Worst problem with the Law of the Sea treaty is its resource management regime which establishes a cartel, squashes innovation, and redistributes revenues to non-state actors
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The primary stumbling block to ratification is the bizarre regulatory regime governing seabed mining of deep ocean resources like the minerals cobalt and manganese. This system is unique in its byzantine complexity. The treaty effectively treats the ocean’s unowned seabed resources as property of the United Nations. The LOST established an International Seabed Authority (ISA), ruled by an Assembly and a Council, to govern deep seabed mining and redistribute income from the industrialized West to developing countries. Perhaps inspired by “Star Trek,” the LOST also created an entity called the Enterprise, which would mine the ocean floor—with the coerced assistance of Western mining companies—on behalf of the Authority.
The convention explicitly limited resource development and promised to protect developing countries from the lower prices that would result from minerals production. Essentially, it authorized an OPEC-style commodity cartel.
The details spelled out were as bad as the principles. Private companies had to survey two sites and turn one over gratis to the Enterprise; they also were required to transfer technology to the Enterprise and to developing states. American miners would be targeted by anti- density and antimonopoly provisions, while developing nations would dominate the Authority. Western governments would be required to enforce payment of fees and royalties, subsidize the U.N.’s mining operation, and provide resources for redistribution to Third World governments and pseudo-national entities like the Palestinian Liberation Organization (now the Palestinian Authority).
The problems with such a system are numerous. It would empower an inefficient international organization and incompetent—often kleptocratic—Third World governments, setting poor precedents for the development and operation of other multilateral institutions. Establishing a global oceans regulatory system that restricts entrepreneurship would do more than hinder resource development on the seabed; it would deter the production of software, technology, and processes designed for seabed mining or with dual-use capabilities. Finally, a LOST-like regime would discourage exploration of other currently unowned resources, most notably space. Although the treaty’s economic impact might have seemed limited, its future adverse effects always would have been enormous. Today, they could be even worse.
The UNCLOS treaty was originally concieved as a way to redistribute wealth on a global scale and the international regulatory structure that remains will likely inhibit development, depress productivity, increase costs, and discourage innovation.