  It’s important not only to Canada, Russia and the United States, but also to the countries of the Nordic-Baltic region.  And in this respect, I would say that Norway plays a special role.  And we very much look forward to the minister’s remarks on these issues.

This event today is especially timely, following the signing of a landmark treaty after 40 years of negotiations between Russia and Norway, on maritime delineation affecting the cooperation in the Barents Sea and the Arctic Ocean. 

Ms. Faremo comes here today with a very impressive background and résumé.  She became minister of defense in 2009 after a long career of government service, including time as minister of justice, minister of energy and oil and minister of development cooperation, a remarkable – four cabinet portfolios in her career.

In addition to her government service, she has also served on several corporate boards and in the leadership capacity for globally known companies, including Microsoft.  In addition, she’s been very active in the nonprofit world, and among other things, has been a board member of the Afghanistan Committee and the Norwegian People’s Aid.

Minister Faremo, welcome to the Atlantic Council.  Thank you for being with us today.  Let me turn the podium over to you.  (Applause.)

GRETE FAREMO:  Thank you very much.  Ladies and gentlemen, I’m really proud to be here.  It’s an honor for me to be here with you today.  And thank you all for leaving me with this opportunity to address the important issue of the strategic challenges in the Arctic and the High North.

Norway is a trans-Atlantic maritime nation.  We are the nation’s second-largest fish exporter, third-largest energy exporter, and we have one of the world’s largest merchant navies.  And the development in the High North is, of course, sort of obvious.  It’s of key importance for the Norwegian government.

Let me draw your attention to the slide, also, here to my right.  Obviously, our focus on the north has to do with our geographical location and our strategic interests.  And as you can see on the map, Norway, including Spitsbergen, is bordering not only the North Atlantic and the Barents Sea, but also the Arctic Ocean.

As the polar icecap is withdrawing, we are facing both new challenges as well as new opportunities.  And we now need to prepare to handle these challenges in a good way.  At the same time, we must seek to use the new opportunities responsibly.  Six countries are bordering the Arctic area.  Five are NATO allies – the United States, Canada, Denmark, Iceland and Norway – and Russia is a NATO partner.

Climate change will have a geostrategic impact in the High North.  It is our view that the ongoing climate change in the Arctic is irreversible.  This assessment was also supported by your National Oceanic and Atmospheric Administration, the NOAA, last week.  Manmade climate changes are a great cause of concern to us, and in my talk today I will primarily focus on the security-policy aspects of climate change in the High North.

The Arctic is one of the iciest, coldest, most vulnerable and untouched places on earth.  It is also an area where we have limited expertise.  Until recently, the level of attention has not reflected the growing strategic importance of the region.  The Arctic climate is warming rapidly.  The Arctic icecap is melting faster than expected.
This slide – (audio break) – minimum ice coverage, and forecasts have been revised numerous times.  And the Arctic Ocean, this summer, be free of ice – (audio break) – soon.  (Audio break) – indicate ice-free summers in the 30s.  Based on – (audio break) – we should not rule out the possibility of an earlier date.

The climate change will have serious impact on the permafrost, which will decrease significantly.  Huge quantities of carbon are stored in permafrost on land and below the shallow seabed, especially along the Russian shoreline.  And many studies conclude rising temperatures are already releasing carbon in the form of methane.  Experts say methane emissions from the Arctic have risen by almost one third in just five years, and that rapidly rising temperatures are to blame.

The slide indicates consequences of melting permafrost.  This discovery follows a string of reports that previously frozen boggy soils are melting and releasing methane in greater quantities.  Such Arctic soils currently lock away great quantities of methane, a far more potent greenhouse gas than carbon dioxide.

Some scientists describe melting permafrost as a ticking time bomb that could overwhelm efforts to tackle climate change.  They fear that the warming caused by increased methane emissions will itself release yet more methane, and lock the region into a destructive cycle that forces temperatures to rise faster than predicted.

Today, we don’t know, in detail, the impact of the climate change.  Many international studies conclude that the consequences on the environment will be severe on a global basis.  Therefore, it is indeed a paradox that exactly this development also presents new opportunities.  The ice melting is paving the way for commercial activity and cooperation.

First, new possibilities are emerging for exploiting the rich energy reserves hidden under the Arctic Sea.  According to a study published by the U.S. Geological Survey in July 2008, the Arctic is the largest unexplored prospective area for petroleum remaining on earth, illustrated here.  The area accounts for about 22 percent of the undiscovered oil and gas resources in the world.  This is an estimate.  The figure may be too optimistic, and in any case, the Arctic cannot, by any means, replace the Middle East as the principal global source of oil and gas. 

That being said, the relative importance of the High North as an energy supplier is growing.  Some of the resources are in the Norwegian sector, and the first Norwegian deliveries of liquid natural gas have already been transported by ship to markets in Western Europe and in the United States.  However, most of the petroleum resources in the European High North are located in the Russian sector.

Secondly, the area contains one of the largest remaining fish stocks in the world.  Norway has established a very effective and control in the – (audio break).  With climate change, there are many unanswered questions.  Perhaps large fish stocks might migrate because of changing sea temperature.  Perhaps important fish resources will disappear.

We must monitor these developments.  And conflicts of interest in fishery rights could emerge, or we could see new opportunities for cooperative regimes being established.

And last, but not least, the ice melting opens up alternative routes for transportation between the United States, Europe and Asia, illustrated here.  New sea lines have already opened through the Northeast Passage, and will also be opened straight across the North Pole.  In a few years, the shortest route for sea transportation from Asia to Europe goes via the Barents Sea, and the difference between East Asia and Western Europe will be reduced by more than 7,400 kilometers. 

Accordingly, the sailing time will be significantly reduced.  And the summer sailing season is currently assessed to two, two-and-a-half months a year.  Hence a nation like China might became an important shipping nation in the High North in the near future.

The Norwegian vessel Nordic Barents just sailed through the Northeast Passage from Kirkenes to China.  This was the first non-Russian ship ever to sail this route on a commercial basis.  And Russia plans to increase their sailing frequency in this area and they’re building new vessels for this purpose.

There are substantial mineral resources onshore in the Arctic region, and we will probably see a considerable increase in transportation into and out of the Arctic.  The climate change could generate more economic activity in the whole region.

Norway welcomes the commercial opportunities welcomed by the new sailing routes.  At the same time, we must keep in mind the potential for shipping accidents in a very vulnerable area.  Fisheries and the overall environment could be strongly and negatively affected by such incidents, and the changes that I just described – the ice melting, the huge reserves of natural resources and the opening of new transport lines – have, also, strategic consequences.

This is the reason why the region is gaining importance.  This is recognized not only by Russia, but by EU, Asia and the United States as well.  Most of the identified challenges in the Arctic and the High North can be described as soft security challenges.  These are related to climate change, management of resources, migration of fish stocks, pollution, search and rescue, et cetera.

However, the discussions in media about the High North are often focusing on competing interests and the potential for conflict.  We see titles like “the return to the Cold War” and “the race for the High North” and speculations concerning competition for oil and other natural resources.  From a Norwegian perspective, we don’t agree with these more alarmist views.  On the contrary, the region is currently stable and calm, and tension is low. 

And we will do all we can to preserve that situation.  First, we have a solid international legal framework in place, where the states bordering the Arctic have agreed that the Arctic Ocean is governed by the United Nations Convention on the Law of the Sea, the Ilulissat Declaration from 2008.  Nevertheless, we need to maintain a continued focus on strengthening legal regulations in areas where existing regulations may not be sufficient.

Second, many of the boundary issues in the region have been resolved.  Norway has resolved all the outstanding delimitation issues with Denmark, with regard to the Faroe Islands and Greenland, and also with Iceland.  And more importantly, in September this year, Norway signed an agreement with Russia, ending more than 40 years of negotiations over the delimitation line between our two countries in the Barents Sea.  Only ratification remains.

Third, we have fishery agreements that provide a solid foundation for responsible management with our closest neighbors.  Furthermore, most of the potential oil and gas resources in the High North are situated in undisputed areas.

Finally, all the countries in the region currently have a mutual interest in keeping confidence, dialogue and cooperation on a high level.  And this is, in many ways, a precondition for solid economic development.  However, there are no guarantees for a positive development, and we need to safeguard against negative developments with a potential for crisis and conflict.  So I hope you see that this actually indicates NATO territories and how they stretch towards the North Pole. 

Cooperative arrangements for fishery, transportation, oil and gas, search and rescue and environmental issues need to be further developed.  We must avoid that conflicts of interest dominate the international discussion on the High North.  The High North continues to be of great relevance for Russia’s military.  A large share of its nuclear arsenal is located in the area, and much testing of new weapons systems takes place here.

In addition, the area is important for training and exercises, particularly for the navy and the air force.  A main task for Russian conventional forces in the north is defending the nuclear assets in the High North.  As Russia has gradually recovered economically, we have seen a more self-confident Russia and increased military activities in the area.

Patrols of strategic aircraft into the Atlantic have – (audio break) – again, but at a lower – (audio break) – than during the Cold War.  Similarly, submarines are again patrolling Arctic waters.  And recently, we have seen a successful test of the Bulava strategic – (audio break) – based missile, and Russia is building new and capable submarines.

We do not interpret these Russian activities – (audio break) – or specifically directed – (audio break).  We want to expand our cooperation with Russia, also – (audio break) – and we want NATO to engage in cooperation with Russia, both in the High North and elsewhere.  NATO has for some time single-mindedly focused on operations out of area. 

We need to continue our efforts in deployed operations, but we also need a reformed alliance that, in the future, can keep an eye on more than one security challenge at the same time.  NATO must be able to address emerging security challenges, as well as existing challenges, closer to home.

Norway has been pushing this issue for some years, and we are pleased to note that our views are well-reflected both in the Albright Report and in the draft Strategic Concept of NATO.  (Audio break) – imply that NATO cannot engage out of area.  Such operations may be crucial also in the future. 

However, it is important that we ensure NATO’s role as the most relevant supplier of security in the public opinion of all the member states, and NATO must be present and visible in every region, dealing with the full range of issues of all its members, and hereby reinforcing cohesion and solidarity amongst its members.

Two decades ago, NATO’s legitimacy was obvious and taken for granted by the general public in the founding member states.  Today, we have to tell our children about the role and the importance of NATO, and people must be convinced of the need for and the relevance of NATO.  And this has become even more prevalent with the inclusion of new member states.

NATO must be a partner for all its members in addressing the security concerns close to their borders.  The challenges vary among members.  The Black Sea, Northern Africa, the Baltic Sea area and the High North all present different challenges, and NATO has an important role to play in all these areas.

In the High North, we want a multinational presence in training and exercises.  NATO must have a situational awareness and – (audio break) – forces and activities in the area.  NATO must also know the political-military issues of relevance, and NATO must conduct training and exercises in the area, and be able to do the necessary analysis and lessons learned in order to increase its ability to carry out operations if and when a need arises.  NATO should also have a generic operations plan for all relevant areas, to be prepared to act in crisis.

In Norway, we have moved our national joint operational headquarters to Bodo in the north of Norway.  We have also strengthened our military presence in the north and intensified maritime surveillance in the High North.  This is important for solving national tasks as well as providing collective security.

NATO is the cornerstone of our security.  NATO needs to develop its cooperation with Russia and vice versa, and this is essential for security in the High North.  Multinational presence in the High North is considered very important, and we highly appreciate the participation of allied and partner forces in exercises and training in Norway.

We strongly support the work of the Arctic Council and Barents Euro-Arctic Council on a range of issues related to the High North.  We especially value the search-and-rescue initiative within the framework of the Arctic Council.  In my view, the IMO – the International Maritime Organization – also plays an important role in developing guidelines concerning safety at sea in this region.  We also need to exploit the potential for close cooperation that can be developed through the North Atlantic Coast Guard Forum.

I have, in my presentation, focused on the current and emerging challenges and opportunities in the High North.  They are important to my country and my government.  We need to cooperate closely with all parties in the High North.  This includes enhancing NATO’s relevance in areas where the alliance should have a role. 

We also need to make every possible effort to get Russia to be a real stakeholder in a future stable and predictable region.  Without serious and constructive Russian involvement, we will all be faced with unwanted challenges in the region.  In this area, NATO, through the NATO-Russia Council, should have an important role. 

The High North is only one of many areas where the alliance needs to have expertise and capabilities that can be used, if needed, for crisis management and conflict prevention.  My government is pleased with the general direction of NATO’s new draft Strategic Concept and the work that is being done to reform NATO’s military command structure.  And we would like to see NATO in the High North.

As a nation with less than 5 million people and located close to an area of great geostrategic importance, it is essential that security and defense can be achieved and ensured collectively.  The opposite would be a negative trend towards renationalization of defense and security, and this would, in our view, contribute to increased risks – not only for Norway, but also for our friends and allies.

Norway is modernizing its armed forces and we are increasing our defense budget.  And we view it as very important to handle our national responsibilities in the High North in a robust and credible manner.  We believe that we are succeeding and that we, through our national efforts, also can provide a significant contribution to collective security in the region.

On a 24/7 basis, Norway conducts an ongoing national military operation in the High North, “Operation North”, which covers military tasks and support to the civil society.  For us, it is a large-scale operation, often under challenging climate conditions.  In comparison, the level of our commitment would equal the U.S. armed forces committing about – and I don’t know if you’ve ever thought about this – but committing about 200,000 soldiers, sailors and airmen to a similar operation.

NATO is the cornerstone of Norwegian security.  We need an alliance that is relevant for future challenges.  The changes in NATO and the changes in the High North offer new opportunities for cooperation with the U.S.  The United States is our most important ally, and I want to underline the importance and emphasis we put on our close cooperation. 

Your support is greatly valued.  And to stay relevant, we need to adopt to a changing security environment.  Thank you very much for your attention.  (Applause.)


MS. FAREMO:  I’ll leave it there, just for you to –

MR. WILSON:  (Chuckles.)  Terrific photograph, there.  Madam Minister, thank you very much for you remarks.  I think that was terrific.  You’ve put a lot of issues on the table that I hope we can get into in this conversation.  We’ve got a little over 30 minutes.  I’ve got a few questions myself, though I want to be able to turn to the audience and bring you into this conversation.

I’m particularly grateful to have a NATO minister of defense here at the Atlantic Council offering a defense and advocacy of the alliance, I think, in advance of the Lisbon summit.  We’ll come back to the issue of public opinion because I think you’ve hit on something quite important. 

But let me start, first, with the news issue of the reality of this agreement with Russia.  After 40 years of negotiations – on-and-off negotiations, albeit – but after 40 years, you finally have been able to agree to a delimitation agreement in the Barents Sea.  Why now?  Why did Russia agree to do this now?

MS. FAREMO:  It’s a good question, and it was not obvious.  And when President Medvedev visited Oslo, even the press didn’t have a clue.

MR. WILSON:  Interesting.

MS. FAREMO:  But the negotiations had been going on for 40 years.  And I think parties on both sides realized the huge challenges and opportunities this area offers, and that it actually was in both countries’ interest to find a solution to the delimitation line, actually providing more a predictable and secure framework for going forward – both in how to deal with the challenges and the opportunities.

And over the years – I don’t know if you realize this – Norway has always had a border with Russia, and when you look at peace and conflict, we have been at peace with Russia for 1000 years.  That has not been the case with Sweden.  That has not been the case with Denmark.  And we have moved gradually forward in, I think, a predictable manner – and to Norway, also important to say, in a multilateral framework. 

So I think it has been, over the years, a process where the parties actually now found out and decided that it was the right time.  I would also not underestimate the role of Medvedev in solving the issue.

MR. WILSON:  If I could parse that just a little bit – I mean, how much of this do you think is because of the bilateral dynamic that you referred to between Russia and Norway, the substance of the issue, in terms of predictability of the framework as the Arctic becomes more important, and how much do you step back and think this is part of a broader Russian effort – if you look at Russian-Polish relations, for example. 

Do you think this is part of a broader strategic move on Moscow’s part, or was it driven by the specifics related to the bilateral issues here?

MS. FAREMO:  It would be very tempting for me to say both.

MR. WILSON:  Got it.  (Laughter.)  I’m not quite going to let go of the Medvedev point yet.  But in the wake of the agreement, there are some Norwegian officials who have talked about the potential for NATO’s role, obviously, in the Arctic, and potentially even NATO-Russia cooperation.

Yet after the signing of the agreement, President Medvedev himself sounded a bit dismissive about the idea of the alliance, or, of NATO having a role to play in the Arctic.  So I just wanted you to play that out.  You drove home that message in your remarks but could you develop a little bit more what, concretely, you see as NATO’s role?  And particularly, do you see the potential for NATO-Russia cooperation in the Arctic? 

There’s a lot on the table as we head to a NATO-Russia Council meeting at the Lisbon summit – a lot of discussion about missile defense cooperation, about Russian support for the operations in Afghanistan.  Is the Arctic a potential issue to add to that agenda?

MS. FAREMO:  I hope that my remarks and also the picture, actually, give you a picture of both the huge area, geographically, and also the huge opportunities and challenges.  So I think, actually, to Russia, there is a good portion, of course, of self-interest – as well as there is an interest of them to develop further, also, opportunities together with organizations like NATO and EU.  So they are a player actually developing – exploring opportunities at different platforms. 

So you added many reflections in your remarks, so if you would like me to explore or to – well, perhaps I can use the word explore – the opportunities they see with NATO.  Of course, we can take missile defense.  Medvedev has announced that he will go to Lisbon, and that offers an opportunity for NATO to explore a solution for the missile defense involving Russia.  We see that as very important from the Norwegian side.  I think many of our allies and partners do the same. 

And why should Russia do this?  I think they realize that challenges and dangers and security issues are not only going between NATO and Russia, but it’s also a bigger world and that it leaves, actually, NATO and Russia with some common ground of interest that also offers the opportunity to find a solution for missile defense in that regard.  And I think NATO is becoming a more mature player, also, on a global basis in this.

MR. WILSON:  Terrific.  I wanted to ask a follow-up question related more towards your immediate region, Nordic-Baltic region.  Over the past couple of years, we’ve had the former Norwegian leaders – the Stoltenberg report, laying out some ideas of Nordic-Baltic cooperation; a follow-up report from – (inaudible) – Sören Gade report on Nordic-Baltic multinational defense cooperation.

And I wondered from your perspective as the minister of defense of Norway – you had in your remarks a strong line:  “The United States is Norway’s most important ally”.  As you look at your neighbors where you have a cross section of NATO members, non-NATO members, EU members – Iceland’s becoming an EU member – but you have a mixture of institutional frameworks, how do you see the dynamic developing among – within the region – on the issue of Nordic-Baltic cooperation, particularly multinational defense cooperation? 

Where do you see the potential for this in terms of the political support for – but also the imperative in an era of tighter defense budgets?  It’s actually a little bit different in Norway.  We’ve heard a lot about this from Sweden and Finland to non-NATO allies, so how do you see Nordic-Baltic defense cooperation evolving, the implications of this for your neighbors, what it may mean for NATO or the EU and any potential role for Nordic-Baltic role within – on the Arctic, in particular? 

MS. FAREMO:  Actually, next week or 10 days, I will be hosting the Nordic-Baltic defense ministers’ meeting.  We have developed actually quite a good cooperation among the Nordics as well as the Baltic countries.  It’s interesting to look at this in a 20-years perspective. 

If you look back and what people said about NATO when the Iron Curtain fell, many stated that NATO would lose its relevance.  Looking back, you see a NATO that over the last 20 years have played a key role in keeping Europe peaceful and stable.  And including now, new members – also from former Soviet Union – the EU and NATO have together, I think, played a key role in this work. 

If you look at NATO and the work on the new Strategic Concept, the role of partnerships have been focused and rightly so.  I think it’s very important that NATO remains its ability and flexibility in opening up and building solid partnerships.  So that is why we have focused both on a partnership with Russia as key but also a partnership with countries like the Nordics. 

We like to joke about this in the Nordics, that we are five countries of which three are NATO members and three are EU members, so overall we are quite good friends with both EU and NATO.  And it offers us an opportunity to build something of value for not only us in the Nordics but to EU. 

And by involving the Baltics, we also are actually able to transfer knowledge and exchange experience both ways in how to deal with the present security challenges.  As I said, we have lived at peace with Russia for thousand years.  To Baltics, that may not seem as easy to state and be confident about it.  So actually working together and develop both the partnerships with countries outside and also, as I’ve said, at all times point to the need for NATO to stay relevant, to focus has been important. 

And I think we have come a long way ahead, as I mentioned, through the initiative Norway took some years ago and that now has led to, in many ways, a new draft Strategic Concept and a NATO reform that I think focus in a very good manner both in the challenges in our core area, the High North, as well as core areas for other NATO members.

MR. WILSON:  Terrific.  I’ve got more questions, but I want to take a moment to bring in questions from the audience.  So if I call on you, if you could please introduce yourself with the mike?  Let me start with Harlan here, and then we’ll come to these two questions.

Q:  I’m Harlan Ullman at the Atlantic Council.  Madame Minister, thank you very much for coming and thank you very much for your comments.  Let me be a little bit more provocative and belligerent if I can.  NATO could be seen as living in a state of suspended animation.  There are a lot of people in the United States and obviously in Europe who really question the future of NATO.  They’re not opposed to it, but they haven’t heard any compelling rhetoric. 

The notion that NATO needs to be made relevant – that’s terrific.  If you ask the council, the group of experts and Madeleine Albright, as some of us did, please argue, tell us why NATO is relevant and not a relic of the past.  When you read the report, it really doesn’t answer that question to the degree that I think is necessary if the public becomes very questioning. 

You see the way that most defense budgets are going in Europe.  Norway is the exception of course.  But here in the United States, Great Britain and Germany, there has been certainly a lack of endurance over Afghanistan.  You can argue whether it’s going well or getting better, but that’s going to come to a head.  And it seems to me that the fundamental contradiction of NATO – that is, maintaining a military alliance when there’s no military threat – has not been properly closed or at least argued. 

First, do you think there’s a compelling series of arguments that can be made, besides the implicit ones, that would generate enough public support, or do we go back to Ismay’s equivalent of, the importance of NATO is to keep Germany down and Russia out – or some modern equivalent slogan?  Because we may not be able to find the real arguments necessary that will justify the future of NATO even though intuitively all of us believe that there is an argument to made in that regard.

MS. FAREMO:  To me, it has been very interesting to see that the support of NATO has never been higher in Norway, I think, since NATO was established.  We have a support that goes well beyond 80 percent, perhaps touching on 85 percent.  It has actually increased during the Afghanistan operation.  And even a support among the majority of the population to the Afghan operation itself. 

I think the relevance of NATO, the importance of NATO, may look different from what perspective you want to take, what nation you live in.  But I think to many Europeans and, as you understand, including Norwegians, NATO has proved itself more relevant than we, perhaps, thought throughout the ’70s and ’80s where, actually, NATO was working much more as an organization set up for the Cold War.  That started in the early ’50s/late ’40s. 

So I would not support any statement that NATO has, sort of, over-lived itself.  And I think many Europeans would support me in that.  But I share your concern regarding how we need to work to maintain NATO’s relevance – with cutting the budgets, with the economies dropping.

And that is why, also, Norway has supported so strongly the reform of the command structure.  It wouldn’t simply not be possible for NATO to survive with an argument that, you may be saving in your country and you may be cutting back this and that of social security and whatever. 

But we need to put all the money NATO needs into its old structure.  So I think one of the major challenges that we are working on now is to restructure its command – simplifying.  And as I said, redoing the priorities and focusing on its core tasks. 

U.S. has always been very important ally to Norway and has become even more important over the years.  And I think to the U.S., as well, a stable, cooperative, peaceful Europe has been and will be of importance, so it is how we work together in developing NATO as strong, effective tool going forward.  I think the solution is to be found in whether NATO will strengthen and develop its role. 

MR. WILSON:  I might just add, Madame Minister, one of the things we’ve noticed as we’ve met with various leaders from the alliance coming through Washington, that the level of public support within NATO allies for the alliance – there’s often a direct correlation between political leadership on these issues within their publics and the willingness to speak out and defend the alliance, defend the role that the countries are playing in Afghanistan.  We’ve seen that in Denmark.  I think we’ve seen that in Norway.  And that helps to speak why, frankly, your numbers in support of the alliance are much higher than in other places. 

But let me take two questions on this side.  If I can, this gentleman here and then Sherri Goodman and then I’ll come to the two questions over here.  Why don’t we take both of these questions together in a group? 

Q:  Madame Minister, I’m Walter Stadtler.  My background is the United States Foreign Service and I’ve been deeply involved in the past in the Nordic area – stationed in Stockholm and also in NATO.  And I’d like to come back to the question of resource – particularly strategic resources in the High North. 

Those of us who happen to be literal – those countries that happen to be literal to that area, of course, are very much looking forward and have this tremendous advantage of actually being there where these resources might be located.  But there are other countries in the world, including some of our allies and those with increasing needs, for example, for some of the strategic resources.  Particularly oil, natural gas and possibly exotic materials of various kinds that could be there who I’m sure are somewhat looking anxiously at their access to this. 

What do we say to those countries?  Take a few examples – the U.K., France, China, for example – about access to those strategic materials in the north? 

MR. WILSON:  Let me go ahead and pick up the question from Sherri Goodman as well.

Q:  Thank you, Madame Minister.  Sherri Goodman, CNA.  And building on the last question and the importance you attached to working to adapt to the changing Arctic and the stability you’ve observed in the current situation and the support of the current institutional structures, but looking ahead another decade or so when our children, perhaps, are sitting in our seats:  Do you see that the current structures of NATO, the Arctic Council, the IMO and others plus the fabric of bilateral agreements will be sufficient?  Or do you envision that in the future to maintain stability in the Arctic we will have to think about additional governance structures? 

MR. WILSON:  Those are good questions.  Thank you.

MS. FAREMO:  Yeah, both the legal framework and solid institutions are of vital importance, of course, to this area as well as it is to other areas.  And in my view, that has been the basis for the approach that Norway took in these issues.  We need to explore common – we need to define what are the challenges and opportunities and then, of course, address the key issues.  Do we have a legal framework and institutions that are strong enough?

And my question is – my answer to that is that they are.  Of course, not at this point; not good enough solutions to all of these challenges.  That is why it has been so important to address them.  But seeing how, for instance, NATO has developed its thinking around this and how these thoughts have been reflected in the draft strategic concept I think we have moved ahead. 

And also, looking at how we have, going back, dealt with these issues together with our partners and setting up coast guard, rescue, resource management – also exploitation of oil and gas.  This is actually something that you need to face and address and find solutions to.  And of course, there are nations that are now looking at what are our opportunities and who can eventually claim that this is not an opportunity for you to explore or the opposite. 

And I don’t think we have a strong enough international regime.  But we have at this point, as I said, countries now recognizing the international law of the seas.  We have a multilateral approach to this and I – (audio break) – that Norway will also take a strong role in further developing a good framework for operating in this area as we will need our partners to do. 

MR. WILSON:  This side – I want to take the question in the second row and then Sun-jin (ph) and these two questions here together. 

Q:  Good morning, Madame Minister.  I’m Terry Murphy.  I’m with CSIS but I’m a once-upon-a-time former junior Navy officer.  But most importantly, I’m from quite near Norway, Michigan and Norway, Wisconsin, and up on the Great Lakes where things – the ice freezes.  So we’re quite familiar with this.  I also had the honor of having a family friend of the late United States ambassador to Norway, Loret Miller-Rupee, who I’m sure you probably recall. 

MS. FAREMO:  I have.

Q:  The United States – you talked about a thousand years of peace with Russia.  I don’t think we can actually claim that with Canada.  We tried to invade Canada in 1775 and were unsuccessful.  (Laughter.)  We tried again in the War of 1812 and were unsuccessful, again, and finally decided to make peace with Canada. 

All of that’s wonderful but I’ve noticed that just as the Russian submarines are planting little flags on the base on the bottom of the Arctic Sea, the Canadians – our good friends, the Canadians, we love them – are also making some claims up there.  So I’m just wondering – a very broad question – how you see the kind of family – (chuckles) – discussions not just with Russia but with all the stakeholders.  You can bring in China if you like but Canada is right there. 

MR. WILSON:  Callie Peter MacKay has been outspoken on this issue.  Let me pick up Sun-jin’s question here, two rows back, please. 

Q:  Madame Minister, Sun-jin Choi (ph) at Langham Partners (ph).  I am interested in following up what your comments said Norway is third-largest exporter in oil and gas.  And but, also, oil and gas represent 22 percent of Norway’s GDP. 

My question is, I’m interested how the Norwegian government works well with interest in government – particularly Farouk al-Karim’s (ph) contribution to write white paper, how to work with to set up a petroleum directorate.

And second, to create an oil-industry regulator.  And third, how to work with the (Statoil ?).  So I’m interested how the Norwegian government successfully work in government industry for the past 40 years?

Second question is the law of the sovereign wealth.  Norway’s sovereign wealth is the second-largest in the world, which reached $518 billion, I believe, at the end of 2009.  But also, Norway sovereign wealth  played very interesting and positive externalities, in my perspective.  Norway’s sovereign wealth funds in first corporate sector such as – (inaudible) – Rio Tinto, to change its behavior of the – (inaudible).  I’d be interested in your perspective on these two points.  Thanks. 

MR. WILSON:  So our neighbors to the north in Canada, public-private partnership on oil and gas; how the government has worked – (audio break).  And then, maybe a bit outside of the minister of defense’s portfolio, but you’ve held many portfolios:  Norwegian sovereign wealth influencing other actors like Rio Tinto. 

MS FAREMO:  Yeah.  I think you reminded me of the fact that it’s not always about legal framework and international cooperation.  You also have countries who would, of course, mark their rights and self-interest, and you mentioned the flag on the pole. 

So this is, of course, something that we are following very closely but the way we approach, also, the security challenges is in finding ways of cooperation, dealing with both opportunities and challenges in a balanced manner so that you can also talk about the hard issues when necessary. 

I’m not sure that I really want to dig into the challenges that you have with Canada.  But I noticed that it was my U.S. and Canadian friends who came running first when we had the delimitation line agreement in place.  That it’s actually providing a win-win situation to partners who are looking into their opportunities in an area where it used to be uncertainty and where we actually had agreed on how to not challenge each other in a too difficult manner.  So the two parties found out that it was, actually, more easy to draw the line itself to be able to start working on both sides of the line. 

The story about Norwegian oil-and-gas sector is quite interesting.  It started out, ’60s, and Norway knew hardly anything about how to exploit oil, and later, gas.  And the way we worked together with the oil companies and actually made them train very much all of the Norwegians in how to do this and, again, built on a win-win situation where we built a legal framework that has proved quite strong and has, also, been built to distribute the wealth from these resources in a balance has – (audio break) – I think provided, of course, a very positive experience to Norway and the Norwegian and, also, international companies who have had access to the continental shelf.

And I think, also, that we have now started to share some of that expertise with a great number of countries.  The Statoil, which is now listed on the stock exchange, started out as a government-owned company and was, of course, a very important tool for the government in exploiting these resources and also, from the start, worked in a model of three companies that made it also a competition between the companies.  And of course, with an international benchmark, has provided, I think, one of the most efficient, environmentally sound and also, businesswise, very solid oil-and-gas sector compared to, I would say, anywhere in the world.  So we are very proud of that. 

The money, the surplus has been put into a government-owned or state-owned fund.  And that fund has become, as you know, one of the world’s largest funds that is working in any parts of the world except for Norway, and there were some key ethic criterias put up on how to manage the money. 

And that board is, actually, dealing with a lot of issues such as nuclear, tobacco, human rights, landmines criterias that have been applied over the years and which also made – due to human rights and not respecting the right for workers to organize – Walmart one of those companies that were actually excluded from their investment universe. 

So there are a number of companies that have been taken out of the portfolio – the universe that the fund was allowed to invest in.  And actually due to the size of the fund and also, I think, due to the very transparent governance structure, those companies have been working very hard to reenter the investment universe.

So this is an independent board and, as I said, criterias are very transparent.  So we have actually seen some effects of that board of directors governing those criterias and I think the government will move forward with that board as efficiently working as it has been up till now. 

MR. WILSON:  That’s fascinating.  Madame Minister, we’ve hit – I know there are more questions out there but we’ve hit the time where we must let you go.  I think your last answer there, I think, underscored Norway’s outsized influence not just in managing a sort of difficult defense budget in an age of austerity – unlike many of the other NATO allies you have much of a leg out on that – but the outside weight that comes from issues like your sovereign fund, the resources you have from energy and gas and how you use those effectively to shape international norms. 

This has been a terrific conversation.  I appreciate your comments, particularly on the Arctic.  Despite many of the headlines out there, you’ve reminded us that we’re not headed for tension in this area.  There’s the potential for real cooperation and deepening of that.

And second, delivering a strong message on the role of the alliance, I think that’s an important message to bring from a NATO ally to Washington in advance of the Lisbon summit. 

You’ve left us with a strong message about the importance of the alliance focusing – perhaps focusing too much on expeditionary operations; needing to focus on at-home missions as well.  But you bring credibility to that discussion because you’ve got over 500, nearly 600, soldiers committed to NATO’s most important expeditionary operation. 

And so I thank you for the comments today.  This has been a fascinating conversation.  I’m glad that you have been able to come here, and have a successful meeting with Secretary Gates.  Thank you for including the Atlantic Council on your stop.  Thank you very much.  (Applause.) 

MS. FAREMO:  Thank you very much.  My pleasure. 


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