AEC: Five Years of Making the Arctic a Favourable Place for Business

Operational in Record Time

The AEC was formally inaugurated in Iqaluit, Canada in September 2014 during the Canadian chairmanship of the Arctic Council. The development of the organization has been rapid during the first five years of the AEC’s existence. Within a year of the organization’s establishment the AEC Secretariat was operational and celebrated its opening. At a historic annual meeting in Tromsø, Norway in April 2016, the AEC members adopted foundational documents that set the stage for engagement with the AEC and provide strategic direction for the organization.

Lillian Hvatum-Brewster is one of the Canadian business representatives to the AEC and has been involved in the AEC’s work from the early days. “As a representative of the Canadian business community, I am proud of the AEC’s achievements. We have made lightyears of progress within a short period of time since the inaugural meeting in Iqaluit”, she says. “I am so very proud to be a member of an organization that is collaborative, inclusive, and believes in playing a part of growing and attracting business in and to the Arctic which, in turn, improves the lives of all.”

As the AEC’s members represent businesses, the office of Secretariat ensures continuity and stability in the AEC’s operations. During the initial years of operations, the operations of the office of Secretariat were graciously funded by the Norwegian business community with additional support from the Norwegian Ministry for Foreign Affairs.

The AEC has strived to develop its operations based on the needs of the Arctic business community. The organization’s first strategic plan covered the period 2016-2018 and provided guidance and an important tool for during the AEC’s initial years. The AEC’s second strategic planning period started in 2019 and builds upon the first strategic plan with the aim of making its goals more operational. The strategic plan is founded on the pillars of Economic growth, Global AEC, Arctic Stewardship in Action and Strong Organization. While many of the goals are of long-term character, work to fulfil these targets and to advance the organization’s goals has been active on all sectors.

Meeting the Expectations

From the start, the AEC has experienced great level of interest and expectations towards its work. To respond to the great interest and to demonstrate the AEC’s willingness to be inclusive, the AEC has had a high level of outreach and activities.

“With the establishment of the AEC, the Arctic business community now has a voice. I am honored to lead as we now continue our work for the betterment of our societies and businesses”, states AEC’s Chairman Heidar Gudjonsson.

The AEC has engaged in numerous partnerships and projects. These partnerships have e.g.  provided and qualified new information related to business in the Arctic and led to the inclusion of the global business community in the AEC’s work. “Within a short period of time, the AEC has managed to increase the understanding of economy and business in the Arctic by providing new information and recommendations”, reminds AEC’s Russian Vice Chair Evgeniy Ambrosov.

Work Based on the Needs of Arctic Businesses

The founding principles of the AEC’s work were approved at the AEC’s inaugural meeting in 2014. The overarching themes of the organization’s work focus on improved market access both between the Arctic states, but also between the Arctic and the global markets; the need for stable rules and regulations; promotion of public-private partnerships as a model for infrastructure development; the need for improved collaboration between businesses and academia; and in embracing traditional indigenous knowledge, stewardship and small business.

“One of the founding principles for the AEC was the business community’s wish to be inclusive. Arctic SMEs, indigenous corporations and big multinationals all stand on equal level”, says Thomas Mack, the President & CEO of the Aleut Corporation and the AEC’s Vice Chair representing the Aleut International Corporation.

The Working Groups play a crucial role in the AEC’s work as much of the substantial work related to different business areas takes place within the sphere of the Working Groups. The Working Groups help shape the conditions of doing business in the Arctic by sharing their expertise and providing new knowledge from the business perspective. By analysing the current business climate in the Arctic, the Working Groups can also provide actionable recommendations for policy makers with the aim of raising the standard of economic development in the Arctic.

Foundation for Successful Operations

Over the first five years of its existence, the AEC has marked several milestones. The AEC was open for business soon after its inaugural meeting. This would not have been possible without the high level of engagement of our members representing businesses, indigenous corporations and indigenous groups.

To strengthen the ties between the business community and academia the AEC signed a Memorandum of Understanding between the University of the Arctic (UArctic) in 2018. Both being spin offs of the Arctic Council, dialogue with UArctic has been very beneficial during the initial years of the AEC’s operations. The Memorandum of Understanding sets the foundation for increased interaction between the two organizations.

One of the challenges facing the Arctic is the perception of the region as an area with low economic and business development potential. The AEC has worked actively to change this perception. An import tool in the AEC’s work related to responsible investments is the Arctic Investment Protocol. Originally a product of the World Economic Forum Global Agenda Council on the Arctic, the Arctic Investment Protocol defines six principles for sustainable investments in the Arctic. The 2017 AEC annual meeting endorsed the intent of the Protocol, and the Arctic Investment Protocol was later transferred to the AEC.

Collaboration with Arctic Council

Good collaboration with the Arctic Council throughout the first years of the AEC’s existence led to the signing of a Memorandum of Understanding between the two organizations in May 2019. The aim of the Memorandum of Understanding is to provide a framework for cooperation and to facilitate collaboration between the Arctic Council and the Arctic Economic Council. This strengthens the AEC’s position as the Arctic Council’s preferred partner in issues related to responsible economic development.

Tero Vauraste has been involved in the AEC’s work since the start and served as the organization’s chairman from 2017 to 2019. “Serving Arctic communities with the whole AEC through Europe, Asia and North America has been a great privilege. Together we have spread the word and networked for sustainable Arctic investments”, Vauraste states.

“We are especially grateful to our dedicated members coming both from the Arctic and outside the region. Without their commitment, we would not have been able to build the AEC from scratch in record time. I would like to thank all those who have contributed to our work and supported us over the last five years. We are excited about the years to come”, says Anu Fredrikson, the director of the AEC office.