The Opportunity Costs of Ignoring the Law of Sea Convention in the Arctic
[ Page 16-17 ]
Who might see fit to challenge the actions of a seafloor free rider like the United States? To begin, UNCLOS member states have obvious interests in the integrity of the continental shelf and seabed regimes in which they invest. Potentially interested states fall into at least three categories. First are states that may have an interest in conducting commercial activity of their own in an area claimed by the U.S. but not ratified through the UNCLOS process. Second are states that might have no objection, per se, to U.S. activity, but wish to ensure the United States pays its fair share under UNCLOS for the privilege of conducting commercial activity. Third are states that stand to benefit from the Article 82 “equitable sharing” payments and seek to ensure such payments are maximized.
In addition to UNCLOS member states, corporations with commercial interests in the seabed floor may have an interest in ensuring that actual and potential competitors do not obtain an unfair competitive advantage by operating outside the UNCLOS system. Although Article 82 royalties are assessed to states, it seems reasonable to assume that corporations may be assessed extended continental shelf fees by their licensing- states. Likewise, if operating in the area, corporations required to abide by rules and regulations established to govern the area would presumably demand that their competitors be bound by the same rules.
Similarly, the ISA, created by UNCLOS to “organize and control activities in the Area” and to distribute economic assistance and Article 82 royalty payments, would have an interest in preserving the integrity of the system it was created to oversee. Importantly, the ISA has been vested with international legal personality, which includes the power to bring suit to enforce its interests.168
Finally, enterprising NGOs might take a keen interest in whether a state and its licensees are profiting at the expense of developing and land-locked states protected by UNCLOS, or, whether states and licensees are complying with ISA regulations created to protect the marine environment in and around the common heritage of mankind. The most obvious targets for NGO disapproval and legal or political action would seem to be the states and corporations operating outside the economic assistance and environmental protection regimes created by UNCLOS.
[ Page 18 ]
Public international law governs the relationships between states and, on occasion, the relationships of states to international organizations. Nations commonly assume obligations to each other through treaties; however, a state may be bound by a norm of customary international law notwithstanding its failure to enter a treaty. Customary international law is created in a variety of ways, including by treaty provisions adopted and followed by sufficiently large numbers of states as a matter of legal obligation. Customary international legal obligations also give rise to an array of international remedies. Thus, the fact that the United States has not ratified UNCLOS does not necessarily mean the United States is free—as a matter of international law—to ignore particular UNCLOS legal norms or processes. If, in fact, the United States is under an obligation to comply with an UNCLOS provision that has also become customary international law, failure to comply could give rise to international liability and subject the United States to international legal remedies.
There is a strong case to be made that the United States is obligated under international law to comply with UNCLOS’ seafloor regime despite the fact that the United States has never ratified the convention. The most fundamental and compelling reason the United States is bound by UNCLOS’ regime for the extended continental shelf is because, quite simply, the United States says it is bound.170 Moreover, even though the United States has not ratified the convention, as a signatory to the revised deep seabed mining provisions, the United States has incurred an international legal obligation to not act contrary to the “object and purpose” of the treaty.171 In light of the prominent role given the deep seabed mining regime in the convention and its necessary and practically inseparable relationship to the extended continental shelf regime, the United States is arguably not permitted to act in any way that would undermine these central provisions.
[ Page 20 ]
A second potential means to compel compliance with UNCLOS regimes would be for a foreign state, corporation, or even an NGO to bring an action against the United States, or, perhaps more likely, a U.S.-licensed corporation in a foreign domestic jurisdiction. The enforcing party would be required to bring its action in a jurisdiction with domestic law incorporating UNCLOS obligations. Enforcement of UNCLOS in a foreign domestic court would depend on the relationship between treaties and the foreign nation’s domestic law.185 Nations fall into two categories in how they implement treaties into their domestic law. Some states convert treaties into domestic law automatically186 and in an UNCLOS member state taking such an approach, UNCLOS would be enforceable in a foreign domestic court without any further action required by the member state. In contrast, some nations require implementing legislation before a treaty is enforceable as domestic law.187 In such a nation, UNCLOS would either need to be made self-executing upon ratification, or be implemented through separate legislation.188
In either case, if a state is willing to incorporate UNCLOS provisions into its domestic law, it is foreseeable that the state might also insist that corporations conducting business within the state comply with UNCLOS. For example, state A might establish a rule that before corporation Z does business within A, Z must demonstrate that its international business is conducted consistent with UNCLOS. Further, if Z is already doing business within A and undertakes a new non-UNCLOS-compliant venture elsewhere, A might subject Z to penalties. Alternatively, A might allow private causes of action to be brought by third-party corporations or NGOs against Z as a way to compel UNCLOS compliance. Chevron, Exxon, and Coca-Cola are some of the U.S. corporations that have been forced to endure long and expensive litigation in a foreign domestic court for charges ranging from environmental pollution to human rights violations.189
[ Page 21 ]
The survey above suggests a variety of legal means through which the United States or a U.S.-licensed corporation might be challenged for operations on the seafloor outside the UNCLOS system. To date, such challenges are speculative; however, the variety of potential challengers and forums should lay bare the notion that the only thing corporations have to fear is fear itself.193
Corporate reluctance to proceed on the seafloor may also arise from the perception that a more immediate non-legal risk looms larger. The most threatening prospect for prospective seafloor operators today—other than a foreign navy or coast guard vessel arriving to forcibly eject them from an offshore site—may be the potential loss of reputation that would result from undertaking a “rogue” operation outside the UNCLOS regime.194 Companies with global operations and markets rely on political support from foreign governments, financial support from foreign investors, and market support from foreign consumers. Companies may be loath to jeopardize success abroad by taking action that might antagonize these pillars of a favorable business climate.195
[ Page 23 ]
China, the European Union, or other member states could also attempt to amend UNCLOS in ways that could change the favorable extended continental shelf and deep seabed mining regimes, or give coastal states more control beyond their territorial seas and potentially obstruct the freedoms to navigate and to lay and maintain international cables. Without access to UNCLOS procedures, the United States loses the force of its objections and risks being a bystander as Member States effectively amend customary international law through UNCLOS amendments.205
In the years to come, will China continue to support a legal regime in the Arctic that excludes China from the vast majority of the Arctic’s seafloor resources? And if China finds the UNCLOS seafloor regime constricting and employs its considerable influence and financial strength to lobby for offshore investment or for a new approach, will other states without Arctic coastlines follow suit? Calls for an Arctic treaty are not new,206 and given China’s interests, such an effort would hardly be surprising.207 If such a movement were to arise, it is difficult to argue that the United States would be in a stronger position to resist change as an uncommitted outsider rather than a full-fledged member state.