Joint ventures with signatory nations not an acceptable alternative because U.S. companies would be bound by treaty without accruing its benefits
The renegotiated International Seabed Authority, established under the treaty, provides property rights for U.S. firms to develop deep-sea mining sites that require security of tenure before they can justify the large investments required. Further, the treaty grants the U.S. the only permanent veto as to how the modest royalties, collected in return for secure property rights, are to be distributed to state parties.
Most troubling, when asked by the chairman how he would provide security of tenure sought by U.S. firms, Mr. Rumsfeld suggested that they should operate through joint ventures with other nations. His answer, implicitly understanding that U.S. nonadherence can in no way alter the international regime now in force for 161 countries, and that our firms would still operate under the treaty regime, needlessly throws away U.S. jobs, Treasury tax receipts, and critical U.S. access to strategic minerals. It would also mean no U.S. veto over any distribution of revenues, amendments to Part XI, or rules and regulations for mining.
The treaty provides property rights for miners in an area of the ocean not under the sovereignty of any nation. Absent U.S. adherence, U.S. firms cannot mine the deep seabed—as they will not have the security of tenure necessary to expend the $2 billion to $3 billion for a deep-seabed mining operation. These operations are of utmost importance for the U.S.—at stake is U.S. access to strategic minerals of copper, nickel, cobalt, manganese and rare earths worth about $1 trillion.
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.