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UNCLOS, especially after its realpolitik redrafting, gives us an effective framework towards drafting a new Outer Space Treaty. Both treaties contain the concept of a lack of sovereignty and that resources of the deep sea and outer space are considered to be the common heritage of mankind. UNCLOS contains a detailed process by which a State or entity is granted limited access to hard-to-reach resources that can easily be adapted to the needs of outer space. The process that the drafters of UNCLOS underwent to gain global acceptance of the Convention shows us a way towards forming an internationally directed group, such as the ISA, to manage those resources that is perhaps less than entirely idealistic, but can gain the support of most, if not all, of the world’s nations.
When all is said and done, one can hardly consider an agreement that does not acknowledge the contributions of those nations at the forefront of space exploration and give them, or their corresponding corporations, every reassurance that resources garnered from space and returned to Earth can be traded freely in the world market for the benefit of all the nations of the world.
Eventually a compromise was formed that, understandably, recognized certain political and economic realities by giving more power to the wealthier nations and securing the rights of private and intellectual property over redistribution. The United States and Russia were given permanent seats on the Council without being specifically named.
An amendment to Article 161 of the Convention under Section Three of the Agreement’s Annex facilitates this permanent seat without actually naming the United States as its occupant: “The Council shall consist of . . . the State, on the date of entry into force of the Convention, having the largest economy in terms of gross domestic product.” Russia, another industrialized State, is virtually guaranteed a seat on the Council as well, by the requirement that chamber (a) include the “State from the Eastern European region having the largest economy in that region in terms of gross domestic product.”104
A Finance Committee was created, consisting of the five largest contributors to the ISA budget, which would effectively give these nations veto power over any of the Councils decisions.105 The Committee would remain in effect until the ISA became “cost- effective.”106 And a consensus of the Committee was required to approve “any decision by the Council or Assembly with budgetary implications.”107
But most importantly, the teeth of the Enterprise were effectively removed. The changes to the treaty in Annex III of UNCLOS regarding the rules of prospecting, exploration, and exploitation completely remove any obligation to freely share information or technology with the Enterprise.
“[Annex III] removes the requirement that parties contracting with the Authority agree to make methods and technology available to the Authority. The Agreement instead provides that the Authority may request cooperation from contracting parties.”108 It only requires it share those willingly, perhaps at a fair market price. “The Agreement also makes clear that contractors entering into joint venture agreements with the Enterprise are under no obligation to finance any part of the Enterprise’s mining operation.”109
With these changes. UNCLOS better reflects the political and economic realities of today’s world. Although these compromises might have put most of the ISA’s power in the hands of the developed world, they have also created an agreement the whole world can live with.
The good news is we need not start from scratch. There already exists a body of law that can be adapted, perhaps easily, to the needs of outer space. The U.N. Convention on the Law of the Sea (UNCLOS) has provisions for managing the traffic on the surface and the resources on the deep seabed.85 Space, like the sea, has vast amounts of area that is impractical for any one nation to claim.
Hugo Grotius, a pioneer of international law, preferred the term res extra commercium in referring to the open ocean. He proposed the “freedom of the seas” doctrine, whereby the ocean is insusceptible of ownership as it cannot be occupied, and no one has the “right to appropriate things which by nature may be used by everybody and are inexhaustible.”86
Being incapable of ownership and available for everyone’s use are the very same concepts expressed in Article I of the Outer Space Treaty that allow freedom of access and exploration and grant freedom of movement throughout. The Law of the Sea Treaty contains the very same concepts and almost the very same words to describe the territories of the deep seabed as are used in the Preamble and Article I of the Outer Space Treaty to describe space. UNCLOS also speaks to the resources of the sea being the common heritage of mankind, requiring “the equitable and efficient utilization of their resources.”87
[T]he area of the seabed and ocean floor and the subsoil thereof, beyond the limits of national jurisdiction, as well as its resources, are the common heritage of mankind, the exploration and exploitation of which shall be carried out for the benefit of mankind as a whole, irrespective of the geographical location of States.88
Jennifer Warren, vice president, technology policy and regulation at Lockheed Martin, discussed the com- pany’s history and interest in deep seabed exploration, which dates back more than 40 years. She said it has generated more than 80 patents and invested more than $500 million in exploration largely in the Clarion-Clipperton Zone that extends from Baja California to Hawaii.
“Recent developments in deep seabed resources have really sharpened our interest in seeing Law of the Sea ratified as soon as possible,” Warren said.
Lockheed, she said, has maintained its licenses to to explore and extract rare earth minerals, even as the market for minerals lagged. However, today, the demand has risen sharply for “rare earths,” as they are known, which produce valuable metals for flat-screen televisions, electric hybrid batteries, tank armor, night-vision goggles and cell phones.
Furthermore, Warren said, Lockheed’s claims now are the only current active U.S.-based claims. Last July, the first four licenses for deep seabed exploration were granted by the International Seabed Authority (ISA), the organization created by the Convention to recognize mining claims beyond the continental margin, and two of them are held by China and Russia, she said.
"The importance of these resources is well understood internationally,” Warren said, describing the need to be a party to the Law of the Sea Convention in order to be an active participant and have authorities in, for example, the rule-making process within the ISA. “Other countries are moving forward quickly and aggressively to access them. As the only U.S.-based claimant, our view is pretty straightforward. Business initiatives to exploit deep seabed mineral resources will only be able to secure the necessary financial investments if done pursuant to the existing international framework.”
John Ryan, chief legal officer at Level 3, underscored the company’s support for the U.S. accession to the Convention. Level 3 operates one of the largest Internet Protocol networks in the world, comprising fiber-optic cables entwined across the ocean floor to 45 countries — from North America, around Latin America, Europe, the Middle East, Africa and the Asia Pacific — or roughly 35,000 miles of sub-sea cable. To that end, he noted that the Internet continues to expand exponentially.
“The next 100 years are going to be about expanding our eyeballs around the world, and in order to do that, more subsea capacity needs to be deployed,” Ryan said.
He said Level 3 strongly supports U.S. accession for reasons that include the protection of international submarine cables; to expand the right to lay and maintain subsea cables; and to guarantee a meaningful dispute resolution process that relates to the operation and implementation of subsea cables.
“Any uncertainty in protecting the infrastructure puts the U.S. and U.S.-based companies at a competitive disadvantage relative to our competitors who are members of the Convention,” Ryan said. “And that uncertainty inhibits economic growth and investment.”
U.N. “Taxes”/Royalty Payments. Some have objected that the U.S. would be obligated to pay fees to the International Seabed Authority -- which some have inaccurately called “U.N. taxes” -- if the U.S. were to join the Convention and allow resource development on its extended continental shelf. Some have suggested that these fees could result in the loss of billions of dollars to the U.S. Treasury. The Bush Administration carefully considered these concerns and concluded that the licensing and fee structure established by the Convention was acceptable.
First, the fees are minimal in comparison to the enormous economic value that would be received, and the jobs that would be created, by the United States if its industry were to engage in oil, gas, and mineral development on the U.S. extended continental shelf in the Arctic. The U.S. would be required to make no payments for the first five years of production at any site, and then to pay a fee of one percent per year starting in year six, up to a maximum of seven percent in year twelve. Assuming the U.S. Government imposed, for example, a royalty fee of approximately 18 percent on the value of production on the U.S. extended continental shelf, that would be 18 percent more than the U.S. would gain if we stayed outside the Convention. In other words, joining the Convention would attract substantial investment, and produce substantial revenues for the Treasury, that would not otherwise be produced. So, even when the Convention payment is at its highest rate of 7 percent, the U.S. Treasury would still be 11 percent better off with respect to each production site than it would be if the U.S. does not join the Convention. This would be an enormous benefit -- not a loss -- to the U.S. budget.
Second, these fees would only have to be paid by the United States if there is actually production on the U.S. extended continental shelf.
Third, these fees were negotiated by U.S. negotiators in consultation with experts from the U.S. oil and gas industry, who deemed them to be acceptable.
Fourth, all of the western industrialized countries, including our major allies, as well as Russia and China, have concluded that these fees are acceptable and have joined the treaty. If these fees would actually cause the economic woes claimed by critics, then certainly these other countries would not have been willing to agree to pay them. Instead, most of these countries are already busily surveying and staking claims to their extended continental shelves so that their oil, gas, and mining companies can exploit these resources. For example, Norway -- which already has a sovereign wealth fund worth $700 billion, all of which has been derived from Arctic oil and gas profits -- is preparing to make a claim to the oil and gas on its extended continental shelf in the Arctic. Russia, Canada, and Denmark are all preparing to make similar claims in the Arctic using the provisions of the Convention, and they have agreed to pay royalties if they exploit the resources on their extended continental shelves.
Finally, royalty fees would not be paid to the United Nations. They would be paid through the International Seabed Authority, and back to the Parties to the Convention under a distribution formula developed by the Seabed Authority’s Council, where the U.S. would have a permanent seat and a decisive voice on how fees would be spent.
Finally, this accord will establish problematic precedents for “managing” other, no-less-strategically-important “international commons,” including Outer Space. A number of America’s adversaries have long sought to impose arms control or other treaty arrangements that could make it more difficult if not, as a practical matter, impossible for the United States to maintain the access to and control of space required by our national security interests. If this country joins LOST, it will invite these adversaries to adapt the Treaty’s International Seabed Authority as a prototype for determining permissible and impermissible activities in space – likely in ways that will prove inconsistent with the United States’ military and intelligence requirements.
LOST will allow interference with and the penalization of American businesses, including those that conduct research for, equip and provide logistical support to the U.S. military. It will: impose the “Precautionary Principle” (according to which innovations cannot be introduced unless proven free of any adverse consequences); give standing to Alien Torts claims in U.S. courts; require sharing proprietary information and technology with international bureaucrats and competitors; compromise WTO rights; and give precedence to European- dominated international standards. The costs of such derogations of our sovereignty could be high, perhaps even crippling, for affected businesses – including those supporting our armed forces.
The United States was able to play a role in the Commission’s non- acceptance of Russia’s first claim to the Arctic seabed back in 2001, even though it was not a party to LOST – and, therefore, not at risk of being bound by adverse Commission decisions. This episode demonstrates that, by remaining outside of the Treaty, America can retain its freedom of action (including the use of bilateral diplomacy and more constructive multilateral mechanisms, such as the Arctic Council) and still challenge such over-reaching Russian claims and win.
The Law of the Sea Treaty requires extensive transfers of data and technology – at least some of which could be highly detrimental to America’s industrial competitiveness (including in fields far removed from maritime-related activities) and to the national security. For example:
• LOST’s Article 266 mandates that states “cooperate in accordance with their capabilities to promote actively the development and transfer of marine science and marine technology on fair and reasonable terms and conditions” and “endeavor to foster favorable economic and legal conditions for the transfer of marine technology.”
• Article 268 requires states to “promote the acquisition, evaluation and dissemination of marine technological knowledge and facilitate access to such information and data.”
• Article 269 calls for parties to “establish programs of technical cooperation for the effective transfer of all kinds of marine technology to States which may need and request technical assistance.” (Emphasis added.)
• Compulsory dispute settlement mechanisms afford further opportunities to obtain sensitive technology and information. Article 6 of Annex VII requires that parties to a dispute “facilitate the work of the arbitral tribunal and...provide it with all relevant documents, facilities and information.” It can therefore be expected that countries may bring the United States or its businesses before arbitral tribunals – without expectation of a favorable result, solely for the purpose of obtaining sensitive technology information.
The object of these provisions is consistent with the socialist, redistributionist and one-world vision that animated many of LOST’s negotiators: No matter what the costs may be to U.S. security and business interests, the fruits of marine research, exploration and exploitation of “the Area” – the waters covered by the Treaty – and the associated technology must be shared with developing nations, land-locked states and “geographically challenged” countries.