Revision of Revenue sharing agreements in UNCLOS are not a reason to reject the treaty from Sun, 11/05/2017 - 22:05
Opponents of UNCLOS often point to the royalty payments required under Article 82 of the convention as a reason to reject ratifcation. However, on closer examination many of the criticisms of the revenue sharing agreeements do not hold up. The actual amount the U.S. would have to pay pales in comparison to the revenues that would be generated, a significant reason why industry represenatives have consistently been in favor of UNCLOS. Additionally, the concern that royalty payments would go towards anti-U.S. states and non-state actors could be mitigated if the U.S. were a full member of the treaty.
Quicktabs: Arguments
Caitlyn Antrim, executive director of the Rule of Law Committee for the Oceans, a nonpartisan educational group whose purpose is to inform public discourse regarding U.S. interests in accession to the Convention, expanded further on the history of the revenue-sharing issue. She said it is based on a package deal proposed in 1970 by then-President Richard M. Nixon in which a moderate royalty payment from sea-floor energy and mineral exploitation beyond the 200-meter “isobath” would be shared between the coastal state and the rest of world in return for recognition of the coastal state’s jurisdiction over minerals to the outer edge of the con- tinental margin and assured access for private develop- ers to minerals on the deep ocean floor.
“Over the course of the conference, negotiators reduced the area subject to revenue-sharing by moving the inner boundary of the region out to 200 nautical miles,” Antrim said. “The concept of sharing royalties from development of seabed resources beyond national boundaries has been endorsed by every president since Nixon, including President Reagan. The Convention is critical because industry will not invest billions of dollars without the international recognition of claims and title to recovered minerals it provides.
“The Convention also guarantees the U.S. a permanent seat on the council of the International Seabed Authority, the organization created to recognize min- ing claims beyond the continental margin, with veto power over rules and regulations, amendments and distribution plans for royalty payments,” she said. “The Authority will receive royalty payments whether or not the U.S. is a party, but the U.S. will only be able to exercise its veto over how those funds are distributed if we join the Convention.”
These arguments have proven a successful rallying point for UNCLOS opponents and a potential political millstone for senators who might otherwise be inclined to support the convention. The arguments have retained force despite the fact that the United States itself originally conceived the royalty plan under the Nixon Administration, with the full support of U.S. industry—support that has remained consistent across nearly four decades. Royalties were proposed as a modest concession in return for agreement on the U.S.-sponsored extended continental shelf regime.138 Indeed, most of the oil and gas that may be recovered would be in the first six years and thus would not ever be subject to royalty payments. The “UN-style bureaucracy” argument has also endured despite the fact that opponents have presented no evidence that the ISA is either inefficient, overstaffed, or corrupt at any time throughout the nearly 19 years since its founding in 1994.