Evidence: Most Popular
Lockheed Martin, the only U.S. company with active claims to deep seabed sites under a U.S. law predating the Law of the Sea Convention, recently wrote to this Committee urging the Senate to approve the Convention. Lockheed has invested hundreds of millions of dollars on research and development related to deep seabed mining over the past 40 years. The company’s letter made clear that the multibillion dollar investments now required to launch an ocean-based resource development business will only occur if it can obtain the security of tenure and clear legal rights offered under the Convention. With Lockheed and potentially other U.S. companies poised to expand their operations and create new jobs, Senate accession to this treaty would allow investor dollars to stay here.
Equally important to U.S. companies contemplating deep seabed mining activities is U.S. leadership in the ISA. The next several years will be formative for the nascent deep seabed mining industry. As I mentioned earlier, the Convention’s deep seabed mining regime was overhauled in 1994, resulting in a system that is uniquely favorable to American interests. Those reforms included a permanent U.S. seat on the Council of the ISA. But the U.S. has not assumed that seat, and cannot guide the development of new rules pertinent to deep seabed mining activities while outside the Convention.
The Convention guarantees rights of innocent passage through territorial seas, transit passage through straits and archipelagoes, and freedom of all vessels on the high seas. Seafaring vessels, such as container ships, crude oil tankers, and bulk carriers, carry over 95 percent of all goods imported to or exported from the United States. Guaranteeing their free movement is both an economic and a national security concern, as these ships transport the majority of this country’s oil and other crucial commodities and goods.
The Convention’s detractors argue that U.S. ships can rely on customary international law to ensure their mobility. But customary international law is not well- suited to the needs of business. By definition, it is hard to find and apply customary law because it does not exist in one place. Its rules can and will shift over time. Shipping companies benefit from a set of stable, written rules that they can easily reference during a dispute. The Law of the Sea Convention serves this function by codifying key navigational rights in a single, central authority.
Submarine cables represent critical communications infrastructure, as they form the backbone of the Internet and global e-commerce. Such cables, typically consisting of optical fibers laid along the ocean floor in a bundle no larger than a garden hose, carry over 95 percent of transoceanic voice and data communication. U.S. telecom companies have worked rapidly to meet exploding consumer appetite for data, increasing the total circuit capacity of transoceanic cables landing in the U.S. by more than 1,000 fold since 1995.
There is no substitute for these underwater cables in case of damage. The earth’s satellites can carry no more than seven percent of U.S. international voice and data traffic. But worldwide, nearly 100 cable outages occur each year. The vast majority of cable outages are caused by bottom trawling fishing, dredging, and ship anchoring. Occasionally, cables are taken in an act of piracy, as occurred in 2007 when individuals in commercial vessels from Vietnam stole over 100 miles of cables on the high seas. Cable outages may disrupt governments, financial markets, and business operations and require costly repairs.
Offshore operations are capital-intensive, requiring significant financing and insurance. Oil and natural gas companies do not want to undertake these massive expenditures if their lease sites may be subject to territorial dispute. They operate transnationally, and need to know that the title to the petroleum resources will be respected worldwide and not just in the United States. Availability of clear legal title is crucial to realizing the potential of U.S. offshore areas both now and in the future, as drilling technology continues to advance and make new projects feasible. As ExxonMobil emphasized in its recent letter to this Committee, before it undertakes the immense investments required to explore and develop resources beyond 200 miles, “legal certainty in the property rights being explored and developed is essential.”
Currently, undersea cables are protected by the following international treaties: the International Convention for Protection of Submarine Cables of 1884, the Geneva Convention of the Continental Shelf, and the Geneva Convention on the High Seas are separate but, both ratified in 1958, and the U.N. Convention on the Law of the Sea (UNCLOS) of 1982. The 1958 Geneva Convention incorporates earlier treaties regarding the laying and repair of cables on the high seas. The U.S. has signed, but not ratified UNCLOS, which entered into force in 1994 and currently has 153 nations as parties.57
The 2010 ROGUCCI report highlighted an important item regarding UNCLOS in that some coastal nations do not comply or have failed to enact legislation that enforces the protection of undersea cables.62 Notwithstanding concerns raised about UNCLOS, the U.S. Congress has not ratified UNCLOS, even after a strong showing before the Senate Committee on Foreign Relations (SCFR) in 2007 pertaining to the 1994 UNCLOS Ratification Agreement. The testimony of Douglas Burnett"Statement of Douglas R. Burnett: On Accession to the United Nations Convention on the Law of the Sea and Ratification of the 1994 Agreement regarding Part XI of the Convention ." Testimony before the Senate Foreign Relations Committee, October 4, 2007. [ More (7 quotes) ] before the SCFR speaks to the conclusion: “It would be in the best interest of the U.S. to ratify this treaty because the U.S. telecom and power companies, the U.S. Navy and scientists, can seek the assistance of the U.S. government to enforce the rights of cable owners to lay, repair, and maintain cables outside of territorial seas and to prevent these rights from being diminished without U.S. involvement.63"Statement of Douglas R. Burnett: On Accession to the United Nations Convention on the Law of the Sea and Ratification of the 1994 Agreement regarding Part XI of the Convention ." Testimony before the Senate Foreign Relations Committee, October 4, 2007. [ More (7 quotes) ]” Currently, a vote of the entire U.S. Senate has yet to be scheduled. Without passing this legislation, the U.S. can only resort to the 1884 Convention rules on telegraph cables in the event it seeks to enforce cable protection.64
Undersea cables are a valuable commodity in the 21st century global communication environment. The undersea consortium is owned by various international companies such as ATT, and these companies provide high-speed broadband connectivity and capacity for large geographic areas that are important entities of trade and communications around the globe.41 For example, the U.S. Clearing House Interbank Payment System processes in excess of $1 trillion a day for investment companies, securities and commodities exchange organizations, banks, and other financial institutions from more than 22 countries.42 The majority of their transactions are transmitted via undersea cables. In addition, the Department of Defense’s (DoD’s) net-centric warfare and Global Information Grid rely on the same undersea cables that service the information and economic spheres.43 If undersea cables were cut or disrupted outside of the U.S. territorial waters, even for a few hours, the capability of modern U.S warfare that encompasses battle space communications and awareness, protection, and the stability of the financial networks would be at risk. As one analyst has noted, “the increase demand is being driven primarily from data traffic that is becoming an integral part of the everyday telecommunications infrastructure and has no boundaries.44
Destruction of submarine cables can cripple the world economy to include the global financial market and/or Department of Defense (DoD). An example which reflects the importance of this strategic communication capability took place on December 26, 2006, when a powerful earthquake off Southern Taiwan cut 9 cables and took 11 repair ships 49 days to restore. The earthquake affected Internet links, financial markets, banking, airline bookings and general communications in China, Hong Kong, India, Singapore, Taiwan, Japan and the Philippines.7 When a cable loses service, it has a definite, but difficult impact to the global financial sector. The International Cable Protection Committee (ICPC) legal advisor estimates that interruptions of underwater fiber optics communications systems have a financial impact excess of $1.5 million per hour.8 These estimates target operators that utilize cable bandwidth for day-to-day operations and companies or government entities that own bandwidth on the disrupted cable.9
Douglas Burnett, a legal expert on undersea cables notes that international banking institutions process over $ 1 trillion dollars per day via undersea cables. Any disruptions of these cables would severely impact global banking. Indeed, Stephen Malphrus, Chief of Staff to Federal Reserve Chairman Ben Bernanke, recently noted, “When communication networks go down, the financial services sector does not grind to a halt, rather it snaps to a halt.6 Even though there are hundreds of cables crossing the global seabed, there are just not enough undersea communication network redundancies available to handle the vast amount of bandwidth needed to keep global banking transactions in check.