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One of the ISA’s key functions is to redistribute royalties generated from resource production on the outer continental shelf to other countries. Treaty opponents have suggested the ISA could agree to a distribution formula that would pay out royalties to U.S. enemies.
True, the treaty does contain revenue-sharing provisions. Companies are allowed to operate royalty free for the first five years of production, then are subject to payments to the ISA of 1 percent of production value beginning in year six and increasing 1 percent per year after that, maxing out at 7 percent in year 12. But this is where opponents’ trumped-up fears about paying terrorists parts ways with reality.
As Secretary Clinton pointed out at the Foreign Relations Committee hearing, the treaty specifically provides the United States with a permanent seat on the ISA council, a key decision-making body, effectively giving us veto power over how distribution would occur.
Yes, as the Heritage Foundation reports, final decisions would be made by the ISA’s general assembly. But the assembly would only be voting on policies the council recommended unanimously, meaning we could block any proposal from even getting to a vote at the general assembly. This de facto veto power means the United States would always be able to prevent royalties from being distributed to countries we have designated as state sponsors of terrorism.
To put this in terms treaty opponents can better understand, it would be as if every senator on the Foreign Relations Committee had to approve the Law of the Sea treaty before it could be considered by the full Senate for ratification. Under those circumstances, would the treaty ever see a ratification vote?
Ask Sen. Risch. Then think about how likely it would be for the United States to approve a payment formula that would send cash to Somalia or the Palestine Liberation Organization. It’s just not going to happen.
And it’s not just about oil and gas. Rare-earth metals are compounds integral to the production of modern devices including cell phones, hybrid cars, and even precision-guided missile systems. Currently more than 95 percent of rare-earth metals are produced in China, which has begun restricting its export.
But nodules found on the deep seabed—well outside even extended continental shelves—have “economically significant” amounts of rare-earth metals, and Lockheed Martin and other companies would like to begin exploration to determine the viability of tapping this source. Access to these areas that are beyond any national claim of jurisdiction will have to be regulated by an international body—in this case, the ISA—which explains Lockheed Martin’s support for U.S. ratification of the Law of the Sea.
The United States has a clear choice: Agree to limited revenue sharing under the treaty and bankroll more than 93 percent of total revenue from extended continental shelf and high seas activities, or get nothing at all and lose the ability to challenge claims made by other nations.
Until we ratify the treaty, no U.S. companies will operate on the extended continental shelf. Aside from a small pocket of territory in the western Gulf of Mexico where we have bilaterally negotiated a boundary with Mexico, companies cannot be granted the certainty that leases of these regions would not be challenged in international courts.
Without becoming party to the treaty and gaining a seat at the negotiating table where decisions are made about how to partition out extended-shelf claims, we will be unable to assure industries that the international community will recognize a U.S. lease. Businesses, even those with extremely deep pockets such as Big Oil and Lockheed Martin, have been very clear: If we don’t ratify, they won’t operate. Companies want to create those jobs, generate revenue, and increase domestic production. But no certainty means no investment. No treaty means no security, no jobs, no dollars, no resources. It’s that simple.
By the continual erosion of our nation's oceans leadership, badly needed American jobs are lost. The consequences are also serious as to how we are viewed by other nations. When the United States achieves everything it requires in a Convention, including a tough revision meeting all of its objectives, not to adhere makes it more difficult for America to negotiate other agreements. Our friends are simply astounded that the nation which achieved more than any other through the Convention has still not joined. They conclude from the flimsy arguments they hear against the Convention that America has simply gone isolationist. As such, our non-adherence continues to harm United States credibility and leadership in oceans matters and, more broadly, in our foreign policy. It is past time for Senate Advice and Consent.
The critics seem naively to believe that America can simply shoot its way around the oceans, apparently including shooting our NATO allies, such as Canada, with whom we disagree about Arctic straits. Most shamefully, the critics repeat, despite all correction, that the Convention would turn the oceans over to the United Nations. But to the contrary, in its 200 nautical mile economic zones and extended coastal state continental shelves the Convention embodies one of the greatest expansions of national jurisdiction in history and absolutely nothing is turned over to the United Nations. Moreover, the closely cabined International Seabed Authority (ISA), necessary to create bankable property rights for seabed mining, only has jurisdiction over mineral resources of the seafloor in areas beyond national jurisdiction. Far from a menacing international agency poised to take over the world, after a quarter-century of operation the ISA has a staff of 39, considerably smaller than the staff of at least one of the domestic organizations most visibly opposing the Convention. The ISA is simply a small garden variety specialized international agency similar to many in which the United States participates, for example the Great Lakes Fisheries Commission. Even were the critics correct, United States non-adherence to the Convention would not in the slightest end the ISA or change the Convention which is one of the most widely adhered to in the world.
If adherence to the Convention made no difference perhaps this would simply be another lesson that strident political debate can sometimes harm the nation, as with the isolationist rhetoric of the America First Movement before World War II. But sadly the over quarter-century of United States non-adherence is severely harming the Nation. On a daily basis adversaries such as Iran use American non-adherence to assert that our Navy does not enjoy the protections of the Convention. China uses our non-party status to challenge our naval presence in the South China Sea and the Yellow Sea. We are unable to participate fully in the most important institutions for engaging on oceans law today, such as the annual meeting of States Parties to the Convention and the Commission on the Limits of the Continental Shelf. By not taking our seat on the Council of the ISA we lose our veto over any distributions. By not adhering we also lose our ability to block potentially damaging amendments to the Convention.
Our economy is hurt when delimitation of our extended continental shelf is delayed and when legal uncertainties from non-membership prevent our oil and gas industry from exploiting the rich continental margin, especially in the Arctic. Development of resources in the Chukchi and Beaufort Seas off Alaska's coast would create approximately 54,700 jobs per year nationwide with a $145 billion payroll and would generate $193 billion in federal, state and local revenue according to a study done by the University of Alaska's Institute of Social and Economic Research.
The delay in ratifying this treaty has already cost the loss of one of our four seabed mine sites, the richest in the world, and if we do not soon adhere the United States risks losing the remaining three, with billions in the strategic minerals manganese, copper, cobalt and nickel at stake. A single seabed mining operation would spur the economy with total capital purchases of close to one and a half billion dollars and would stimulate robust job creation. Further, for our nation to lose this new industry would cost millions in consumer losses and foregone tax revenues and billions in our balance of trade as the United States was forced to import rather than produce these strategic minerals.
Undersea cables carry more than 95% of international Internet and telephonic transmissions. These crucial cables also transmit financial data and transactions worth trillions every day. The Convention establishes the legal underpinning for protecting and managing these cables. At a National Press Club event a spokesman for AT&T warned that not being a party places America's crucial communication links at risk.
While I agree completely with Cartner and Gold "Commentary in Reply to “Is it Time for the United States to Join the Law of the Sea Convention”." Journal of Maritime Law & Commerce. Vol. 42, No. 1 (January 2011): 49-70. [ More (6 quotes) ] that UNCLOS “reduces uncertainty and confusion for all states parties” claiming an extended continental shelf, the United States must be prepared to act unilaterally if the Senate does not give advice and consent in the near future. Clearly, as indicated in the NWC Global Shipping Game report, accession to UNCLOS would provide greater certainty and predictability “of the future security and political environment that industry desires in order to invest in economic development of the Arctic region.” However, even without U.S. accession, if there is money to be made, U.S. industry will invest in the region if the U.S. Navy is there to guarantee and protect access. Therefore, while unilateral action may not be the “best” option, it remains a viable (and perhaps the only) option and we should not undercut our ability to claim an extended continental shelf based on the 1958 Continental Shelf Convention by allowing Administration officials to incorrectly state that the United States can only claim an extended continental shelf if we join UNCLOS. Fortunately, not all Administration officials are misinformed on the law. While recognizing the importance of UNCLOS, Margaret Hayes, the chair of the Department of State Extended Continental Shelf Interagency Task Force, acknowledged that “the existence of an extended continental shelf does not depend on a coastal nation having joined the convention” and “that there are other ways to establish what the outer limits might be (emphasis added).”
Moreover, what state is going to complain if the United States claims an extended continental shelf in the Arctic – certainly not any of our Arctic neighbors? We have an existing maritime boundary with the Russian Federation in the North Pacific Ocean, the Bering and Chukchi Seas, and the Arctic Ocean, which is being provisionally applied through an exchange of diplomatic notes pending ratification by the Russian Duma.14 And talks are ongoing to resolve our long-standing but rather small maritime dispute with Canada in the Beaufort Sea. In May 2010, the Canadian Minister of Foreign Affairs sent a clear message to Washington to begin serious discussion on the issue, indicating that there was no reason why Canada and the United States could not resolve the ongoing boundary dispute “as economic partners and best friends, sharing the longest border in the world.”15 Talks to resolve the dispute began in July 2010.16 More importantly, a careful read of the 2002 USGS Arctic report notes that the overwhelming majority of likely oil and gas reserves in the Arctic are located on land, in the 12 nm territorial sea or within the 200 nm EEZ of one of the littoral nations. Most of the Arctic oil and gas reserves are in areas under U.S. and Russian control, respectively. And a strong Navy is the best insurance to keep “outside bidders” like China from infringing on our right to exploit the natural resources on the U.S. extended continental shelf.
UNCLOS proponents have also recently argued that it is imperative that the United States join the Convention before it is amended by the states parties. Failure to do so, they argue, may later force the United States to accept a modified Convention “as is” with amendments that are contrary to U.S. interests.17 Such an argument is untenable at best and ignores a plain reading of Article 316 of the Convention, which provides in part:
4. A State which becomes a Party to this Convention after the entry into force of an amendment . . . shall, failing an expression of a different intention by that State: (a) be considered as a Party to this Convention as so amended; and (b) be considered as a Party to the unamended Convention in relation to any State Party not bound by the amendment (emphasis added).
In other words, if the United State were to accede to UNCLOS after an unfavorable amendment had entered into force, Washington could simply indicate that the United States would not be bound by that amendment. Such efforts to sensationalize the importance of joining UNCLOS by making incorrect statements of the law not only detract from the debate but also significantly undercut the legitimacy of the need to accede to the Convention.