Revision of Revenue sharing agreements in UNCLOS are not a reason to reject the treaty from Sun, 11/05/2017 - 19:22
Quicktabs: Arguments
Granted, as UNCLOS critics are quick to point out, access to the ECS under UNCLOS is contingent upon payment of royalties to the Interna- tional Seabed Authority (ISBA) for oil and gas development beyond 200 nautical miles (nm).26 However, the royalty framework is relatively insignifi- cant compared to the fee-sharing arrangements for overseas oil and gas development and the enormous economic benefits anticipated from off- shore resource development. Revenue sharing does not begin until the 6th year of production of a particular well or site, starts at 1% of the value of production and increases 1% per year. By the 12th year and remaining years thereafter, the royalty is 7% of the value of production, paid either in kind or in dollars.27 During the 1970s, these revenue sharing provisions were negotiated in consultation with the U.S. oil and gas industry.
Payments are to be distributed by the ISBA to States Parties of UNCLOS in accordance with Article 82(4) on the basis of equitable criteria that take into account economic development factors. Of note, this distribution is distinct from the distribution of revenues generated from deep seabed mining operations under Part XI of the Convention. As a State Party to UNCLOS, the United States would have a permanent seat in the ISBA to ensure both kinds of distributions are made in ways acceptable to the United States—Section 3(15) of the Annex to the IA guarantees the United States a seat on the ISBA Council in perpetuity.28 Any ISBA decision regarding revenue sharing must be approved by the Council.29 Additionally, if distributions are made to a country that is already receiving U.S. foreign aid, the United States could offset aid to that country by the amount of distributions paid by the ISBA, in essence eliminating any increase financial burden to the American taxpayers.