[Congressional Record Volume 140, Number 112 (Friday, August 12, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 12, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
  LOST AT SEA: TERMS OF INTERNATIONAL SEA AUTHORITY STILL DO NOT SAIL 
                         WITH THE UNITED STATES

  Mr. PRESSLER. Madam President, today I express my opposition to 
Senate ratification of the Law of the Sea Convention. The treaty itself 
was signed by Madeleine Albright, the U.S. Ambassador to the United 
Nations on July 29, 1994. This signature provisionally binds the United 
States to the stipulations of the treaty for the next 4 years. Although 
the United States has gone this far, the Senate should not give final 
approval to the treaty.
  First of all, no other industrialized country has ratified this 
treaty. It could be that these countries are waiting to see the outcome 
for the United States and will then decide whether signing the treaty 
is beneficial for them. As a signed member, the United States is 
required also to contribute a substantial sum of money, for which we 
would receive little or no return. Ratifying the treaty is, therefore, 
not an investment for the United States, but rather it is a donation to 
an experimental international governmental organization of less 
developed and developing countries.
  Aside from the fact we would have to pay one quarter of the total 
implementation costs as well as year to year costs, we would have only 
a partial veto. This means that even if we truly were opposed to 
something being voted on, we essentially would have no power to protect 
ourselves from the outcome of such a vote if we held a minority 
position. Partial veto seems meager compensation considering the huge 
sums of resources we could be required to contribute.
  An even larger problem emerges, however, with our ratification of the 
terms of this treaty. We challenge our own economic philosophy. Since 
Adam Smith wrote the ``Wealth of Nations,'' the United States has been 
the most liberal country in terms of backing a position of 
governmentally unregulated business. The United States, having grown to 
and retained the position of the world's largest economy, has 
experienced success in business because our various industries are 
allowed to compete with each other. This natural, healthy competition 
results in resources flowing to their highest valued use, the most 
efficient technology being employed leading to lower prices for 
consumers, and the incentive to keep using the most efficient methods 
of production.
  The treaty is in conflict with our economic philosophy. Resources and 
revenues will have to be distributed equally according to the treaty. 
Is this what we want when obviously the United States' input is far 
more than equal? Why would we pay 25 percent of all costs when our 
return would be significantly less?
  The deep seabed mining provisions of this treaty are greatly 
anticompetitive. In fact, the rules of this treaty may conflict with 
rules of the GATT. As one of the few industrialized signatory members, 
there is a chance that the less developed country members would use 
this opportunity to discriminate against us.
  It has been said that the new amendments deal with these objections 
and criticisms, but have we seen exactly how? Is the treaty amended to 
an acceptable extent? Now that we have no choice but to remain bound 
provisionally to this treaty for a certain extent of time, we should 
leave it at that. We can see how it develops over the next 4 years, 
look for places that still need improvement, and then ratify the treaty 
sometime down the road if it then seems beneficial to the United 
States.
  Madam President, with unanimous consent I would like to submit an 
article from the Wall Street Journal written by Doug Bandow at the 
conclusion of my remarks. Mr. Bandow is a senior fellow of the Cato 
Institute, and served as deputy representative to the third U.N. 
Conference on the Law of the Sea. Having been involved at the forefront 
of the negotiations of this treaty, Mr. Bandow is an expert on the 
issues at hand. His article raises valid points and elicits useful 
information. I ask unanimous consent to place Mr. Bandow's article in 
the Record at this time.

                [The Wall Street Journal, July 28, 1994]

                      Deep-Six the Law of the Sea

                            (By Doug Bandow)

       The Law of the Sea Treaty--that ``constitution of the 
     oceans'' that surfaced during the Carter years--is back in 
     the news. The regulation-heavy treaty was properly torpedoed 
     by Ronald Reagan in 1982, but the Clinton administration has 
     resurrected it. Indeed, the U.S. plans to sign the accord 
     tomorrow at the United Nations. Then only the Senate can 
     block its ratification.
       The treaty has a predictable pedigree, given its U.N. 
     origins. Throughout the 1970s and early 1980s, most Third 
     World states saw socialism as the wave of the future and 
     promoted the New International Economic Order--global 
     redistribution of resources, technology and wealth. The Law 
     of the Sea was the quintessential expression of this new 
     order, and the most far-reaching.
       The ocean floor is littered with manganese nodules and 
     other resource deposits. Visions of vast wealth free for the 
     taking led Malta's U.N. representative, Arvid Pardo, to 
     propose in 1967 that the seabed be declared the ``common 
     heritage of mankind,'' The U.N. General Assembly created an 
     ad hoc Seabed Committee and, in 1973, organized the Third 
     United Nations Conference on the Law of the Sea.


                             seabed mining

       That conference eventually gave birth to a convention with 
     more than 400 articles, on subjects ranging from ocean 
     transit to marine pollution. But its most contentious 
     provisions addressed seabed mining.
       The treaty created the International Seabed Authority to 
     regulate private mining, and the Enterprise to develop the 
     ocean floor. The Authority was ruled by an Assembly and a 
     Council: The Soviet bloc was guaranteed three seats on the 
     latter, while the U.S. was assured of none, Western countries 
     and firms were to provide funds and technology for 
     redistribution to developing states. The treaty limited 
     mineral production, failed to guarantee private firms access 
     to the seabed and subsidized the Enterprise. Little wonder 
     that President Reagan--joined by other leaders of the 
     industrialized world and event the Soviet Union--rejected the 
     treaty.
       But diplomats are attracted to treaties as moths to lights. 
     Informal discussions began in 1990 over revising the accord, 
     culminating in Secretary of State Warren Christopher's 
     announcement that the administration will sign a revised 
     treaty. And yet earlier this year David Colson, deputy 
     assistant secretary of state for oceans, admitted that ``the 
     basic flaws of [the treaty's] deep seabed mining regime are 
     manifold.'' ``Why, then, bother trying to ``fix'' it?
       The Law of the Sea Treaty was created in a different era 
     with a purpose of extracting wealth from the West. Since 
     then, most developing states have begun moving away from 
     collectivism. Yet the original treaty structure remains. Even 
     the State Department acknowledges that the agreement 
     ``retains the institutional outlines of Part XI,'' as the 
     labyrinthine seabed mining provisions are known.
       In contrast, a decentralized process, perhaps with a small 
     international office, providing for mutual recognition of 
     mine-sites and arbitration of conflicts at minimal expense, 
     would provide adequate security of tenure for mining 
     companies. The U.S. and the Europeans implemented such a 
     system after they rejected the first treaty. This framework 
     could be expanded to other nations. The newest version of the 
     treaty is simply a solution in search of a problem.
       Supporters of the Law of the Sea Treaty point out that the 
     convention covers other subjects, such as navigation and 
     scientific research. However, while these provisions are 
     generally noncontroversial, they are also largely irrelevant, 
     since most merely codify customary international law. The 
     Pentagon worries about naval transit, but few countries have 
     the incentive, let alone the ability, to interfere with 
     American ships: Not once over the past decade has a U.S. 
     vessel been denied freedom of transit. In any case, it is the 
     U.S. Navy, and not the Law of the Sea Treaty, that will 
     ultimately guarantee U.S. interests.
       As for the seabed provision, State Department negotiator 
     Wesley Scholz claims that ``we have been successful in fixing 
     all the major problems raised by the Reagan administration. 
     We have converted the seabed part of the agreement into a 
     market-based regime.''
       Well, not quite. Administration officials have turned a 
     disastrous accord into merely a bad one.
       Overall, the International Seabed Authority remains an 
     unnecessary bureaucratic boondoggle, likely to end up as 
     enervating, expensive and politicized as the U.N. The Treaty 
     retains both the ISA and the Enterprise, an international 
     version of the state enterprises that have failed so 
     miserably all over the world. The governing process is almost 
     comically complicated, with an Assembly, Council, and such 
     subsidiary bodies as a Finance Committee and a Legal and 
     Technical Commission, all of which have their own arcane 
     rules for membership and voting. For each site they wish to 
     mine, private companies are still required to survey and 
     provide, gratis, a separate site for the Enterprise. 
     Antimonoply and density provisions would continue to threaten 
     U.S. firms disproportionately.
       Companies would still 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.) Any surplus funds would 
     still be distributed ``taking into particular consideration 
     the interests and needs of the developing States and the 
     peoples who have not attained full independence or other 
     self-governing status,'' like the PLO.
       Even some of the changes look inadequate. Under the revised 
     treaty, the U.S. would be guaranteed a seat on the Council, 
     but no veto. Rather, the Council would consist of four 
     chambers, any one of which could block action if a majority 
     of its members voted no. On matters of vital interest, the 
     U.S. probably could round up the necessary two extra votes 
     within its chamber, but over time the career foreign service 
     officers likely to staff most nations' ISA delegations, 
     including that of the U.S., might grow uncomfortable being 
     known as obstructionists.
       Moreover, developing states and the land-based mineral 
     producers--whose interests are antagonistic to the very idea 
     of seabed mining--are to have their own chambers, and thus de 
     facto vetoes over the ISA's operations. They may therefore be 
     able to extract some potentially expensive concessions, like 
     new limits on production, before allowing the ISA to 
     function.
       Funding remains a problem as well, despite America's seat 
     on the Finance Committee. The U.S., naturally, would be 
     expected to provided the largest share of the ISA's budget, 
     25% to start. How much would that be? Years ago the U.N. 
     estimated that the ISA could cost between $41 million and $53 
     million annually, on top of initial building costs of $104 
     million and $225 million. The administration contends that 
     the new agreement provides for ``reducing the size and costs 
     of the regime's institutions''--by the adoption of a 
     paragraph pledging that ``all organs and subsidiary bodies to 
     be established under the Convention and this Agreement shall 
     be cost-effective.'' Like the U.N. itself?
       Finally, the mandatory technology transfer requirement has 
     been discarded, a major advance, only to be replaced by a 
     provision requiring sponsoring states to facilitate the 
     acquisition of mining technology if the Enterprise or Third 
     World nations ``are unable to obtain'' equipment 
     commercially. Could the ISA then hold the industrialized 
     countries, as well as private miners, responsible for 
     subsidizing the Enterprise's acquisition of technology? 
     Provisions like this are potential time bombs.


                     `a very important development'

       The revised Law of the Sea Treaty ``is a very important 
     development for the United State because it gives us an 
     opportunity to, in a market-oriented context, gain the 
     benefits of some of the resources of the Law of the Sea.'' 
     explained Mr. Christopher to Congress in June.
       If only that were true. In fact, consumers worldwide are 
     far more likely to gain the benefits of those minerals 
     without the treaty. Created at a time when redistributionist 
     economics held sway internationally, the treaty is beyond 
     fixing. With the administration nevertheless committed to 
     signing the record, it is up to the Senate to consign it to 
     the ash heap (or ocean floor) of history--where it belongs.

                          ____________________