Extraction in Greenland

During recent years Greenland has been in the process of redefining its foundation from relying on fisheries to be­coming an industrialised country in the Kingdom of Denmark, i.e. Denmark, the Faroe Islands and Greenland.

Due to the discoveries already made as well as the ex­pected discoveries of mineral deposits, including oil and natural gas, the mineral industry is expected to become the most important industry in Greenland in the years to come.

Introduction

During recent years Greenland has been in the process of redefining its foundation from relying on fisheries to be­coming an industrialised country in the Kingdom of Denmark, i.e. Denmark, the Faroe Islands and Greenland.

Due to the discoveries already made as well as the ex­pected discoveries of mineral deposits, including oil and natural gas, the mineral industry is expected to become the most important industry in Greenland in the years to come.

Several laws regulate the area, most importantly the Mineral Resource Act and the Large Scale Project Act. These laws must be seen in connection with the Kingdom of Denmark Strategy for the Arctic 2011-2020 the purpose of which is to reinforce the foundation for appropriate cooperation on the many new opportunities and chal­lenges that the Arctic is facing. Emphasis is put on growth and development of the Arctic with respect for the vulner­able climate, environment and nature.

Regulation of the mining industry and the Large Scale Project Act

The principal law regulating the mining industry in Green­land is the Mineral Resource Act of 7 December 2009 which came into force on 1 January 2010. The administration regarding mineral resources in Greenland is handled by the Bureau of Minerals and Petroleum (BMP) under the Green­land Self-Government authorities, but during the ad­ministrative work the BMP cooperates with the Danish Energy Agency and the Danish Environmental Protection Agency etc. when necessary.  

The act is intended as a framework act laying down the main principles for the administration of mineral resource activities. The Greenland Self-Government has laid down provisions in executive orders and standard license terms which aim to ensure that the activities are securely per­formed as regards safety, health and the environment etc.

On 1 January 2013 the Large Scale Projects Act came into force. The act allows a company to invite tenders for con­struction projects on special terms, provided that the com­pany has been granted the necessary approval. The act stipulates a minimum hourly wage for foreign workers in Greenland, but at the same time, the access for companies to employ foreign workers in large scale projects is ex­panded during the construction phase of the projects. This means that the Large Scale Projects Act allows companies to hire foreign workers outside the collectively agreed hourly wage in Greenland.

The aim of the act is to promote foreign investments in Greenland and to prevent and limit negative consequences to the Greenlandic society. There are only approximately 57,000 inhabitants in Greenland of which 16,000 lives in the capital Nuuk. Thus, it will most likely have a huge influ­ence on the community if for instance the company Lon­don Mining Plc., which is planning a large iron ore mine near the capital, increases Greenland's population by 4 percent through the hiring of Chinese workers.

The rules of The Large Scale Projects Act can only apply to projects amounting to more than DKK 5bn. In addition, it is a prerequisite that capable and available workforce is not available in Greenland. The rules of the act also allow a Greenlandic subsupplier to employ foreign workers and pay them in accordance with the act. 

Because the Danish government administers the foreign policy in Greenland, the Danish parliament has to pass a special act regulating the many foreign workers' staying order that the Large Scale Projects Act can achieve the desired effect in Greenland; this is expected to be done in 2013.

The relation to Danish regulation etc.

Greenland is an autonomous country within the Kingdom of Denmark. Greenland is subject to the Danish Constitu­tion but has had home rule since 1979. The home rule arrangement has been modernized continuously over the years and in 2009 self-government was introduced in Greenland, which means that Greenland can take over most of the legislative areas but is still not an independent state. The Danish government administers areas such as courts and currency, the police force, foreign policy and defense policy as well as all the legal areas not taken over by the Self-Government.

Greenlandic has been the only official language since 2009, but Danish can be used in official matters.

The Danish Supreme Court situated in Copenhagen is the highest court and the Greenlandic Administration of Justice Act is in many ways similar to the corresponding Danish act.

As regards exploration licenses for minerals in Greenland, the licenses are subject to the laws of Greenland and Den­mark in force at any time. Disputes arising between the

Government of Greenland and the licensee will in some cases be under review by the Danish courts and in other cases subject to an arbitration tribunal that will be seated in Copenhagen. The arbitration tribunal will apply Danish law when making its award. 

Thus, knowledge of Danish regulations and case law as well as the Danish language are of huge importance when op­erating in Greenland.

Greenland

 

Greenland is an autonomous country within the Kingdom of Denmark (ie, Denmark, The Faroe Islands and Greenland). Greenland is subject to the Constitutional Act of the Kingdom of Denmark but has had self-government since 2009 meaning that Greenland can control most legislative areas, including the regulation of natural resources.

Due to the findings already made, as well as expected future discoveries of mineral deposits, the mineral industry is likely to become the most important industry in Greenland. The following mineral deposits are already found or expected to be found: rare earth elements, aluminium, coal, oil, natural gas, platinum, gold, silver, lead, copper, ruby, nickel, zinc and many more.

 

Several laws regulate the area - most importantly the Mineral Resource Act and the Large Scale Project Act. Exploration licenses for hydrocarbons and minerals in Greenland are subject to the laws of both Greenland and Denmark. Disputes arising between the Greenland Government and the licensee will in some cases be reviewed by the Danish courts and in other cases be subject to an arbitration tribunal seated in Copenhagen. The arbitration tribunal will apply Danish law when making its award.