Bilateral Treaties
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Additionally, entering into a treaty with other countries in which each country would recognize each other’s claim relating to deep seabed development would be of dubious legal validity. Article 137(3) of the Convention provides that “no state or natural or judicial person shall claim, acquire or exercise rights with respect to the minerals recovered from the Area except in accordance with this part. Otherwise, no such claim, acquisition or exercise of such rights shall be recognized.”133 Thus, entering into a treaty with other Arctic nations which have ratified the Convention and upon which the Convention is binding would not assure the United States access to mineral resources beneath the Arctic Ocean.134
Much of the supposed distress voiced by UNCLOS proponents stems from Russia’s 2001 submission to the CLCS, in which Russia laid claim to a vast area of Arctic ECS. The proponents incorrectly imply that Russia’s claim will result in the loss of Arctic resources that rightfully belong to the United States. According to Senator Lisa Murkowski (R–AK), for example:
[I]f we do not become a party to the treaty, our opportunity to make [a claim to the CLCS] and have the international community respect it diminishes considerably, as does our ability to prevent claims like Russia’s from coming into fruition. Not only is this a negligent forfeiture of valuable oil, gas and mineral deposits, but also the ability to perform critical scientific research.30
However, Russia’s 2001 submission to the CLCS in no way overlaps or infringes on potential areas of U.S. ECS in the Arctic. To the contrary, Russia’s claim adheres to a boundary line that the United States and the USSR agreed upon in a 1990 treaty.31 Specifically, Russia’s submission to the CLCS divides its claimed conti- nental shelf and ECS from the U.S. shelf along an agreed boundary line that extends from the Bering Strait northward into the Arctic Ocean.
In any case, it would have been quite simple to build an alternative to the LOST. In 1980 Congress passed the Deep Seabed Hard Minerals Act to provide interim protection for American miners until Congress ratified an acceptable LOST. The act could simply be amended to create a permanent process for recording seabed claims and resolving con- flicts. Such legislation could then be coordinated with that of the other leading industrialized states. In September 1982 Britain, France, Germany, and the United States signed the Reciprocating States Agreement to provide for arbitration of competing claims. Such an informal system could have been upgraded into a formal treaty, authorizing each nation to oversee its own companies’ activities and creating a mechanism for resolving conflicts. No international bureaucracy would have been necessary.
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.
In conclusion, these interactions and potential conflicts in the regime applicable to submarine cables regime make further ground arise for the integrated planning and management of activities in ocean and coastal areas.
The scholarship has repeatedly affirmed that such a cooperation and integration of different interests would be best achieved by means of the elaboration of a new international convention. However, it has to be pointed out that disruptions to the integrity of submarine cable systems potentially cost cable companies millions of dollars in repairs and lost revenues from e- commerce and telecommunications.29 In this perspective, rather then spending efforts to negotiate a new Convention on submarine cables, a solution – at least a partial one – can be represented by increasing the cooperation between all actors involved (privates and States) by means of BITs. This would help minimizing the risks of interferences and protect the interests of all the parties involved. As South-East Asia currently represents the most-relevant market for the lay of submarine cables, particular attention in the following analysis will be given to the BITs practice in the region.
The inadequacy of the regime provided by the law of the sea to effectively protect submarine cables, the relevance of which in national economies increases as time goes by, is hardly questionable. The UNCLOS, in particular, is a ‘constitutional’ convention, one that needs other instruments to be put in place in order to ensure the effectiveness of most of its provisions. As stated beforehand, BITs can provide only a partial solution to the problem – in other words, they can represent a solution only in those areas where coastal States exercise their sovereignty. In the high seas and in those areas where the sovereignty of a State is limited by the rights and duties of other States, BITs clearly cannot be a suitable solution. However, BITs and investment law in general can nonetheless represent a model worth following to fill the remaining lacunae of the law of the sea in the regime applicable to submarine cables. The lesson to be learned from investment law is that the multilateral approach is not necessarily the most appropriate. In investment law, the bilateral approach has been proven as successful as it allows each State to pursue their interest at the local level by negotiating the level of protection they deem appropriate in a particular State or region for their nationals. BITs could be a suitable instrument to reach effective and constant protection for submarine cables. Alternatively, bilateral or small multilateral treaties could help to solve once and for all the problem of the current inadequacy of the law of the sea in terms of protection of submarine cables.
The Western Gap agreement has clear implications for the Arctic, where the United States shares a potential extended continental shelf with both Russia and Canada. UNCLOS opponents suggest that questions regarding international legal title to the U.S. potential extended continental shelf in the Arctic will be resolved conclusively when the United States enters bilateral agreements with Russian and Canada respectively.156 As simple and therefore attractive as this position may be, it begs several questions.
Under what legal authority would the Arctic neighbors have the right to divide and claim for themselves an area lying, at least in theory, beyond their respective national jurisdictions? Even assuming a legitimate legal basis to claim their extended continental shelves and delimit them bilaterally, what basis would the states have for desiring to and concluding their agreements outside the UNCLOS framework, including ignoring Article 82 royalty payments? Finally, even if Russia and Canada— both UNCLOS member states—choose to comply with UNCLOS on their respective sides of delimited shelves, might they object to the United States not doing so on its side, and, if so, would they pursue their objections? And how might the outer limits of the U.S. extended continental shelf in the Arctic be determined given the geographic differences from the Western Gap situation where there were only two geographically opposite states with no third state or area interests involved?
The simple answer is that only by acceding to the convention can the United States obtain its full continental shelf rights in the Arctic.
Can Resources Be Developed without LOST? The first argument — that LOST will advance the development of the seabed — is outlined in a letter from the U.S. Chamber of Commerce, sent to the U.S. Senate in July 2012:
“America’s extended continental shelf, which in some areas extends hundreds of miles beyond U.S. territorial waters, contains abundant oil and natural gas reserves that can provide reliable, affordable energy to America’s homes and factories for decades to come — but only if the Senate acts to approve Law of the Sea. Likewise, by joining the Convention, U.S. companies would gain exclusive access to abundant rare earth mineral resources that are essential to high-tech manufacturing. China currently controls 90 percent of the world supply of rare earth minerals. Law of the Sea represents America’s best opportunity to take control of its own resource destiny. No U.S. company will make the multi-billion- dollar investments required to recover these resources without the legal certainty the Convention provides.”30
This argument is demonstrably false. U.S. companies are already successfully investing in an area of the extended continental shelf — the “western gap” in the Gulf of Mexico.31 There are two areas of submerged continental shelf in the Gulf, outside the Exclusive Economic Zones of both the United States and Mexico, known as the Western Gap and the Eastern Gap. The Eastern Gap shares a nautical boundary with Cuba, and its precise boundaries have not been negotiated. The boundaries of the Western Gap, however, were defined by a treaty signed with Mexico in June 2000.
This bilateral treaty has allowed both nations to proceed with confidence in developing the extended continental shelf in the Western Gap. No objections have been raised to the bilateral treaty and none are expected. As a result, the U.S. Bureau of Ocean Energy Management has sold development rights in the Western Gap in several auctions since the treaty was ratified in 2001.
What of the Arctic? A 2011 Bloomberg BusinessWeek editorial argued:
“The U.S. continental shelf off Alaska extends more than 600 miles into the Arctic Ocean. American companies have been reluctant to invest in exploiting this underwater terrain, which contains vast untapped reserves of oil and natural gas. That’s because the U.S., as a nonparticipant in the sea convention, has no standing to defend its ownership of any treasures that are found there.”32
Yet this is exactly the same case as in the Gulf of Mexico. Only three nations contest the ownership of resources in the extended North American continental shelf in the Arctic: the United States, Canada and Russia. American relations with Canada are friendly; therefore, a United States-Mexico-style treaty with Canada demarcating appropriate lines north of Alaska should be relatively easy to achieve. Russia might be perceived as a more intractable problem; but a 1990 treaty between the United States and the Soviet Union defines the maritime boundary between the two powers.33
Under the Treaty, Russia has claimed vast areas beneath the Arctic Ocean, but these claims in no way infringe upon the 1990 Treaty. Actually, they are a challenge to Canada rather than the United States. South of the Arctic Ocean, the treaty line protects U.S. claims to large areas of extended continental shelf in the Bering Sea and in the Pacific Ocean southwest of the Alaskan Aleutian Islands. Accordingly, there is no barrier (barring the low one of a necessity to negotiate a treaty with Canada) to the United States developing the extended continental shelf in the Arctic and its environs in the same way it has in the Western Gap.
The major remaining U.S. ECS boundary to be determined in the Arctic is shared by the United States and Canada. As was the case with Russia, the U.S. and Canada have approached the demarcation of this boundary cooperatively. The two nations have a mutual interest in determining the extent of their respective continental shelves and identifying their respective areas of ECS.
To that end, the U.S. and Canada have conducted a series of joint scientific operations in the Arctic to collect bathymetric and seismic data to map the continental shelf.40 These data will enable the United States and Canada to negotiate a bilateral treaty delimiting their respective continental shelves and areas of ECS in the Arctic Ocean in the same manner as the U.S. and Mexico did in the Gulf of Mexico. United States need not join the convention to demarcate areas of its Arctic EEZ and ECS, secure jurisdiction and control over these areas, and develop the hydrocarbon resources in these areas. Such demarcation has been and will continue to be conducted in cooperation with neighboring Arctic nations regardless of whether the U.S. is a UNCLOS member.
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The U.S. does not need to ratify UNCLOS to protect the interests of its underseas cable industry. Submarine cables are already protected under existing international law and any gaps in this law can be resolved by implementing bilateral treaties with states as needed.
Bilateral arrangements between states over ECS claims are not a viable alternative to the existing UNCLOS regime. The comprehensive international UNCLOS regime was proposed in the first place as a way of reducing the transaction costs of formulating all of these bilateral treaties. Additionally, they would have dubious legal validity, especially in regions like the Arctic where all other nations besides the U.S. have already ratified the treaty.
- US attempts at bilateral diplomacy only complicating disputes, should agree to international framework of UNCLOS
- Bilateral treaties are not a sufficient substitute for UNCLOS regime in settling Arctic disputes
- Bilateral agreements over seabed jurisdiction would be abrogated by UNCLOS framework
- Joint ventures with signatory nations not an acceptable alternative because U.S. companies would be bound by treaty without accruing its benefits
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