The relative power of environmental assessment as a governance tool: organization and the case of the Nord Stream gas pipeline

Abstract

This paper seeks to contribute to an understanding of the role of power by introducing an organizational perspective to the study of environmental assessment (EA) procedures. By analysing the transboundary environmental assessment (TEA) for the Nord Stream gas pipeline between Russia and Germany, we show that Nord Stream used some of the sentiments imbedded in the institutionalization of TEA and the Espoo convention's formal rules to legitimate its interests. The acts of organizing and organizational relations, however, are what can explain agency and power between organizations and hence the relative power of EA as a governance tool.

Keywords::

• environmental assessment
• TEA
• transnational governance tool
• organization
• institution
• power

Introduction

This paper takes as its departure point that an understanding of the relative power of environmental assessment (EA) as a governance tool could be improved by giving more attention to organizational theory. Organizational theory is here used to highlight not only the role of organizations as important actors, but also the difference between decisions taken by powerful organizations and the values and norms that are spread and upheld through EA standards.

The conditions for environmental governance must today be seen in a transnational context. In the research field of transnational governance (Hale & Held 2011), it is pointed out that there is an increased need for states to adapt to a changing institutional environment. Transnational relations are being re-regulated through new constellations of states and other organizations such as commercial companies and NGOs. Alongside traditional forms for regulation, such as legislation issued by nation states, there is now an expansion of new regulations, issued by standard-setters and international governmental organizations, that transgress the boundaries of the old state territories and polities (cf. Djelic & Sahlin-Andersson 2006).

Policy instruments such as EA can be seen as part of this transnational regulatory order. The regulations that are binding are relatively vaguely formulated (e.g. in national regulations on EA), while soft law standards and expertize concerning EA are producing rules and knowledge that are shared across national borders and between private and public sectors.

Governance scholars with an institutional perspective have contributed to the understanding of the role of institutions and institutionalization in transnational regulation. The definition of institution in this literature, however, varies widely. Sometimes ‘institution’ is used to denote both formal and explicit rules (such as law, directive and standards) and informal and implicit rules (such as norms, routines and trends). The consequence of using a wide definition of institution is that it is more difficult to understand agency, responsibility and power. This can be understood as a more general problem that has been pointed out by scholars in organizational theory, namely that the concept of organization has taken a downturn in favour of increased interests in concepts such as institutions, network and culture (Ahrne & Brunsson 2011).

The aim of this paper was to contribute to an understanding of the role of power in and through EA by introducing organizational theory to the study of a TEA procedure. TEA is a subset of EA. In this paper, we will use EA when we refer to EA more broadly, and TEA when we refer directly to the TEA procedures that are regulated by the Espoo convention (1991).

An understanding of the role of power of EA as a governance tool requires, we argue, the use of an analytical distinction between organizations and institutions, a distinction that so far has not been underpinning the theoretical perspectives of EA scholars. We propose, in line with Ahrne and Brunsson (2011), that there are many merits with restricting the concept ‘institution’ to the orders that are shaped by taken-for-granted beliefs, routines and norms, and to use the concept ‘organization’ for formal and explicit rules and decisions. The concept of organization also stresses the relations between organizations, their relative power, history and allocation of resources as a way to analyse social change and interaction. The implications of the differences between the taken-for-granted institutionalized orders, i.e. norms and routines that have emerged over time, and decided orders, that can be directly traced back to decisions taken by particular organizations, for understanding power will be further explained in subsequent sections.

The paper is structured as follows: first we give an overview of previous summaries of the theoretical groundings of EA research and discuss the implications of this for a more overarching understanding of social order. Second, we introduce organizational theory for which the distinction between institutions and organizations is significant. Third, after giving a brief introduction to the planning process for the Nord Stream gas pipeline between Russia and Germany, we use the case illustratively to show the relevance of organization for understanding the context in which TEA is situated. Thus, we want to show with our case study that, on the one hand, there were institutional forces that Nord Stream adhered to in order to gain legitimacy and, on the other hand, power was the foremost to be found among the organizations and organizing rather than in the institutional order. Fourth, in the concluding discussion, we summarize the conclusions from our case study and discuss the implications of our approach for understanding power in EA research in general.

Understanding TEA as a governance tool

Changes in modes of governance have led to an international shift from regulatory control models to soft laws and more flexible regulatory instruments. It is partly the limitations and failures of the traditional command and control approach that have generated ‘a second generation of instruments which promises greater flexibility, efficiency, effectiveness and legitimacy’ (Sairinen 2003, p. 73).

Among the new forms of regulatory instruments especially designed to regulate environmental impact, Sairinen (2003) mentions environmental taxes, voluntary environmental agreements between public authorities and industry, voluntary environmental management systems, eco-labelling and EA systems.

In several countries, the debate prior to introducing EA into national legislation treated the EA reform primarily as an issue of participatory democracy (Sairinen 2003, p. 88). As it was more than 40 years ago that hopes for participatory democracy were invested in EA as a legislative tool, it is striking that much of the EA research does not have a better theoretically grounded view on what has happened in the world since then. The conditions for making EA a tool for participatory democracy or a ‘vital tool for sustainable development’ (Pope et al. 2013, p. 8) need to be seen in relation to the wider organizational landscape and the role of EA as a governance tool in that landscape (cf. Weston 2010).

Research on TEA and strategic environmental assessment (SEA) seldom explores these policy instruments in relation to a wider context of ‘transnational governance’, but often expresses the view that even though current ‘practices are poor’, it is still possible to invest some hope in the future development of these policy instruments (Fischer, 2003; Albrecht, 2008; Koivurova, 2008). For example, it is concluded that adequate experiences and procedures are lacking but when these are in place, EA can become an efficient tool even in a transboundary context. The experience of transboundary consultation, which slowly has become a common procedure, ‘gives hope that the obstacles to, and hurdles for, transboundary SEA will be reduced and finally disappear’ (Albrecht 2008, p. 296–297).

Others are more critical and point to the fact that ‘although there is an obligation to carry out EA in many countries, too often this is an employment programme for consultants, lawyers and civil servants rather than an instrument for environmental protection’ (Bastmeijer & Koivurova 2008). The attention to the administration and commissioning of consultants in connection with EA confirms that while these policy instruments may be inefficient, they are productive in the sense that they generate new professions and procedures. A study by Koivurova and Pölonen (2010) of the TEA procedure applied to the Nord Stream pipeline partly confirms this by describing the innovative ways in which the procedure was organized, and how this generated more detailed rules on how the Espoo Convention should be applied, prepared by the Espoo Convention Secretariat (when it was discovered that the Espoo Convention was not designed for complex activities such as the Nord Stream pipeline). However, while Koivurova and Pölonen (2010) raise several important critical points, they are still promoting a rationalist view on EA as policy instruments that can be designed so as to effectively regulate environmental impact.

Both recent and earlier efforts to summarize the theoretical grounds for EA research emphasize that the view on effectiveness will vary depending on the theoretical lenses that are in use (Bartlett & Kurian 1999; Leknes 2001; Morgan 2012; Cashmore et al. 2012). We will briefly revisit some of the theoretical groundings in EA research and discuss these in relation to the research field of transnational regulation.

The turn to institutional perspectives in EA research

Through the study of transnational regulation across a diverse set of regulatory fields, Djelic and Sahlin-Andersson (2006) have identified a number of institutional forces that they argue make up a transnational culture to which organizations relate and adapt. The notion of ‘force’ in this context chimes well with the notion of cultural or institutional frames (cf. Meyer & Rowan 1977; Djelic 2011, p. 44) and a similar notion of ‘driving forces’ has been used also in an EA research context, when, for example, explaining an increased recognition of the ‘need to engage the public more in environmental governance’ (Partidario & Sheate 2013, p. 26).

Besides having legislative status through a range of EA regulations (national, EU and international), EA practices are supported by a range of principles and standards. Such standards form part of the wider process of transnational governance, and the International Association for Impact Assessment is a good example of a regulatory organization that produces and promotes transnational standards (IAIA 2010; 2012; see also André et al. 2006).

The understanding of institutions as taken-for-granted norms and standards that have the potential to spread worldwide can be helpful in understanding EA as a transnational governance tool. The neo-institutional perspective is, however, only one of several possible theoretical groundings of EA research, which is sometimes mentioned alongside other theoretical groundings such as a rational decision-making model or a negotiation perspective (cf. Leknes 2001). The neo-institutional perspective entered EA research because of the need to find perspectives that could be used for counteracting a rational and linear model of decision-making. As a critique against the rational model, the neo-institutional perspective was useful, as attention could be:

[…] directed upon the organisations that participate in the decision-making process. The decisions and actions of organisations are explained by formal rules, the legal framework, gained experience/established action patterns, and norms and values linked to how one should act in certain situations. (Leknes 2001, p. 315)

The neo-institutional perspective was rooted in empirical studies of how organizations function, as opposed to the ideals of rational decision-making. Eventually, the norms and ideals of collaborative planning grew stronger among theoreticians and practitioners of EA, and did so in explicit opposition to rational planning (cf. Morgan 2012). When the consensus-oriented and collaborative model of planning resulted in calls for more critical approaches that could also analyse power and conflict, however, this mainly, but not exclusively, resulted in analyses of micro-power in EA, looking at ‘the ability of different groups or individuals to enter social negotiations in an equitable way’ (Morgan 2012, p. 8). What we miss is a more theoretically grounded understanding of EA as a transnational governance tool. We also note that some recent efforts to bring in power to the analysis of EA lack both a transnational perspective and an organizational perspective.

What organizational theory could add to EA research

The organizational theory we propose is one that distinguishes between different types of social order. Transnational governance relations are often depicted as new constellations among states and other organizations such as private companies and NGOs. Rather than speaking of such shifts in vague terms such as globalization or ‘from government to governance’, organizational theory has other, and more analytically helpful, conceptual tools for understanding changed conditions for governance. We believe that two pervasive changes underline this shift: an ‘explosion of rules’, which is an expansion of forms of regulation that are issued by standard-setting organizations or international governmental organizations (Brunsson & Jacobsson 2000; Ahrne & Brunsson 2004), and an ‘explosion of organization’, which means that the number of formal organizations are growing, but also that organizing ‘characterises much of the global order’ (Ahrne & Brunsson 2011, p. 83). It is not often, however, that these two major trends are recognized simultaneously in the literature on transnational governance.

Not everything is organized or structured through organizations, there are norms, values, institutions and culture that also in some way order or give stability in the world to facilitate interaction. However, people are affiliated with a large variety of organizations in everyday life ranging from work, interest organizations to municipalities and states. In this sense of an organization, it is understood as a decided order, which has well-defined members, rules, hierarchy and resources (Ahrne & Brunsson 2011). It is through the coordination of collective efforts that resources are allocated and larger tasks are managed, impossible for the lone individual, or networks, as networks do not have a clear centre, authority or bounded resources.

We will in the subsequent sections analyse the case of the Nord Stream pipeline. We recognize the nation states in our case as organizations (cf. Ahrne 1998). States are, similar to other formal organizations, characterized by their well-defined members base (citizens), they are hierarchical, governed through decisions, have control over resources and do monitor and issue sanctions on its members. States are not monolithic entities with unitary agendas, but in the EA case of the Espoo convention it is states that are the main actors and point of contacts. This is in our view sufficient to treat states as actors and to separate their rules and structures from mere institutionalized practises.

Institutions are, on the other hand, repeated practices, rules, norms, cognitive perceptions and so on that has evolved, often informally, often without formal decisions being made and which have a taken-for-granted quality. Therefore, institutions, as being part of the cultural domain, cannot act, it does not have reflexivity and it has no resources.

Interaction, communication and governance are dependent on some sort of social order. How to conceptualize the boundaries between different orders, e.g. cultural, institutional and organizational, is one of the defining questions of organization theory. Classic organization theory mainly studied formal organizations and their relations. From this followed a view on organizations as bounded and a distinction between organizations and their environment, which foremost consisted of other organizations and individuals. Institutional organization theory, however, added the weight of the socially constructed institutional structures of society in which organizations are imbedded. Organizations came to be understood not only as dependent on their exchange and relations with other organizations but also strongly influenced by their institutionally structured context. With this came an insight that organizations are not simply technically rational with fixed interests and preferences, but also culturally bounded and influenced.

Without denying the relevance of cultural and institutional orders, we argue that it is on the organizational level that agency, resources and reflexivity resides and that this level must be given precedence in analysis of change and power. In terms of boundaries between different kinds of orders, it has been argued that organization theory should be grounded on how organizations try to extend their activity and partially organize their environment (i.e. the environment here means everything that is outside a formal organization, which means not only other organizations but also individuals and groups) (Ahrne et al. 2007). A decided order is made up by formal organizations that through decisions describe and categorize goals, members, identities, resources, status orders and division of labour (Ahrne & Brunsson 2011, p. 85).

We highlight three implications of this proposed theoretical perspective for a better understand EA as a transnational governance tool: first, a rather simple, though important, implication – EA practices need to be situated within a context in which some organizations have more resources and powers than others. Nation states are still very powerful organizations in a transnational world order.

Secondly, it proposes an understanding of decisions as ‘partial organization’. This means, for example, that actors' relative power within an EA procedure is also a consequence of active decision-making (the organizers' power to set up rules for the game, giving some actors an entrance ticket or even a role to negotiate the rules of the game). But, even more crucial, is all the decisions that have been taken before the EA procedures start (the initiating and the planning that sets the scene to which EA procedures can enter).

Thirdly, this perspective makes it possible to analyse the relation between decided orders (formal organizations and decision-making) and institutional order (e.g. the institutional values that underpin EA). The implications of the organizational perspective for understanding the relative power of actors, resources and policy instruments such as EA will now be discussed in relation to a case: the planning and building of the Nord Stream pipeline and the TEA procedure. First, we give a brief background to the case.

Background to the Nord Stream case

The Nord Stream pipeline is a twin pipeline system that runs through the Baltic Sea from Russia to Germany, crosses the economic zones of Russia, Finland, Sweden, Denmark and Germany and runs through the territorial waters of Russia, Denmark and Germany. The construction of the pipelines is completed and transportation of gas from Russia to the European Union started in November 2011.

The Nord Stream consortium was established in 2005 for the planning, constructing and operating of the pipelines.1 Nord Stream produced a TEA on the request from the littoral states through which the pipelines were planned to be drawn. In the TEA the proposed routings were such that the pipelines in no alternatives were to cross the territories of the Baltic States or Poland. This means that in the consultation process the Baltic States were given the status of ‘affected parties’ and not ‘parties of origin’. This decision was crucial as the latter implies the mandate to say no to proposals.

The significance of the project from a European energy supply perspective is motivated by the Nord Stream Consortium on its project page, where it is stated that ‘the project strengthens the EU energy market and reinforces security of supply’ (Nord Stream 2012). The European Commission has referred to the project as one of the highest priority energy projects in the EU (EC 2006).

The building of the pipeline has potential environmental impact in several countries. The convention on environmental impact assessment in a transboundary context (the Espoo convention 1991) requires countries to inform one another if a proposed activity might have an impact across national boundaries. The Nord Stream Espoo process is so far the most complex instantiation of the Espoo convention. The Espoo convention, similar to other EA regulations formulates procedural rules. It does not stipulate in detail how an international EA consultation process can or should be organized. So how can we understand the process from an organizational perspective?

Methodological approach

We use the case of the Nord Stream pipeline to illustrate a process of transnational governance. It is an example of a transboundary governance process in that it involves states, governmental agencies companies and NGOs over a period of time that organized cooperation without central authority and was not only governed by state law. Instead, the consultation process was ramified by the Espoo convention and the institutionalized practices of TEA and managed by the organizations involved. The Espoo process and the previous efforts to organize gas connections in the Baltic area have been studied through Nord Stream's documentation and official documents. In order to situate the case within a longer process of established interest in gas export, as well as research on the Espoo process, secondary material has been used in the form of other published research. Another example of secondary material we have used is published media studies of the framing of the Nord Stream pipelines.

The Nord Stream process from an organization perspective

The following section analysing the Nord Stream case will show which are the main organizations concerned with the export of Russian gas through the Baltic Sea, what are the relations between them and how the consultation process has been organized.

Formal organizations and organizational relations

In the case on Nord Stream, the main organizations are the coastal states around the Baltic Sea. The states are the formal parties in the Espoo consultation process and also are the organizations controlling the Baltic Sea with the power to turn down the application. Another important actor is the applicant the Nord Stream consortium which by request of the states perform (by contract of another company) the EAs. What is of importance for the outcome of the consultation process is that of the old and maybe shifting relations, dependencies and interdependence of power, interest and resources among the old organizations in the region.

Germany is not only one of largest and most politically influential states in Europe, it also has a history of being the largest consumer of natural gas, and has been so since the energy source was introduced in the region. Russia, on the other hand, has one the world's largest depots of gas, and has been exporting energy resources to Europe for the longer part of the twentieth century. Both Germany and Russia (the Russian state both as an owner of Gazoprom and as for its export dependent incomes), which have an interest in the design of Nord Stream, have a history of and are dependent on the project to come to close (for the development and dependencies of gas grids in Europe see Högselius et al. 2013).

The power relations between the Baltic states (Estonia, Latvia and Lithuania), Poland and Russia were, for example, reflected in the design of the planed routes in the project prospect in that there were no alternatives of routing the pipelines onshore through the Baltic states or other eastern European states in the project proposal. This was heavily opposed by the Baltic states and Poland and perceived as a step by Russia to extend their power in the EU and at the same time avoid the dependence of the eastern European states. These historical, power and resource dependent relations were further mirrored in mass media as has been showed by analysis of different oppositional themes, for example, Nord Stream has been portrayed as a geopolitical and economic threat mainly by afore-mentioned states (Solumn Whist 2008; Agaton 2010; Bouzaovski & Konieczny 2010).

On the state level of organizing, there are old dependencies on export and import of energy particularly between Russia and Germany which in the politics of the approval of Nord Stream also touched upon other historically grounded geopolitical issues towards the Baltic and eastern European states. The Baltic states are dependent on Russian gas and are paying for gas without having much control over its access. Lithuania, for example, is building a liquefied natural-gas terminal to cut its dependencies on Russia and also negotiating lowered gas prices.

Furthermore, the organization of what eventually became the consortium of Nord Stream and the plans to export Russia gas to Europe through Germany, which is directly related to the Espoo process, is proclaimed by Nord Stream to have its origins back the 1990s. Other projects and ideas have been discussed in different forms and constellations since the 1960s when gas became a real energy source (Högselius et al. 2013). The plans made, decisions taken, collaborations and organizations initiated has been building up to the realization of the pipelines in continuous efforts to organize the coupling of gas grids across Europe and Russia.

In Nord Stream's own historical presentation, the consortium's background and context is described as one that developed out of several projects dating even further back. In the 1980s, several analyses were performed to assess possibilities to transport gas through Sweden to Germany from Barents Sea and the Norwegian Sea, the largest organization being the Trans-Scandinavian project. Some organizations of gas in the Scandinavia region were also realized as the Skanled connection, a natural gas pipeline, between Norway, Denmark, and Sweden (and further to Poland). The Scandinavian Gas Ring were also considered, but cancelled due to economic and environmental constrains. In the 1980s, the organizations of the Swedish company Swedgas and the Finish company Neste planned to connect the Soviet gas grid to Scandinavia. According to Nord Stream, these plans were disregarded during the disintegration of the Soviet Union (Nord Stream Espoo report chapter 2).

The North Transgas Oy (NTG) project between 1995 and 2000 did feasibility studies on routes that later became the proposal of Nord Stream. NTG was owned by Russia and Finland through the companies of Gazprom, Fortum Oil and Gas Oy. Other studies were at the same period conducted by Neste, The Nordic Gas Grid for expanding the gas grids in the Nordic area. An intergovernmental project by the Nordic Council of Ministers was another example on organized efforts to assess the possibilities to increase the gas consumption in the area (Nord Stream Espoo report chapter 2).

The founding of the Nord Stream consortium and the organizing of the Espoo process were clearly foregone by several earlier organizing efforts in the Baltic Sea. The idea of expanding the use of gas, and specifically by connecting to the Russian resources, was established through the many organizational activities leading up to the Nord Stream project.

Partial organization

The idea of partial organization is that formal organizations strive to control their environment rather than simply adept to it. Organizations attempt to bring order in their environment by, e.g. enact conductive rules and monitoring the compliance with them, by organizing other organizations as members or even impose sanctions on other actors without forming complete new formal organizations. Rules, membership, monitoring/sanctions and taking decisions on behalf of other members are elements of formal organization that when used outside of an organization one at the time or in combinations can bring some organized order in the organizational environment.

The Espoo convention is an agreement between member states of the united nations (UN). As such, it is not a set of binding rules tied to decisions and sanctions on its member as would be inside of a formal organization. The Espoo convention is a guiding frame in cases of environmental transboundary threats in the planning of large projects. Therefore, the involved states had to organize their cooperation during the Nord Stream Espoo process.

The international Espoo meetings, which were held by the states partaking in the Espoo process, illustrate how the old organizations, i.e. the coastal states, partially organized the Espoo process. Through the three and half year period that the consultation period lasted its actual outline were decided upon in 16 international meetings (Nord Stream presentation Nordic Council 2011). These meetings were arranged by the ‘point of contact’ governmental organizations which the Espoo convention specifies, e.g. in Sweden, it is the Environmental Protection Agency who handles the exchange of information with other states. During these meetings, the application of the Espoo convention, its time schedule, the notification of affected parties by parties of origin and general expectation and conduct of the company and the points of contacts of the states were decided on.

All but Russia had ratified the convention and its rules as members of the UN as the overarching organization of the Espoo convention. However, decisions were taken on which states should be given the status of ‘party of origin’, respectively, and the status as ‘affected party’, that is, a sort of member categorization (cf. Ahrne & Brunsson 2011). Basic rules and codes of conduct were also organized. In this way, the Espoo process was partially organized by the use of elements of formal organization, by appointing member roles and rules of conduct.

TEA, however, reveals more of the power relations between the organizations in the region. The way the Espoo convention process was organized structured and materialized old geopolitical and economic relation in the region. The TEA proposal as it later was accepted, but not without protest, sets up boundaries between the Scandinavian and western EU states and the eastern EU states by avoiding land routes in the project. The outlines of how the TEA was organized also categorized what organizations (i.e. states) would be recognized as having mandate in decisions on final approval according to the Convention on the Law of the Sea (UNCLOS) and other issues during the TEA consultation.

A conclusion that can be made about the role of organization for TEA and power is thus that the actors involved and their respective roles given within the TEA process are the result of active decision-making (cf. Sundström et al. 2010). Organization can be very forceful even when no new complete formal organization is initiated.

The relation between organization and institutionalized values

To understand social phenomena and processes of change, we argue that it is important to recognize the organizing and shifting relations between organizations that as driving or preventing change. But how can the relation between the institutional level and organizational level be understood? We point to two strongly institutionalized values that are of relevance for EA practice and research: science and democracy. The idea that scientifically guided assessment procedures can give a better base for decisions strongly underpins the whole idea of EA. Another strong and constituent value is democracy and the idea that participation, or at least the involvement of a broader set of actors through consultative procedures, can increase the transparency and legitimacy of the process. Sometimes, the value of an extended knowledge base, through the inclusion of several actors in the process, is also highlighted.

Research in the field of transnational governance has also acknowledged scientization and democracy being two particularly strong institutional forces influencing transnational regulation and governance systems in general (Djelic & Sahlin-Andersson 2006). In the Nord Stream case and the implementation of the Espoo convention, both these institutional forces enmeshed in and through the EA tradition are clearly present. But rather than recognizing them as exogenous influences that in themselves drove the Espoo process we see them as being utilized in the organizing of the EA process. The strong norms of science and democracy/participation were materialized in the organizing of, e.g. Nord Stream. In adapting the process in accordance with these institutional forces, we argue that science and democracy were transformed to cultural resources to be used by the organizer – Nord Stream.

The transnational framework of rules and norms, standards and practices around TEA is an institutional order that the stabilized political interests around Nord Stream relate to, but are not determined by.

A neo-institutional approach to transnational regulation has been concerned with the increasing relevance of soft regulation and standards and how these circulate transnationally. Transnational regulation refers to processes and rules that are not legally binding but which nevertheless have become widely spread and used, or in other words ‘soft regulation with potential hard consequences’ (Djelic & Sahlin-Andersson 2006, p. 377). The rise of transnational regulation is in this approach seen to be giving rise to new actors, interests and social relations.

The following sections will describe how the Nord Stream process and the Espoo consultation procedures can be understood through transnational standards on TEA and institutionalized pressures associated with TEA. As a direct consequence of extended soft regulation has been described as ‘a multiplication of resources put on formalized systems of self-presentation and monitoring in many organizations’ (Power 1997), we will in the following mainly rely on the Nord Stream Consortium's presentation of itself and its Espoo process.

We argue, in line with a neo-institutional framework, that the TEA practices are supported by a range of principles and standards that show a similarity with the institutional pressures identified on the basis of a number of other case studies of transnational regulation (Djelic & Sahlin-Andersson 2006). As noted above, in relation to the Nord Stream case we find institutional pressures in relation to science and democracy, particularly relevant.

‘Scientization’ and the belief in the authority of modern science and expertize as expressed in figures and measurements are institutional forces that are underlying the whole idea of environmental assessments. The Nord Stream Espoo report that presents various investigations of environmental impacts and risks is over 2000 pages long. In the report itself, there is a comment on the scope of the report as well as the ambitious claim that the report actually covers all potential impact:

The report rigorously identifies all potential transboundary impacts and conveys their significance in a consistent manner along the entire 1222 km length of the pipelines, has inevitably led to an extensive compendium of documentation. (Nord Stream 2009a, p. 8)

Another institutional force that Djelic and Sahlin-Andersson identify is related to a trend towards greater emphasis on ‘deliberation and participation’. The TEA report is by Nord Stream referred to as ‘a transparent and verifiable tool’ for communicating the potential environmental impact to concerned parties (Nord Stream 2009a, p. 38). The consultation process is described as including a range of actors and activities: ‘members of the general public, special interest groups, and representatives of national governments and the EU’ and during two years (between 2006 and 2008), ‘public hearings, meetings, conferences or consultations occurred at the rate of almost one each week’ (Nord Stream 2009b, p. 11).

Nord Stream presents the process as being led by both a scientific ideal and a democratic ideal in the report where it explicitly expresses that ‘transparent communication of findings is as important an objective as is the rigorous assessment of impacts’ (2009a, p. 8). That communication is not limited to information is made explicit in the report, rather the aim is to foster ‘regular, genuine dialogue with interested parties’ (2009a, p. 66); ‘a two-way communication process’ (2009a, p. 12). This process has resulted in more than 200 comments, suggestions and ideas and according to Nord Stream ‘many of these, where practicable, have been incorporated in the project design’ (2009a, p. 8).

It is also clear that the activities undertaken under the Espoo process framework contain extensive and elaborate organizing, not least in the efforts to make the process transparent. For example, the Espoo Report is published in 10 languages and apart from the almost weekly meetings during two years the use of various communications channels has been extensive such as a regularly updated website, regular newsletters, press releases, interactive multimedia presentation and a truck-mounted mobile information exhibit that travels to major cities at and near the Baltic Sea coast (Nord Stream 2009a, p. 66).

The TEA standards and principles have emerged through transnational institutionalization. Even though Nord Stream does not explicitly refer to such standards and principles very often (the report includes only a minor reference to EA guidelines, Nord Stream 2009a, p. 425), the ideas and principles expressed in such standards are visible throughout the documents and activities in the Nord Stream TEA process. The development of TEA standards is thus a telling example of institutional force – it is a kind of rule-making that nails down what is important to consider, how good processes look like etcetera.

However, when the rules on TEA were applied in relation to the Nord Stream case, the initial plans to build the pipeline and the already established actor constellations were not challenged in any substantial way. For example, the use of TEA seems to have had the function of giving legitimacy to a planning process that was already in place long before TEA was applied; especially by making it possible for Nord Stream to show that they have organized an extensive consultation process and given room for comments and revisions of the initial preliminary TEA.

An example of this is how the preliminary TEA report was commented upon and resulted in quite a lot of critique and suggestions for further impact assessments. For example, the Swedish government requested in February 2008 extensive amendments to Nord Streams TEA due to several referral responses from different governmental agencies and other organizations (Swedish Government 2008). The main question marks were in reference to poorly described alternative routings and the absence of a null route as well as a survey of the whole extent of the pipelines through the Baltic Sea. Other remarks on needed complements were results and consequences of various examinations and a more in-depth technical description of the planned service platform outside of Gotland. Nord Stream answered the call for a more thorough TEA and the initial plans on routing and the building of a platform were also changed or withdrawn accordingly.

One conclusion that can be drawn from this is that delivering a poor preliminary TEA actually enables the developer to show that it takes referral responses seriously, without having to respond to more strategic issues such as the need of environmental impact of the project as a whole. Institutional norms can become the resources of already powerful organizations; in this case, Nord Stream was able to transform norms pertaining to science and democracy to resources that helped Nord Stream showing that the process was transparent, open and scientifically rigorous.

Moreover, the developer through the compliance with terms and demands of the concerned parts in the consultation gain considerable legitimacy for the project. Even though Nord Stream's plans initially were criticized, e.g. for the discriminating seabed routings, the project seemed to be better acknowledged with the major, if not the largest, TEA consultation made, leaving geopolitical and economic issues at the marginal. With the apparently thorough scientific and democratic and transparent organizing among the nine Baltic Sea states, there could not be anything more to object against. The organizing of the consultation procedure established relations, practices, time-synchronized schedules and so on through mentioned frequent international meetings to the benefit of Nord Stream's projects legitimacy.

The legitimacy created through the activity of transnational regulation is, however, weak; it is a legitimacy that can easily be attacked and doubted (Djelic 2011, p. 43). Decided orders, in contrast to institutionalized taken-for-granted orders, also make it visible that things could have been otherwise. Decisions are ‘attempts at creating certainty’ but ‘they also create uncertainty by demonstrating that because the future has been chosen, it could be different’ (Ahrne & Brunsson 2011, p. 90).

The way the Nord Stream consortium used the TEA rules as a strategic instrument was ultimately to show that it was in line with established rules and standards. As there is no sovereign power centre that can be held accountable, the only answer a transnationalized world can come up with as a response to critique or questioned legitimacy is to produce more rules. An example of this can be seen in the response by the Espoo Convention Secretariat in the aftermath of the Espoo process for Nord Stream. The complex TEA process for Nord Stream raised issues that needed to be dealt with through further guidance on the application of the Espoo Convention that could take complex activities into consideration. In the list of ‘complex activities’, the Secretariat includes ‘Pipelines, roads or other linear infrastructure projects that are part of an energy or transport network crossing several Parties’ (ECE/MP 2009, p. 3).

In the note by the Espoo Convention Secretariat, it is further stated that complex activities ‘challenge the application of the Convention’ and that further guidance is needed, for example, on how to deal with strategic issues and the relation between SEA and EA procedures, as well as on ‘how public participation should be implemented in relation to complex activities’ (pp. 13–14). The new regulatory order means more rules, in terms of guidance, standards and best practice. As seen in the Nord Stream case, old established orders meet up with such new regulatory orders in ways that can benefit already far-reaching plans, rather than imposing rules that mitigate power relations or give more precedence to environmental values.

Conclusions: the relative power of transnational governance tools

We started this paper by stating that in a transnational world the conditions for environmental politics have changed. One apparent change is the continuous formulation and issuing of transnational rules; in the form of international conventions, standards and guidance for best practice. The organizations behind the formulation of such rules range from the UN to non-governmental and non-profit standardization organizations. The expansion of new regulations, issued by standard-setters and international governmental organizations, transgresses the boundaries of the old state territories and polities; as such, they create norms and ideals about how procedures and governance should look like that have the potential to spread worldwide. International conventions, standards and best practice rules on EA have spread successfully in this way.

One of the contributions of research using a neo-institutional framework is to show that when institutional frames are shaped as global blueprints and spread across national borders; they become an institutional context to which states and corporations all over the world need to adapt. The relative power of such global institutional contexts, however, can be attended to when we turn to the organizations and processes of organizing. So let us now revisit three conclusions based on using an organizational theory in analysing the case of the Nord Stream pipeline.

A first conclusion concerns the main actors involved – the formal organizations and the interdependencies between them. The founding of the Nord Stream consortium was preceded by several earlier organizing efforts in the Baltic Sea area. The idea of expanding the use of gas, and specifically by connecting to the Russian resources, was already institutionalized in the region. Interdependencies concerning gas import and export between the nation states involved had developed decades before the EA procedures started. Plans and decisions had been building up to the realization of the pipelines in continuous efforts to organize the coupling of gas grids across Europe and Russia since the 1960s. Rather than being a tool for taking greater considerations to the environment or opening the decision-making process for more participants, when the Espoo convention process was initiated it organized structured and materialized old geopolitical and economic relations in the region.

The second conclusion concerns the decisions made in the Espoo process as being part of ‘partial organization’, the active decisions that structure and order the process. The TEA proposal as it later was accepted, but not without protest, sets up boundaries between the Scandinavian and western EU states and the eastern EU states by avoiding land routes in the project. The Espoo process formalized the already established power relations by categorizing which organizations (i.e. states) would be recognized as having mandate in decisions on final approval as well as other issues during the TEA consultation. Organizing can be very forceful even when no new complete formal organization is initiated: the actors involved and their respective formal roles given within the TEA process were the result of active decision-making.

The third conclusion concerns the relation between decided orders and institutional order. The organizers of the Espoo process needed to relate to ideas that were already accepted as being part of good governance. One conclusion that can be drawn from our case is, however, that delivering a poor preliminary TEA actually enables the developer to show that it takes referral responses seriously, without having to respond to more strategic issues such as the need of environmental impact of the project as a whole. Institutional norms can thus becomeresources of already powerful organizations; in this case, Nord Stream was able to transform norms pertaining to science and democracy to resources that helped Nord Stream showing that the process was transparent, open and scientifically rigorous.

The new regulatory order means more rules, in terms of guidance, standards and best practice. As seen in the Nord Stream case, old established orders meet up with such new regulatory orders in ways that can benefit already far-reaching plans, rather than imposing rules that mitigate power relations or give more precedence to environmental values.

As we have argued, the regulative order that has gained quite a recognition in the transnational governance literature is, however, a consequence of new and shifting relations among old and new organizations and their attempts to organize their environment. By using the case of Nord Stream as an example, we have shown that in order to better understand this regulative explosion, one has to see the actual doings of the actors on an organizational level. The many new rules of various kinds are partly there to facilitate the communication and interaction among both new and old organizations acting on transnational level.

Nord Stream served as a book example of a governance case to illustrate the need for analytical balance between the rules (the institutions) and the actors (the organizations). We also recognized that governance research put emphasis on the importance of policy instruments, regulation, institutions, institutional forces and cultural frames, and Nord Stream can very much be seen as the play out of such instruments. But again, if the analysis is too near-sightedly focused on the process and its permeating norms, institutions (e.g. the TEA practice and its values) and regulations, one misses that the establishment of the Russian-German pipe lines is the result of governing and decisions through the interdependent relations of old and new organizations in the historically defined region of the Baltic Sea.

Notes

^1. Nord Stream is owned by five shareholders: Gazprom – owned by the Russian state (51% of the shares), Wintershall Holding GmbH (a BASF subsidiary, Germany, 15.5%), E. ON Ruhrgas AG (Germany 15.5%), N.V. NederlandseGasunie (Dutch 9%) and GDF SUEZ (France 9%). Nord Stream builds the pipelines and manages distribution, and Gazprom delivers the gas. Prior to the Nord Stream pipeline, Gazprom has also delivered gas to Europe through Poland and Ukraine