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Cablegate: Finns Debate Nord Stream As Government's

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1. (SBU) SUMMARY. Prime Minister Vanhanen said his
Government (GOF) would decide whether to grant an
Exclusive Economic Zone license for the Nord Stream
pipeline project by November 5. If the GOF approves
the license it then decide whether to grant a
construction permit for the project, a process could
conclude as early as December. The public debate over
the last two years has been limited and largely non-
contentious, owing both to the GOF's insistence that
the process is based on law and fact and not politics
or international relations, and to public opinion that
is neither strongly for or against the project. As the
GOF's review draws to a close, public debate has
increased, revealing criticism of the GOF?s handling of
security and environmental issues. Recent
Parliamentary debate reflected the same criticism but
also broad agreement that the project would bring
Russia closer to Europe, and would bring more
environmentally friendly fuel to an area dominated by
coal. Should the GOF's neutral process result in
license and permit approvals, the GOF might face
criticism if the public sees Russia as receiving a
benefit while it fails to take action to address
persistent environmental problems in the Baltic Sea.

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GOF review of pipeline project draws to close

2. (U) Prime Minister Vanhanen, after his October 25
to meet with Russian Prime Minister Putin, stated that
the GOF will render its decision on a license for the
Nord Stream natural gas pipeline project by November
5. The review by the Ministry of Employment and
Economy, which commenced November 2006, will determine
whether the project is permissible in Finland's
Exclusive Economic Zone (EEZ). Should the GOF approve
the EEZ license, a new process will commence: the
Western Finland Environmental Authority (WFEA) will
decide whether to approve a construction permit under
Finland's water legislation. The WFEA could render a
decision as soon as December. While the water license
decision is appealable under Finnish law, a GOF
official told Pol/Econ Chief that the project could
proceed during the pendency of any appeal. (NOTE: On
October 2 Nord Stream received a permit from the WFEA
for munitions clearance. A court has suspended any
munitions clearance as part of a case brought by Finns
who have made a mining claim on the Baltic seabed (a
claim widely seen as an attempt to prevent or delay the
pipeline project). A Nord Stream representative
publicly said he sees no problem, as Nord Stream will
not conduct munitions clearance in the area under
claim. END NOTE.)

3. (SBU) Official statements and public debate on the
pipeline project have been muted through most of the
review process. GOF officials have insisted that the
review is a neutral law-and-fact-based process,
divorced from politics and international relations. As
stated recently by a prominent Bank of Finland
official, countries can put down cables and pipes in
another country's EEZ in conformity with international
law, and Finland cannot forbid a pipeline project that
is "appropriately implemented."

Polling shows modest support and opposition

4. (U) The quiet progression of the review may also
stem from public opinion that neither strongly supports
or opposes the project. According to a poll conducted
last July, 46 percent of Finns would grant Nord Stream
the gas pipeline building permit, whereas 40 percent
would not and 14 percent were unsure. Within the
governing coalition, members of the two main parties,
Center Party and National Coalition Party (NCP),
narrowly supported the project (46 favoring, 40 percent
opposing) while Green Party members had a slight
majority opposing (53 percent). Support was higher for
those in the opposition: 59 percent of Social Democrats
and 53 percent of the (populist) True Finns would grant
the license. While not reaching a majority, more Finns
saw the pipeline's construction as a threat to the
environment, fishing and shipping industry (45 percent)
than saw little threat (32 percent).

Finns speak up in final days

5. (SBU) As the GOF's review nears its end the public

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debate has increased. Critics question whether the GOF
has given sufficient consideration of the project's
security implications and to wider environmental
concerns. On October 21, Juha Puistola, a staff member
of the National Defense College, publicly criticized
the GOF for fostering a "one-sided" debate focused on
the environment, not one also addressing the security
implications. Puistola asserted that the GOF failed to
address the increased strategic importance of the
Baltic Sea for Russia with a pipeline in place, and the
resulting increase of Russia's influence in Europe.

6. (SBU) Former GOF officials also recently spoke out
about the project: former Prime Minister (and current
advisor to Nord Stream) Paavo Lipponen expressed
support for the GOF's environmentally-focused approach
to the project, stating that the pipeline promotes
Finland's traditional role as a "cooperation partner"
between east and west. Former President Mauno Koivisto
said he has no worries about the security implications,
and has "followed the debate with great calmness."

Parliament debates Nord Stream

7. (U) On October 8 the Parliament debated the Nord
Stream project in a plenary session. Security and
environmental concerns, both focused on Russia,
dominated the discussion. Those raising environmental
concerns made a connection between Russia's interest in
laying a pipeline in Finland's EEZ and Finland's
interest in Russia addressing sewage emissions into the
Baltic from Kaliningrad and Russia's failure to join
relevant environmental treaties like the Espoo
Convention. Those raising security concerns wondered
about the failure of the GOF to publicly address
security aspects of the project, and more specifically
about an increased presence of Russian naval vessels in
the Baltic (with a possible impact on Finnish
shipping). The debate revealed widespread agreement
that the project would bring Russia closer to Europe,
and would bring more environmentally friendly fuel to
an area dominated by coal.

Ministers separate politics from the process

8. (U) Members of the Cabinet participated in the
Parliament's debate. Minister of Economic Affairs
Mauri Pekkarinen (Center Party) started the session by
emphasizing that Finland cannot forbid a pipeline
project that is appropriately implemented. Pekkarinen
and Foreign Minister Stubb (NCP) rejected suggestions
that the license's approval be linked to specific
environmental issues like Kaliningrad's wastewater
problem and ratification of the Espoo Convention.
Regarding security, Pekkarinen stated that the absence
of a pipeline might actually result in an increased
Russian naval presence in the Baltic, given an expected
dramatic increase of ships transporting liquefied
natural gas. Stubb and Minister of Defense Jyri
Hakamies (NCP) insisted that there is no reason to
assume that anyone wants to use the pipeline as a
pretext to increase tension in the Baltic Sea region.

NATO mostly outside the debate

9. (U) NATO has played virtually no part in the wider
public discussion of the project. During the
Parliament's plenary session one parliamentarian from
the (largely) pro-NATO NCP, Kimmo Sasi, pointed out the
role played by NATO member Germany in the pipeline's
construction. He suggested that Finland should invite
NATO to discuss the future of the pipeline, and even
join NATO itself. This prompted an outburst of "Sasi is
bringing NATO to the Baltic Sea!" by a member of the
Left Alliance, a small opposition party opposed to
Finland's NATO membership. Separately, Juha Puistola,
National Defense College staff who publicly lamented
the GOF's alleged failure to address security
implications, concluded that he saw a security benefit
to the project, as the mutual interest in the
pipeline's protection would encourage cooperation; he
said it was far-fetched to think that the pipeline
would bring Russia and NATO into conflict.


10. (SBU) The GOF has succeeded in keeping its review

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of the pipeline project from becoming a contentious
domestic political issue. Mixed public opinion, and
mixed support and criticism across the political
parties, helped keep it a back-burner issue. Assuming
the GOF grants all approvals and the project moves
forward, the GOF could be in for future criticism,
should the public conclude that Russia has taken no
action to improve its environmental record in the


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