Revision of The 1994 Agreement explicitly dealt with and resolved concerns U.S. had with ratifying UNCLOS from Sat, 06/28/2014 - 14:57
Quicktabs: Arguments
The changes set forth in the 1994 Agreement meet our goal of guaranteed access by U.S. industry to deep seabed minerals on the basis of reasonable terms and conditions. The Agreement overhauls the decision making procedures of Part XI to accord the United States, and others with major economic interests at stake, decisive influence over future decisions on possible deep seabed mining. The United States is guaranteed a seat on the critical decision-making body; no substantive obligation can be imposed on the United States, and no amendment can be adopted, without its consent.
The Agreement restructures the deep seabed mining regime along free-market principles. It scales back the structure of the organization to administer the mining regime and links the activation and operation of institutions to the actual development of concrete interest in seabed mining. The International Seabed Authority has no regulatory role other than administering the mining regime, and no ability to levy taxes.
A future decision, which the United States and other investors could block, is required before the organization's potential operating arm (the Enterprise) may be activated, and any activities on its part are subject to the same Convention requirements as other commercial enterprises. States have no obligation to finance the Enterprise, and subsidies inconsistent with GATT/WTO are prohibited. Of particular importance, the Agreement eliminates all requirements for mandatory transfer of technology and production controls that were contained in the original version of Part XI.
Ken Adelman, an active member of the Reagan Administration’s efforts to persuade allies that they should not support the Convention in 1982, now supports ratification, explaining that the changes made through the Part XI Agreement have responded properly to the concerns they had raised in the early 1980s:
Scraped away are virtually all the barnacles we denounced during our 1982 ‘‘scuttle diplomacy.’’ There’s no bar to private firms mining the minerals. No mandatory technology transfer. No decision-making without U.S. participation. Indeed, the U.S. gets a permanent seat on the decision-making body, and thus has veto power. There’s no bar to future qualified mining firms, and no gigantic LOS institution for wannabe bureaucrats.
The seabed mining regime reflects free-market principles. It offers compa- nies the legal certainty needed for large-scale, long-term investments; protects existing claims of U.S. firms; and reinforces international law on territorial waterways. It locks in U.S. offshore economic rights as it expands our rights over resources in a 200-mile exclusive economic zone, 200-mile continental shelf, and in a shelf beyond 200 miles off Alaska.
Perhaps the most significant change for the United States concerned decision-making within the International Seabed Authority. Article 161 of the Convention established a sophisticated decision-making procedure calling for different levels of enhanced majorities depending on the type of decision being made. Section 3 of the Part XI Agreement restructured this procedure by establishing a system of ‘‘chambered voting’’ within the Seabed Authority’s governing Council, to protect minority interests while at the same time allowing majority rule under a one-nation one-vote system. This approach was originally advocated by the Nixon Administration in 1970 when it outlined a system of decision-making for the body that eventually became the International Seabed Authority.
As modified in 1994, the Council, which is the main decision-making body of the International Seabed Authority, now consists of 35 members and has four distinct ‘‘chambers’’ of nations representing different interest groups. One chamber consists of four of the nations with the world’s largest economies, with a specific seat allocated to the United States (if it ratifies the Convention) and one reserved for an Eastern European nation. The second chamber consists of four of the nations that have made the largest investments in deep seabed mining. The third chamber includes four of the nations that are net exporters of the minerals to be mined from the sea floor, including at least two developing countries that rely heavily on the income from these minerals. And the fourth chamber consists of all the other developing nations that are elected to the Council. All questions of substance must be adopted by a two-thirds majority of the entire Council and cannot be opposed by a majority in any of the chambers. In other words, each chamber can veto any decision and block action. Certain key decisions can be made only if there is ‘‘consensus’’ of the entire Council.
Eventually a compromise was formed that, understandably, recognized certain political and economic realities by giving more power to the wealthier nations and securing the rights of private and intellectual property over redistribution. The United States and Russia were given permanent seats on the Council without being specifically named.
An amendment to Article 161 of the Convention under Section Three of the Agreement’s Annex facilitates this permanent seat without actually naming the United States as its occupant: “The Council shall consist of . . . the State, on the date of entry into force of the Convention, having the largest economy in terms of gross domestic product.” Russia, another industrialized State, is virtually guaranteed a seat on the Council as well, by the requirement that chamber (a) include the “State from the Eastern European region having the largest economy in that region in terms of gross domestic product.”104
A Finance Committee was created, consisting of the five largest contributors to the ISA budget, which would effectively give these nations veto power over any of the Councils decisions.105 The Committee would remain in effect until the ISA became “cost- effective.”106 And a consensus of the Committee was required to approve “any decision by the Council or Assembly with budgetary implications.”107
But most importantly, the teeth of the Enterprise were effectively removed. The changes to the treaty in Annex III of UNCLOS regarding the rules of prospecting, exploration, and exploitation completely remove any obligation to freely share information or technology with the Enterprise.
“[Annex III] removes the requirement that parties contracting with the Authority agree to make methods and technology available to the Authority. The Agreement instead provides that the Authority may request cooperation from contracting parties.”108 It only requires it share those willingly, perhaps at a fair market price. “The Agreement also makes clear that contractors entering into joint venture agreements with the Enterprise are under no obligation to finance any part of the Enterprise’s mining operation.”109
With these changes. UNCLOS better reflects the political and economic realities of today’s world. Although these compromises might have put most of the ISA’s power in the hands of the developed world, they have also created an agreement the whole world can live with.
Another change affecting decision-making was the establishment of a Finance Committee, made up of representatives of 15 countries, which has the power to control the budget of the International Seabed Authority. The United States, if it ratifies the Convention, would have a guaranteed seat on the Finance Committee, as one of the five largest financial contributors to the Authority which are automatically elected to the Committee. Because decisions of the Committee on substance must be made by consensus, the United States (along with the other members of the Committee) will effectively have a veto on the budget of the International Seabed Authority. This change was important in the Clinton Administration’s decision to support ratification of the 1982 Convention.
The argument that perhaps the renegotiation of PartXI won’t be binding after all and that we will be stuck with the old Part XI. This argument, of course, is flatly at odds with Article 2 of the renegotiation agreement which provides “[i]n the event of any inconsistency between this Agreement and Part XI, the provisions of this Agreement shall prevail.” It is at odds with the experience of the United States from 1994 through 1998 when we participated in the Authority on a provisional basis. It is at odds with the practice of the International Seabed Authority toward nations which had adhered to the Law of the Sea Convention before the renegotiation in treating them as fully bound by the renegotiation agreement. It is further at odds with the practice of the Authority in establishing a chambered voting system, a Finance Committee, and mining contracts, all of which are based on the renegotiation agreement. And it is at odds with the official Compendium of Basic Documents: The Law of the Sea published in 2001 by the Seabed Authority that not only has an extensive section rewriting Part XI to fully take account of the renegotiation, but which begins this section by noting: “[i]n the event of any inconsistency between the Agreement and Part XI, the provisions of the Agreement shall prevail.”20 To my knowledge, not a single nation in the world has advanced this argument asserted by critics. More importantly, on an issue of such importance, the United States would have not only the legal right to leave the Convention, but given our insistence on the renegotiation we would be expected to exercise our denunciation right under Article 317, should a serious effort be made to set aside the renegotiation of Part XI. This argument, then, simply throws up another horrible without noting that the alternative recommended, not moving forward with adherence, will immediately have continuing substantial costs for the United States, which, unlike the imagined horrible, are neither contingent nor imaginary;
In 1994, more than 100 nations adopted a set of rules governing deep seabed mining. The 1994 agreement applies free market principles to deep seabed mining, establishing a mechanism for vesting title in minerals in the entity that recovers them from the ocean floor. The agreement establishes an International Seabed Authority (ISA) with responsibility for supervising this process. The ISA is an independent international organization— not a part of the United Nations.
It is governed by a Council (with principal executive authority) and an Assembly (which gives final approval to regulations and budgets). As a party to the Convention, the United States would be a permanent member of the Council and have the ability, under relevant voting rules, to block most substantive decisions of the Authority, including any decisions with financial or budgetary implications and any decisions to adopt rules, regulations, or procedures relating to the deep seabed mining regime.
The 1994 agreement also recognized the longstanding view that the deep ocean floor is part of the global commons and beyond the reach of national jurisdiction. The agreement addresses in full all concerns identified by President Reagan a decade earlier. Technology transfer requirements—a principal objection in 1982—were deleted from the agreement.
The 1994 agreement is a legally binding modification of Part XI the Law of the Sea Convention.
U.S. Technological Advantage. It is true that the 1982 form of the convention mandated private technology transfer detrimental to U.S. national security and economic interests. That was one of the factors specifically cited when President Reagan rejected the convention. Article 144 of the convention does encourage technology transfer, calls for parties to “cooperate in promoting the transfer of technology and scientific knowledge,” and remains in force following the adoption of the 1994 agreement but does not mandate technology transfer. Such transfer, mandated by Annex III Article 5 of the convention, was eliminated by section 5 of the annex to the 1994 agreement. Additional protection against national security damage through technology transfer is provided by Article 302 of the convention: “[N]othing in this Convention shall be deemed to require a State Party, in the fulfillment of its obligations under this Convention, to supply information the disclosure of which is contrary to the essential interests of its security.”
[MYTH]: The 1994 Agreement does not even pretend to amend the Convention; it merely establishes controlling interpretive provisions.21 This is nonsensical. The Convention could only have been formally “amended” if it had already entered into force. The 1994 Agreement was negotiated separately to ensure that the Convention did not enter into force with Part XI in its flawed state. The 1994 Agreement made explicit, legally binding changes to the Convention and has the same legal effect as if it were an amendment to the instrument itself.22
A letter signed by all living former legal advisers to the U.S. Department of State, representing both Republican and Democratic administrations, confirms the legally binding nature of the changes to the Convention effected by the 1994 Agreement. Their letter states, “The Reagan Administration’s objection to the LOS Convention, as expressed in 1982 and 1983, was limited to the deep seabed mining regime. The 1994 Implementing Agreement that revised this regime, in our opinion, satisfactorily resolved that objection and has binding legal effect in its modification of the LOS Convention.”23
[MYTH]: The problems identified by President Reagan in 1983 were not remedied by the 1994 Agreement relating to deep seabed mining.24 Not true—in fact, each objection has been addressed. Among other things, the 1994 Agreement:
- Provides for access by American industry to deep seabed minerals on the basis of nondiscriminatory and reasonable terms and conditions.25
- Overhauls the decision-making rules to accord the United States critical influence, including veto power over the most important future decisions that would affect U.S. interests and, in other cases, requires two-thirds majorities that will enable the United States to protect its interests by putting together small blocking minorities.26
- Restructures the regime to comport with free market principles, including the elimination of the earlier mandatory technology transfer provisions and all production controls.27