ARGUMENT HISTORY

Revision of The 1994 Agreement did not resolve serious problems with UNCLOS from Wed, 10/08/2014 - 22:09

Many of the most onerous provisions of UNCLOS were left in place even after the 1994 amendment, including provisions on technology transfer and wealth distribution.

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The 1994 Agreement specifies eligibility for the Council with formulas that would assure the United States a permanent seat—as “the state having the largest GNP”—if it were to ratify UNCLOS. It also assures permanent seats for Russia—as the largest state in “Eastern Europe”—and China and India—under a set-aside for “states with large populations.” There will, in any case, always be a majority of developing countries on the Council, given various other eligibility formulas. For instance, only four of the 36 seats are reserved for “states which have made the largest investments in [deep sea mining] activities.”22

Contrary to some advocates’ claims, the 1994 supplementary agreement does not give the U.S. a veto over actions of the Authority. Under UNCLOS, the Council is only required to act by “consensus”—so that one negative vote would constitute a veto—when it endorses “rules, regulations and procedures [which] relate to prospecting, exploration and exploitation in the Area,” that is, the deep seabed.23 However, the 1994 agreement specifies that the Council may make decisions by two-thirds vote on matters of “substance” and by mere majority on matters of “procedure”24 Thus, a mere majority may decide, as a matter of “procedure,” when a seemingly “substantive” decision is really only procedural, empowering the deciding majority to decide on further questions by a simple majority vote.

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Rabkin, Jeremy. The Law of the Sea Treaty: A Bad Deal for America . Competitive Enterprise Institute: Washington, D.C., June 1, 2006 [ More (12 quotes) ]

“Unsigning” the 1994 Agreement. When the Clinton Administration signed the 1994 Agreement in July 1994, it arguably obliged the United States to refrain from committing any act that would defeat the agreement’s “object and purpose,” even though the United States has ratified neither the agree- ment nor UNCLOS.94 The United States should therefore “unsign” the 1994 Agreement to resolve any legal ambiguity regarding U.S. intentions to explore and mine the deep seabed. In May 2002, the Administration of President George W. bush delivered a letter to the U.N. Secretary-General regarding the rome Statute of the International Criminal Court (ICC), which the Clinton Administration had signed in December 2000. The letter stated that the United States “does not intend to become a party” to the rome Statute and accordingly “has no legal obligations arising from its signature on December 31, 2000.”95 This “unsigning” of the Rome Statute made clear to the international community that the United States has no intention of joining the ICC, and it enabled the bush Administration to secure pledges from other nations that they would not surrender U.S. military personnel to the ICC for prosecution.96 Since securing such pledges would arguably defeat the object and pur- pose of the rome Statute, the unsigning letter was necessary to clarify that the U.S. no longer had an obligation to adhere to the terms of the rome Statute. The United States should unsign the 1994 Agreement to resolve any legal ambiguity regarding U.S. actions that may be seen as violating the agreement’s object and purpose. Since the United States never signed UNCLOS, it is unnecessary to unsign the convention.

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Finally, there is technology transfer, one of the most odious redistributionist clauses of the original convention. The mandatory requirement has been discarded, replaced by a duty of sponsoring states to facilitate the acquisition of mining technology "if the Enterprise or developing States are unable to obtain" equipment commercially.29 Yet the Enterprise and developing states would find themselves unable to purchase machinery only if they were unwilling to pay the market price or were perceived as being unable to preserve trade secrets. The clause might be interpreted to mean that industrialized states, and private miners, whose "cooperation" is to be "ensured" by their respective govern- ments, are then responsible for subsidizing the Enterprise's acquisition of technology.30 Presumably, the United States and its allies could block such a proposal in the Council, but again, it is hard to predict future legislative dynamics and potential logrolling in an obscure UN body.

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Bandow, Doug. Faulty Repairs: The Law of the Sea Treaty is Still Unacceptable . Cato Institute: Washington, D.C., September 12, 1994. [ More (5 quotes) ]

Indeed, production controls, one of the most perverse provisions of the original text, could recur under the revised agreement. The revision does excise most of article 151 and related provisions, which set a convoluted ceiling on seabed production to protect land-based miners. However, it leaves intact article 150, which, among other things, states that the ISA is to ensure "the protection of developing countries from adverse effects on their economies or on their export earnings resulting from a reduction in the price of an affected mineral, or in the volume of exports of that mineral, to the extent that such reduction is caused by activities in the area."22 That wording would seem to authorize the ISA to impose production limits. The United States might have to rely on its ability to round up allied votes to block such a proposal in the Council in perpetuity.

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Bandow, Doug. Faulty Repairs: The Law of the Sea Treaty is Still Unacceptable . Cato Institute: Washington, D.C., September 12, 1994. [ More (5 quotes) ]

ISA fees have been lowered, but companies will continue to owe a $250,000 application fee and some, as yet undetermined, level of royalties and profit sharing. (The "system of payments," intones the compromise text, shall be "fair both to the contractor and to the Authority," whatever that means. Fees "shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals," even though seabed production is more expensive, riskier, and occurs in territory beyond any nation's jurisdiction.18 The revised LOST establishes a new "economic assistance fund" to aid land-based minerals producers.19 Surplus funds will still be distributed "taking into particular consideration the interests and needs of the developing States and peoples who have not attained full independence or other self-governing status"--such as the Palestine Liberation Organization.20 Theoretically, America could block inappropriate payments--at least as long as it was a member of the Finance Committee--but over time the United States would come under enormous pressure to be "flexible" and "reasonable."

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Bandow, Doug. Faulty Repairs: The Law of the Sea Treaty is Still Unacceptable . Cato Institute: Washington, D.C., September 12, 1994. [ More (5 quotes) ]

Presumably, it is for these reasons that the 1994 Agreement does not explicitly amend LOST. Rather, the Agreement states that “The provisions of this Agreement and Part XI [of LOST] shall be interpreted and applied together as a single instrument.”

At the time the Agreement was signed, a representative of the American ocean mining industry cited this shortcoming in testimony before Congress: “[The 1994 Agreement] does not even purport to amend the Convention. It establishes controlling ‘interpretive provisions’ that will control in the event of a dispute. This is not an approach that gives confidence to prospective investors in ocean mining.” (Emphasis added.)

Neither does the 1994 Agreement require any of the LOST tribunals to abide by the Agreement. This increases the likelihood that such panels, when hearing disputes between parties, will view LOST itself as the basis for resolving the dispute, and not the 1994 Agreement.

That is especially so since roughly sixteen percent of the parties to LOST – fully 25 member countries – have yet to sign the 1994 Agreement. It is far from clear on what basis these countries could be expected to view the Agreement’s purported revisions to the Treaty as legitimate. How, for instance, would resolutions be achieved in disputes between countries that are party to both LOST and the Agreement, on the one hand, and countries that are party only to LOST, on the other? At the very least, the latter could legitimately challenge claims by the United States (or others) to be bound by terms other than those contained in the Law of the Sea Treaty’s agreed text.

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Gaffney, Frank. "Statement of Frank Gaffney: Hearing on the Law of the Sea Convention (October 4, 2007) ." Testimony before the Senate Foreign Relations Committee, October 4, 2007. [ More (19 quotes) ]

Mandatory Technology Transfers: Although the 1994 Agreement purports to modify some troubling LOST provisions on the obligatory sharing of sensitive information and technologies, it fails to address, let alone alter, other coercive provisions. These include LOST’s requirement that states parties “promote the acquisition, evaluation and dissemination of marine technological knowledge and facilitate access to such information and data.”

Neither does the Agreement speak to LOST’s requirement to transfer information and perhaps technology pursuant to the Treaty’s mandatory dispute resolution mechanisms. Parties to a dispute are required to provide the tribunal with “all relevant documents, facilities and information.” This amounts to an invitation for competitors to bring the United States and/or its companies or adversaries before a LOST tribunal to obtain sensitive data and know-how. These are hardly the sorts of safeguards upon which President Reagan had insisted.

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Gaffney, Frank. "Statement of Frank Gaffney: Hearing on the Law of the Sea Convention (October 4, 2007) ." Testimony before the Senate Foreign Relations Committee, October 4, 2007. [ More (19 quotes) ]

It remains a fair question whether a complex U.N. regulatory bureaucracy—especially one that counts international wealth redistribution as one of its functions—is a reassuring presence for investors. The 1994 Agreement does not actually abolish the Planning Commission, but simply suspends its operations until the regulatory council of the Authority “decides otherwise.”15 The Seabed Authority still proclaims, on its official website, that it will oversee “action to protect land-based mineral producers in the third world from adverse economic effects of seabed production.” The 1994 Agreement seems to give at least tacit support to this notion in empowering the Authority to provide “economic assistance” to “developing countries which suffer serious adverse effects on their export earnings” from deep seabed mining.16 The Authority can still direct proceeds from mining or drilling approved for the continental shelf to compensate “affected developing land-based producer States.” If the world wants to encourage mining in the deep seabed, this is no way to do it.

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Rabkin, Jeremy. The Law of the Sea Treaty: A Bad Deal for America . Competitive Enterprise Institute: Washington, D.C., June 1, 2006 [ More (12 quotes) ]

Further, this approach carries an immediate risk to U.S. national security. Allegedly to ensure that the benefits of deep sea mining are properly shared, UNCLOS requires all states to “cooperate in promoting the transfer of technology and scientific knowledge” relevant to exploration and recovery activities in the deep seas.17 The 1994 supplementary agreement endorses these provisions, qualifying them only with vague assurances that technology transfer should be conducted on “fair and reasonable commercial terms and conditions, consistent with the effective protection of intellectual property rights.”18 It remains to be seen whether the Authority will assert claims to impose technology transfers in this field. It could do so by making such transfers a condition for approving permits for exploration or recovery by Western firms, since all such activity requires approval of the Authority.19 Yet even without direct demands from the Authority, the Chinese government, by invoking these provisions, managed to obtain microbathymetry equipment and advanced sonar technology from American companies in the late 1990s. China claimed to be interested in prospecting for minerals beneath the deep seas. Pentagon officials warned against sharing this technology with China, given its potential application to anti-submarine warfare. But other officials in the Clinton Administration insisted that the United States, having signed UNCLOS—even if not yet having ratified it—must honor UNCLOS obligations on technology sharing. Future administrations may be more vigilant, but the Authority may, in the future, be more insistent. That is the logic of a treaty that makes mining by firms in one country contingent on the approval of the governments in other countries.

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Rabkin, Jeremy. The Law of the Sea Treaty: A Bad Deal for America . Competitive Enterprise Institute: Washington, D.C., June 1, 2006 [ More (12 quotes) ]