Under UNCLOS, U.S. revenues from offshore resource extraction would be redistributed to non-desirable state actors
UNCLOS is silent on how UNCLOS nations that receive Article 82 royalty revenue should spend it. Recipients are apparently free to spend the funds on military expenditures or simply deposit them into the personal bank accounts of national leaders.
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Some UNCLOS proponents maintain that the United States, if it joined the convention, would have a “veto” over such decisions because the U.S. would hold a permanent seat on the 36-member Council, which is the executive organ of the Authority.54 In fact, UNCLOS empowers the Council only to make recommendations to the Assembly on the disposition of Article 82 revenue, which the Assembly may approve or disapprove.55 Any Council recommendation that is disapproved by the Assembly is returned to the Council “for reconsideration in the light of the views expressed by the Assembly.”56 Therefore, in function and form, the Assembly makes final determinations regarding the disposition of Article 82 revenue.
Thus, it is unlikely that the United States would be able to prevent the Authority from distributing Article 82 revenue to Cuba and Sudan, UNCLOS members that the U.S. State Department has designated as state sponsors of terrorism.57 It would also be difficult for the United States to block the Authority from sending funds to the undemocratic, despotic, and/or brutal regimes in Belarus, Burma, China, Somalia, and Zimbabwe.58 Finally, the United States would have limited ability to stop the transfer of Article 82 revenue to corrupt regimes, especially given that 13 of the 20 most corrupt nations in the world are UNCLOS members.59
By virtue of its seat on the Council, the United States might be able to hinder decisions to distribute Article 82 revenue for purposes to which it objects. Whether the United States would be steadfast in its objections to such distributions and whether the Assembly would make any such distributions without the consent of the Council are open questions.
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UNCLOS is silent on how UNCLOS nations that receive Article 82 royalty revenue should spend it. UNCLOS does not require recipient nations to spend the revenue on anything related to the oceans or the maritime environment. Nor does it require them to spend the revenue on humanitarian or development projects, even though most, if not all, of the eligible recipients are supposed to be poor, developing countries. Recipients are apparently free to spend the funds on military expenditures or simply deposit them into the personal bank accounts of national leaders.
Finally, UNCLOS does not require that Article 82 revenue be spent in a transparent or accountable manner. Apparently, the Authority simply hands over substantial amounts of money to the recipient nation to be spent however that nation sees fit, no matter how corrupt or inept that nation’s leadership is.
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There are also the costs from the redistribution of payments from the Authority to governments of developing countries. Many of these governments are less than savory, and traditional aid funds or revenues from existing natural resources are already being channeled into the pockets of the governing class and used to keep them in power. An additional revenue stream from the Authority would further cement their positions and worsen the condition of their peoples, further suppressing global growth. Add to this the aforementioned risk of allocating funds to separatist or terrorist organizations, which could turn the Authority into a backdoor source of funding for the arms trade. Thus, if the Authority works in the way it is constituted, it would represent a perverse cost to the poorest people in the world.
Worse still, these sizable "royalties" could go to corrupt dictatorships and state sponsors of terrorism. For example, as a Treaty signatory and a member of the "Authority's" executive council, the government of Sudan which has harbored terrorists and conducted a mass extermination campaign against its own people -- would have just as much say as the United States on issues to be decided by the "Authority." Disagreements among Treaty signatories are to be decided through mandatory dispute resolution processes of uncertain integrity. Americans should be uncomfortable with unelected and unaccountable tribunals appointed by the Secretary General of the United Nations serving as the final arbiter of such disagreements.
Even if one were to agree with the principle of global wealth redistribution from the United States to other nations, other UN bodies have proven notably unskilled at financial management. The UN Oil-for-Food program in Iraq, for instance, resulted in hundreds of millions of dollars in corruption and graft that directly benefited Saddam Hussein and those nations friendly to Iraq. The Law of the Sea treaty is another grand opportunity for scandal on an even larger scale.