Greenland Self-Government Act and its aftermath for Denmark and the EU

By Georgia Anagnostaki, researcher of the unit «Politics & International Relations»

Greenland is usually perceived as a scarcely populated and glazed island, in fact the largest one in the world. Little do we think about the geopolitical importance of a constituent area that evolved from a Danish colony to a self-governing territory. Greenland (Kalaallit Nunaat) first assumed autonomy after the Home-Rule Act in 1979, then was the first ever country to opt out of the European Economic Community (EEC), today’s European Union (EU), due to the Common Fisheries Policy’s (CFP) intervention in Greenlandic natural resources. The so called “Grexit” occurred in 1985, with several treaties and protocols amending the European acquis up to that year and settling the relationship between Greenland and the EEC. The hypothesis here is whether Denmark, and by extension the EU, is clinging onto any potential aces in Greenland.

In the last decade, however, the interests of Denmark, the EU, the US as well as China have shifted towards the island’s mineral reserves and, to a lesser extent, the impact of climate change. In that context how could the EU and Denmark, as the closest players to Greenland, benefit from their current status and legal bonds with the Self-Government? What is Greenland’s advantage and role in the Arctic? How do interests of players such as China and the US collide?

The path to independence

A colony until 1953, when it was redefined as a district, Greenland was still under the rule of the Danish Realm when the country joined the European Communities (EC) in 1973. The inhabitants are 85% indigenous people, the Inuit, with the remaining percentage consisted mostly of Danes. Therefore, it is not questionable that in the 1960’s and the 1970’s the Greenlanders (Kalaallit) expressed their desire for greater autonomy, which led to the formation of the Commission on Home Rule, in 1975. The Home-Rule Act, adopted by the Danish Parliament (Folketing) in 1978, replaced the Greenland Provincial Council and the Governor with a locally elected assembly called “Landsting” and an executive body, the “Landsstyre”. The Landsting would elect the Chairman and rest of the members of the Landsstyre, while both bodies assumed legislative and executive powers respectively, that derived from the Schedule of the Act.[1]

The fields under home-rule control mostly concerned fisheries and agriculture, education, culture, health care, protection of the environment etc. Foreign relations would remain under the central authorities’ jurisdiction, as well as security, judiciary and monetary policy. Yet, Greenland would take part in international negotiations regarding its commercial interests and had the right to get involved into any discussions of the central authorities that regarded Greenlandic matters[2]. It is particularly interesting that the people of Greenland are entitled fundamental rights over the natural resources of the island. Interpreting that, natural resources not only refer to fisheries, but also mineral and hydrocarbon reserves. However, any action targeted to either research or exploitation of any natural resources shall be a product of consent of both the Danish Government and the Home-Rule authorities.[3][4]

At the beginning of the century, an evaluation of the Home-Rule Act began, leading eventually to the Self-Government Act in 2009. First and foremost, the Self-Government Act recognises the Kalaallit (Greenlanders) as a people entitled to self-determination as of right, deriving from international law. The authorities are now the Naalakkersuisut (Greenland Government) and the Inatsisartut (Greenland Parliament), while local courts are also established to exercise power over fields of responsibilities of the island. All fields of responsibility are mentioned in the Schedule, under lists I and II.[5] Moving on, the local authorities are granted an annual subsidy of 3,439.6 million in Danish kroner (DKK), while this amount might be adjusted annually in accordance to prices and indexes. The relation between mineral resources revenue and the aforementioned subsidy will be presented later in this paper. Yet again, regarding foreign affairs and security policy, the Realm is responsible for both, this time with a little twist: there are provisions that allow the Naalakkersuisut to cooperate, on the one hand, with the Danish government on international affairs and to negotiate and conclude international agreements, on the other hand, when these exclusively concern Greenland and the local authorities’ responsibilities.[6] As far as full independence is concerned, Chapter 8 of the Act is dedicated to the matter, establishing that independence is upon the decision of the Kalaallit. The decision must then initiate negotiations between the two governments so as to conclude into an agreement, subject to consent of both the Inatsisartut and the Folketing. Independence leads to Greenland assuming sovereignty.

Nevertheless, the self-governed territory has a long way to go before being entirely capable to stand as an independent state (Hannum, 1996).

The relationship status between Greenland and The Danish Realm

Having presented the general legal frame of Greenland’s self-governance, there are some key features to examine regarding the central authorities’ hold on Greenland. To begin with, the Self-Government is highly dependent on the annual grant from the central authorities, that covers up to two thirds of its budget revenue(BBC, 2018).[7] Since that subsidy is considered revenue for the local authorities and with regard to the island’s mineral resources, there are specific provisions that establish a connection between the two. An increasing revenue originating in activities related to mineral reserves, such as exploitation or research, would mean that the Danish grant be reduced accordingly. Such provision means that the more Greenland benefits from its own resources, the less it will depend on The Realm. Additionally, when that subsidy reaches DKK 0, negotiations shall commence between the Naalakkersuisut and the Danish government concerning future economic cooperation, such as resumption of the subsidy and distribution of the revenue from the mineral resources exploitation.[8] Furthermore, Denmark would provide consultation and various services to the local authorities on mineral resources related activities. Taking the above into consideration, we can see that there are ways for Denmark to benefit and/or interfere in a way in the exploitation activities.[9]

At first, the mineral resource area was under List II of the Schedule, meaning that it would be assumed by the Self-Government in time after negotiations with the Danish Government. So, in December 2009, the Mineral Resources Act was issued, a document that set the legal framework for all activities around the subject, meaning exploitation, research, environmental protection etc. Apart from giving the right of use and exploitation to the local authorities, Danish presence is ensured through two bodies: the Geological Surveys of Denmark and Greenland (GEUS) and the National Environmental Research Institute (NERI), in order to conduct research that must be made known from the Danish Government to the Greenland Self-Government.[10] Denmark also missed any opportunity for involvement via administration, since the Mineral Resource Authority (MRA)or the Greenland Minerals Authority (GMA) is the collective body of each authority in Greenland that exclusively administrates all matters around mineral reserves(Boersma & Foley, 2014).[11][12]

Despite the fact that Denmark doesn’t have any powerful legal means on profiting from the mineral resources, the central authorities still have exclusive jurisdiction over most matters of foreign affairs, judiciary, defence and national security, all financial and monetary policy. Simply put, Greenland has a lot more responsibility to take over concerning strategic fields for a sovereign state. Even when the marine environment is concerned, the Self-Government’s responsibility is limited to all water and ocean areas within a radiance of only the first 3 nautical miles from land, while Danish authorities are responsible beyond the 3 n.m. up to 200 n.m., which demarcates Greenland’s Exclusive Economic Zone (EEZ). Regardless, responsibility of mining activities across all waters lies on the Self-Government.

The first country to opt out of the EU

In 1982 Greenland held a referendum so as to exit the EEC, namely due to the CFP(Phillips, 2016). After two years of negotiations, Greenland parted in 1984, resulting in the EEC losing half its territory.[13] Between the parties, being the EEC on one hand and Greenland and Denmark on the other hand, treaties established the path to be followed regarding Greenland’s new relationship with the community.[14] More specifically, the EEC wanted to ensure that its benefits on fisheries wouldn’t be severely compromised, therefore the agreement “buys” fishing quotas from Greenland in exchange for a fixed compensation that may be adjusted annually proportionately to the supplementary quotas allocated to the community.[15]

Since the relationship of the EU and Greenland have progressed, it would be essential to see how it functions in the present. Greenland is one of EU’s OCTs, meaning that there are some set fields of cooperation between them. Education, tourism, energy matters, climate change and mineral resources, as well as Arctic matters are key aspects of interests. Greenland is highly engaged in discussions on energy and climate change, as a country immensely affected by the latter. Going through the legal framework of this special bond, one can understand that the EU wishes to invest deeply on Greenland and has provided with particular provisions on protecting Greenlandic goods from duties, grants a large capital targeted to the sustainable and holistic development of the region while accepting Denmark’s role as a “protector” of the island.[16] Overall, the relationship between the three factors is considered a “partnership”.[17] The Union recognises the geostrategic importance of Greenland, therefore shows eagerness to support, uplift and put the Self-Government in the centre of the Partnership’s discussions. The EU also seems to pledge support, both financial and tangible, adding the social sector as well as research and innovation on the table. On its part, the Self-Government is obligated with reporting to the Commission on the progress made and the effectiveness of the aid provided, so as to evaluate and ameliorate the agreement, after the passage of the 2014-2020 period scheme.[18]

Although the Union seemingly has no strong hold over Greenland’s decisions and operations, the Self-Government makes great use of the European fund and assistance, reducing its capabilities for independence in the proximal future.

Current circumstances: how interests in the area vary – China, US, EU, the Realm

In recent years, the ice sheet over Greenland’s surface has started to melt, creating opportunities for exploitation of the subsoil for mineral resources. The island is rich in raw materials, gold, diamonds, lead, zinc and hydrocarbons. But the key reserve of Greenland is its rare earth elements (REE)(Boersma & Foley, 2014).[19][20] Being so close to the Arctic, there is no doubt that anyone with access in the area has a great advantage, in terms of research and exploitation. The Arctic offers for immense opportunities and equal challenges(Degeorges, 2013).[21] Greenland has become a point of joint interests in the Arctic of the US, EU and China,[22] while also posing a great region for polar research regarding climate change(Degeorges, 2012).[23] Greenland is on the right track for seizing upon its own reserves, with a legal frame so adequate as to allow the Self-Government to determine the most beneficial partnerships.[24] However, such tactics have concerned the Danish government and the EU(Shi & Lanteigne, 2018).

Any concern from their European peers originates in China’s involvement in the region. China is only an observer in the Arctic Council, as a non-arctic state, yet it seems to be deeply engaging with operations in the region.[25] China and Greenland are discussing investments of the first on mining, tourism, scientific research and infrastructure.[26] Particularly on the latter, the China Communications Construction Company (CCCC) shows interest in expanding major airports on the island, so as to facilitate better transportations on the territory, attracting more tourists and investments.[27] The Danish government has also shown interest in promoting Danish companies’ involvement on that project as well as funding part of it, a move highly objected by the local authorities.[28] The Realm is, however, concerned about the US reaction to China’s presence in the region, since the States hold the Thule Airbase in North-West Greenland and deem the island of strategic importance as the shortest route from North America to Europe(Kirk, 2018).[29]

As partially a matter of National Security, Denmark might have the right to interfere, if the Sino-Greenlandic cooperation persists and causes major inconvenience to Denmark and EU’s traditional ally, the US.

Conclusions

To the Self-Government, independence is crucial. Despite the recent further assumption of powers, Greenland seems to want more: potential sovereignty. The need for economic independence is crystal clear, in order for Greenland to develop, for example, defence systems and capabilities, let alone provide from their own revenue to their own people. As far as the island feeds on fisheries and the Danish subsidy, independence discussions sound utopic. Yet the Self-Government is aware of that, which is why Greenland declared that they simply “can’t afford” to sign the Paris deal on reducing fossil fuel emissions, despite the fact that they are highly affected by global warming.[30] Greenland must start investing on research and exploitation of mineral resources, as well as attracting foreign investments. Wanting to cut ties with Denmark and possibly the EU plus attracting massive investments, a fundamental cooperation with China seems inevitable.[31] It only remains for us to see what European and Danish diplomacy can do to protect their own benefit from the region and relations with the US.

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[1] In addition, the Danish authorities would have a representative in Greenland, titled as High Commissioner or Rigsombudsmand, who took on the former role of the governor. The High Commissioner may be invited to participate in legislative and executive procedures, although his figure has no actual potency but being the liaison between home rule and central authorities.

[2] Section 16, paragraph 2 of the Home Rule Act

[3] Home Rule Act, Section 8

[4] After the implementation of the Home-Rule Act, institutions and companies went through reforms, such as the Royal Greenland Trade Department (KGH), or as reformed the Kalaallit Niuerfiat.

[5] List I concerned fields of responsibility that the local authorities could assume at any time deemed right, while , list II referred to fields that can be assumed by the self-government authorities after negotiation with the Danish Government.

[6] Act on Greenland, Chapter 4

[7] BBC country profile, available here.

[8] Self-Government Act (Act on Greenland), Chapter 3

[9] Self-Government Act (Act on Greenland), Chapter 3, section 9

[10] Mineral Resources Act, part 1, section 2

[11] Mineral Resources Act, part 1, section 3

[12] Notably, uranium mining activities have been a thorn in Greenland-Denmark relations. The Greenlandic government is split in half, tending towards allowing any mining projects, while Denmark is vastly opposed. (Boersma & Foley, 2014)

[13] Undoubtably, the negotiations fell upon resistance: from Italy and Spain, for reasons of breakaways of Sicily and Catalonia, as well as to protect fishing interests, such as those of the UK and Germany. Also, “The Danish government at the time was very pro-European, but they also respected the Greenlandic choice of opting out” says Lars Vesterbirk (The Telegram, 2017).

[14] Official Journal of the European Communities (L29), Volume 28, 1 February 1985:
Treaty amending, with regard to Greenland, the Treaties establishing the EuropeanCommunities / Agreement on fisheries between the European Economic Community, on the one hand, and the Government of Denmark and the local Government of Greenland, on the other / (EEC) No 223 / 85 of 29 January 1985 / (EEC) No 224 / 85 of 29 January 1985 / (EEC) No 225 / 85 of 29 January 1985 / Protocol on special arrangements for Greenland / Protocol on the conditions relating to fishing between the European Economic Community, on the one hand, and the Government of Denmark and the local Government of Greenland, on the other

[15] a) Agreement on fisheries between the European Economic Community, on the one hand, and the Government of Denmark and the local Government of Greenland, on the other – article 6
b) Protocol on the Conditions relating to fishing between the European Economic Community, on the one hand, and the Government of Denmark and the local Government of Greenland, on the other – article 2 & 3

[16] mostly on financial fields, e.g. protocol 17, TFEU

[17] Decision 2014/137/EU of the Council

[18] Denmark and Greenland, on the one hand, and the EU, on the other hand, (the sides) have also signed a programming document for the sustainable development of Greenland covering a period from 2014 to 2020, addressing subjects such as the Arctic, mineral resources, tourism, the social sector etc.

[19] The EU is highly dependent and has a huge deficit of raw materials, the subject of which is even mentioned in the Joint Declaration between “the Sides”, under their common objectives. Greenland is also featured in EU’s development policies, expressing aspirations that Greenland could become an important supplier of raw materials, against China (another “treasury” of them). Regarding the REEs, the island, although not having a vast reserve compared to Brazil (37.01% of the world’s reserves) and China (25.33%), could be a mid-size supplier, while there are speculations of a greater quantity of REEs that has yet to be discovered. (Boersma & Foley, 2014)

[20] “There is something paradoxical about the European Union’s ambitions to work closely with Greenland in order to prevent its critical minerals, such as rare earth elements, to be ‘locked in’ by China. China’s dominance in rare earths markets has captured the attention of policymakers in the EU, the United States, and Japan. Its dominance however has little to do with the physical availability of these critical minerals.” (Boersma & Foley, 2014)

[21] (Degeorges, 2013)

[22] Apart from research and exploitation of potential hydrocarbon reserves (which yet need to be further proven), the Arctic provides for shipping/trade routes, some of which have already been established, such as the North-East Passage. (Degeorges, 2012)

[23] Being so close to the North Pole, the island is more easily affected by climate change, as the temperatures rise faster, rendering the region eligible for getting adapted to the phenomenon as a whole (Degeorges, 2012).

[24] With an eye to economic growth that would hopefully lead to independence

[25] China issued the Arctic White Paper, a document referring to all fields of interest and potential action, emphasising the respect to international law, protection of the environment and sustainability of the area.

[26] While China is likely to invest in Greenland targeting these fields, there is a chance that Greenland will export drinking water into the Chinese Market (W, 2018)

[27] Tourism and Mineral resources are fields of cooperation between the EU and Greenland, mentioned in the sustainable development programming document for 2014-2020. However, here we see high engagement of Greenland and China on the same fields.

[28] so much that the pro-independence political party withdrew from the coalition government in September 2018

[29] Kirk, L., 2018. Greenland votes with eye on independence, EU Observer [Online] Available here. [Accessed November 2018]

[30] Vidal, J., 2016. Independent Greenland ‘could not afford’ to sign up to Paris climate deal, The Guardian. [Online] Available here. [Accessed November 2018].

[31] “As the above examples make clear, attracting Chinese investment is probably the most likely option for Greenland to attract the kind of multibillion dollar financing needed to convert resource claims into large-scale mining operations in the present international environment.” (Boersma & Foley, 2014)

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