The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea

Quicktabs: Citation

US should unsign 1994 agreement to resolve legal ambiguity over its actions

“Unsigning” the 1994 Agreement. When the Clinton Administration signed the 1994 Agreement in July 1994, it arguably obliged the United States to refrain from committing any act that would defeat the agreement’s “object and purpose,” even though the United States has ratified neither the agree- ment nor UNCLOS.94 The United States should therefore “unsign” the 1994 Agreement to resolve any legal ambiguity regarding U.S. intentions to explore and mine the deep seabed. In May 2002, the Administration of President George W. bush delivered a letter to the U.N. Secretary-General regarding the rome Statute of the International Criminal Court (ICC), which the Clinton Administration had signed in December 2000. The letter stated that the United States “does not intend to become a party” to the rome Statute and accordingly “has no legal obligations arising from its signature on December 31, 2000.”95 This “unsigning” of the Rome Statute made clear to the international community that the United States has no intention of joining the ICC, and it enabled the bush Administration to secure pledges from other nations that they would not surrender U.S. military personnel to the ICC for prosecution.96 Since securing such pledges would arguably defeat the object and pur- pose of the rome Statute, the unsigning letter was necessary to clarify that the U.S. no longer had an obligation to adhere to the terms of the rome Statute. The United States should unsign the 1994 Agreement to resolve any legal ambiguity regarding U.S. actions that may be seen as violating the agreement’s object and purpose. Since the United States never signed UNCLOS, it is unnecessary to unsign the convention.

[ Page 15-16 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
US companies could still mine deep seabed outside UNCLOS by going through foreign subsidiaries

U.S. companies may operate through foreign subsidiaries. If a U.S. company insists on engaging in mining only under the convention’s auspices despite the inequities associated with the UNCLOS regime, it may do so. Specifically, if the United States continues to remain a non-member of UNCLOS, a U.S. seabed mining company may incorporate a subsidiary entity in a country that is party to the convention. In this manner, the U.S. entity’s subsidiary may apply for an exploration contract under the sponsorship of the foreign country and engage in seabed mining through the convention’s regime.

The practice of U.S. companies partnering with foreign entities in seabed mining ventures has precedent. As previously noted, all four U.S. private-sector mining consortia originally included foreign partners or ownership interests: KCON had Canadian, Japanese, and british interests; OmA had belgian and Italian interests; OmI had Canadian, Japanese, and German interests; and OmCO had Dutch interests.90

[ Page 14 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
Actual royalty rate has yet to be determined, leaving US companies vulnerable to exorbitant costs
Royalty rate “To Be determined.” Neither the convention nor the 1994 Agreement establishes the mining royalties that U.S. companies would be required to pay to the Authority. As originally drafted, the convention required mining companies to pay a “production charge” royalty ranging from 5 percent to 12 percent of the value of the processed metals. In the alternative, companies could pay a combi- nation of a production charge and a share of the net proceeds from the sale of the processed metals.70 In any event, each company must pay the Authority a minimum of $1 million per year once commercial produc- tion has commenced.71 The 1994 Agreement revised the convention’s specific royalty range and minimum payment scheme,72 but the 1994 revisions left more questions than answers. essentially, the 1994 Agreement left the seabed mining compensation scheme “to be determined” with the notion that the details would be negotiated within the Authority at some future date when commercial production is imminent. That date has not yet arrived, even though UNCLOS was adopted 30 years ago, and the Authority has yet to begin drafting regulations to establish the financial obligations of mining companies to the Authority. Thus, if the U.S. accedes to the convention, it will be making an uninformed decision based on incomplete information. The 1994 Agreement refers only to a vague “system of payments” that U.S. mining companies would be required to pay to the Authority, stating that “Consideration should be given to the adoption of a royalty system or a combination of a royalty and profit- sharing system.”73
[ Page 11 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
The United States' permanent seat on ISA does not amount for much without veto power
Proponents of U.S. membership in UNCLOS claim that, if the United States joins the convention, it will have the power to prevent adverse decisions against U.S. companies because the U.S. will hold a permanent seat on the Council.67 Yet a permanent seat is of questionable utility because the United States would have only one vote on the Council, and none of the aforementioned decisions requires consensus.68 For example, the Council may deny an application for an exploration license submitted by a U.S. company, even over the recommendation of the Legal and Technical Commission, if two-thirds of the Council objects to the application.69 Granting an international organization the power to restrict and regulate U.S. access to polymetallic nodules and sulfides, cobalt-rich crusts, and rare earths will not advance U.S. national interests. Joining UNCLOS, however, would do just that by placing the interests and operations of U.S. mining companies at the discretion and control of the Authority and the Council.
[ Page 12 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
If US accedes to UNCLOS, mining companies would have to abide by burdensome regulations

Burdensome Environmental Regulations. If the United States joins UNCLOS, U.S. companies engaging in seabed exploration will be subject to a rigorous environmental regime administered by the Authority. The Authority has the power to adopt “rules, regulations and procedures” for the protection of the marine environment, with “particular attention being paid” to harm caused by drilling, dredging, and excavation.46 One regulation requires companies to apply a “precautionary approach” in regard to the marine environment “as reflected in principle 15 of the Rio Declaration.”47 This is notable, given that neither UNCLOS nor the 1994 Agreement even mentions the controversial “precautionary approach”—a principle that requires absolute scientific certainty that an action will not cause environmental harm.

U.S. companies would be required to establish an environmental “baseline” at the outset of their contracts and continually monitor and report the impact of their activities on the marine environment.48 To establish a baseline, U.S. companies would be required to collect data “on the sea- floor communities specifically relat- ing to megafauna, macrofauna, meiofauna, microfauna, nodule fauna and demersal scavengers” (bottom feed- ers) and “record sightings of marine mammals, identifying the relevant species and behavior.”49 before engaging even in preliminary testing activities, companies would have to submit a site-specific environmental impact statement to the Authority, as well as a contingency plan to respond to environmental incidents.50

[ Page 10 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
US accession to UNCLOS would place mining interests directly under regulatory regime of the Authority
If the United States accedes to UNCLOS, American companies will be required to adhere to all the Authority’s rules, regulations, and dictates. In matters concerning deep seabed mining, UNCLOS leaves no doubt where the power lies. The convention states that all activities in the seabed “shall be organized, carried out and controlled by the Authority on behalf of mankind as a whole” and that the Authority “shall have the right to take at any time any measures...to ensure compliance with its provisions and the exercise of the functions of control and regu- lation assigned to it thereunder or under any contract.”35 The Authority has exercised these general grants of power in a number of specific ways, notably by creating the “mining Code,” a “comprehensive set of rules, regulations and pro- cedures issued by the International Seabed Authority to regulate prospecting, exploration and exploitation of marine minerals in the international seabed Area.”36 Among the regulations thus far enacted by the Authority are the procedures regarding exploration for polymetallic nodules.37 These regulations, when read in conjunction with the Authority’s standard clauses for exploration contracts38 and the Legal and Technical Commission’s environmental regulations,39 create a regulatory regime without precedent in international law. If the United States accedes to UNCLOS, U.S. seabed mining companies will be subject to that regime.
[ Page 9 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
US has already negotiated bilateral agreements with all nations adjoining its claims in the CCZ

In sum, the United States has agreements with almost every nation that the Authority has licensed to explore the CCZ (belgium, China, France, Germany, Japan, russia, and the United Kingdom), all of which remain in force and effect at the present day.29 Those nations have made a commitment to the United States that they will not interfere with or infringe on the claims by the United States or its companies in the CCZ. None of the nations has denounced or withdrawn from the agreements or has otherwise indicated that it does not respect its international commitments to recognize U.S. claims in the CCZ.

Among the nations that have sponsored claimants in the CCZ, only four—Nauru, Kiribati, South Korea, and Tonga—are not party to a seabed agreement with the United States. The U.S. should remedy this by nego- tiating memoranda of understanding with those nations along the same lines as the 1991 agreements with China and the Soviet Union. Although the claims of Nauru, Kiribati, South Korea, and Tonga do not overlap the areas currently claimed by the United States, the agreements would establish a bilateral commitment from each of those nations not to infringe on U.S. claims in the CCZ and to cooperate in the event of a dispute.

[ Page 6 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]
Under 1980 DSMHRA Act, US citizens and corporations are fee to mine deep seabed regardless of whether US is party to UNCLOS

Indeed, this was the U.S. position prior to UNCLOS III. Years earlier, Congress made clear the U.S. position on the legality of deep seabed mining in the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA):

[I]t is the legal opinion of the United States that exploration for and commercial recovery of hard mineral resources of the deep seabed are freedoms of the high seas subject to a duty of reason- able regard to the interests of other states in their exercise of those and other freedoms recognized by general principles of international law.10

The U.S. position set forth in 1980 in DSHMRA and again in 1983 at UNCLOS III remains the same today. According to the Restatement of the Law, Third, of the Foreign Relations Law of the United States, U.S. citizens and corporations may engage in seabed mining regardless of whether the U.S. accedes to UNCLOS, provided that they conduct such mining without claiming sovereignty over any part of the seabed and as long as the mining activities are exercised with due regard to the rights of other nations engaged in mining.11 As related by the Restatement, “like the fish of the high seas the minerals of the deep sea-bed are open to anyone to take.”12

[ Page 3 ]
Groves, Steven. The U.S. Can Mine the Deep Seabed Without Joining the U.N. Convention on the Law of the Sea . Heritage Foundation: Washington, D.C., December 04, 2012 (18p). [ More (8 quotes) ]