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1Li The Low Of The Sea Confe,.=rence-- A]Status Of The Issues, 1978 U.~~~,J S. ;, LJ~rrILICMEC COASTAL SERVICES CENTERJ L4 ~~~~~~~~~~2234 SOUTH. HOBSON AVENUE CHARLESTON~ SC 245�1 COASTAL ZONE -TY INFORMATION CENTER 4- 4419 I~~L U44 'h1 1973z .em,~ a \ ~COMPTROLLER GENERAL OF THE UNITEO STATES .. - a w ~~~~~~~~~~~~WASHINGTO. D C. Z0O1 4 ,:The Honorable John M. Murphy, Chairman Committee on Merchant Marine and Fisheries :-:;. i 0 > ._ H!iuuse of Representatives Dear Mr. Chairman: 2 .<~ ~ This is our report in response to your November 17, 1977, request that we update our report on U.S. participation in -I-" the Law of the Sea conference and the status of the issues as they were at the beginning of the 1977 New York conference -:.(ssion. Subsequently, we agreed with your office to report on U.S. participation in the conference and to cover the is- el sues as they stood at the end of the 1978 New York conference session. As arranged with your office this report will be dis- :t, ~tributed to other Committees and Members of Congress and to other interested requesters. Copies are being sent to the � : Director, Office of Management and Budget; the Secretary of '~ ~State; and the Ctairman, National Security Council Inter- agency Group for Law of the Sea. Sincerely yours, COASTAL ZONE H C: --'~ INFORMATION CENTER Comptroller General iUFORMA ION NTef the United States ... J_ ~.7_{-Li COMPTROLLER GENERAL,'S THIE [LA' OF THE SEA REPORT TO THE CONFERENCE--STATUS OF COMMITTEE ON MERCHANT THE ISSUES, 1978 MAR INE AND F ISIFER IES ;� Ad.! HOUSE OF REPRESENTATIVES : r... D IG E S T Of the 156 national entities in attendance at the Law of the Sea conference, 119 are devel- l'r. '.'~ oping nations. Both developed and developing nations in general subscribe to the principle that the oceans beyond national jurisdiction ~._.:- :~are the common heritage of mankind, a princi- :- ple supported by the United States. However, - the interpretation each group has of this principle differs. (See pp. 5 and 6.) i: OBJECTIVE !Id..~ The objective of the U.S. delegation is to achieve a comprehensive treaty that protects essential U.S. interests, including assured access to seabed minerals; maintenance of M high seas freedoms of navigation and over- flight and related rights; transit through, over, and under straits used for interna- tional navigation: broad acceptance of in- X:. ~., ternational standards for conservation and optimum use of marine living resources; coastal state jurisdiction over continental margin resources beyond 200 miles; research ?..~ 2on a free and broad basis; and protection S -i ]:~:Iof the oceans from all forms of pollution. 'ir:'-~ qThe following principal issues were discussed p:,~ :- ..e:' ~ at the 1977 and 1978 conference sessions. - ASSURED ACCESS TO MINERALS Assured access to mineral resources of the deep seabed for private contractors or states parties under reasonable terms and conditions 1 is central to the success of a future [ . treaty. This concept includes a system of financial arrangements which does not create burdens for prospective ocean miners. Unless this condition is met, the treaty discussions stand little chance of success. ID-79-6 TeAr Sheet Ulpon removal. the repnt cover daloe hbalid lIe noted hercon. - An Intfrnat ional S'iabed Authoritl. would be es- to bIi ish d under the treaty to air-inister the Jl~ ~ ~ or~r hr q concept in the test interest o t va n k i ij T he A ut ho L i t y woulId include a -~~ :prcr~~tu odv known as thc. Assembly, an ex- eC LitV~ far known as the Council, and an oputfr cit ino arm !rnown as the Enter-crise. The one-nation, one-vote concept in the As- sembly wculd place control of the Assembly in the hands of a two-thirds majority of nat ions. Thi!.. could be inimical to U.S. interests if the Assembly is given power to _Vr r'ie LI ideIi n(_S Set for th i n the treaty. Wix-in the structure of the Assembly as it has vuvoved in. nc-qotiations to daLe, it would ~e cufficuttfor develoa;ed countries to mo- ijilize effective_ supporit on key issues. (See .. 7.) Developinci and developed nations hold di- verqf-'t %,iews on t 'e purpose of the Council. -V ~~ Developing nations regard the Council as an fCXe.cutil.'1Ccommitte-e of the Assembly with rc-;.resentation from both regional group.s and special inter(.st groups like minerp or land- based mineral producers. Develc,,ed countries, on t~ie other hand, look to the Council to '7i ~~ Counterbalance thle Assembly by protecting thr: speFcial interest groups. (See pp. 7 and The Enterc-rise would undertake commercial exploitation of seabed resources in a manner sim-ilar to that of private corporations or states parties. (See pp. 8 an~d 9.) I. - ~~Sources of funds The International Seabed Authority will have numerous sources of funds, such as various typus ol p~aymcunts made by contractors or ~~A ~oth~ers e~xplorinq or texploitinq the seabed * ..ealr.s0Lurc(2, voluntary contributions, -x('ess r(,v4nueS- generatud by operations of the. Enter,.,risc, and loans trom. commzercial sources,; or international financial institu- tI on. ( ste pp. 20to 22.)12 -A~~~~~~~~~~~~~i .' 3 Obligations of contractors The obligations of private and/or state ccn- tractors to tLe Authority can be characterized as monetary payments, technology transfers, and production restraint. At the end of the a";n'd- 1978 New York conference session, a negotiat- i-z��I ~ ing group committee chairman proposed a sched- t~.-;:~ ule of mandatory fees for commercial produc- tion. (See app. V.) There is no consensus on these fees. One difficulty with the tech- nology transfer provisions is that not all contractors may be in a position to sell all technology used in their operations because /F!,4 they simply may not own the technology. An- other problem is how to resolve disputes about whether the contractor has met this obligation. (See pp. 12 to 20.) - -., Production restraint provisions--limiting the amount of minerals that can be mined-- are being negotiated to protect and preserve the investments of land-based producers. Recognized problems in drafting such pro- :.:i~. jvisions include the possibility of a scarcity of minesites available for distribution, applicability of production controls to i :"~ '-: the Enterprise, and whether some form of quota system would be considered in awarding contracts. (See pp. 18 to 20.) DISPUTE SETTLEMENT ' The treaty text currently proposes four ; !i'- '?~methods of dispute settlement--the Interna- i tional Court of Justice, the Law of the Sea Tribunal and its Seabed Disputes Chamber, arbitration procedures, and a special arbitral tribunal made up of experts. The parties are obligated to seek some peaceful means of set- -~-!:~ ~ tlement but the method selected depends on both the type of judicial issue and the pref- erence of the parties. Thc review powers of the Seabed Disputes Cham- ber may be limited because of a treaty pro- -< ~.~vision which states that the Chamber cannot challenge the Authority's "legislative" or discretionary acts or determine whether other e- : Assembly acts conform to treaty provisions. .. - Xi . rear Sh}leet . ., j Fe-,T.. .-,, . ".%'- ; . .:. ~.;:%.:. i ...:-'...i.'-.. ,-.. .:I' M __S ds s d= t< w~ .AtSa--Or.. y However, this charv-er could review cases al- leging that the Authority rmisusecd or abused its powers. Still to he resolved are several major issues-- (l) the extent to which the Seabed Chamber or an arbitral tribunal would be entitled to review any abuse of regulatory or discretionary powers exercised by the Authority, (21 ,,.ether coMn- mercial arbitration would be available as an alterrnative method for handling cisputes cur- 'entry considered under the jurisdiction of the Seabed Disp~utes Chamber;, and (3) how that Chamber would be constituted. (See pp. 9 t o 11.) OUTTER L IM IT OF CONT INENTAL SHELF F.. ~~~ There is a widespread acreement on a 200-mile economic zone where coastal. states would have certain exclusive rights, but opinions differ as to what the boundaries of the outer limit of the continental shelf beyond 200 miles should be. The so-called Irish fr la had broad support (includinq ... but a distance formula proposed by the Russian delegation and supported by than East Europeans and Cuba during the 1978 Geneva conference session made it impossible to reach agreement on this issue during the 1978 sessions. (See pp. 24 to 27.) MARINIE ENVIRONMENT The mnajo'r marine environment concern is accommo- dation of navigation and environmental inter- ests. During the 1978 sessions, as a result of ef forts by the United States, France, and Can- A ~~~ada, revised texts were proposed which would 4 ~~~(1) provide protection to endangered species and fragile ecosystems from, vessel source pol- A ~~~lution, (2) clarify the ornligatien to estab- lish ship routing systems which would protect the environ~ment, (3) require prompt notice to a coastal state of events that could re- sult in pollution of f its coasts, and (4) re- A ~~~move certain restraints on the powers of a coastal state to enforce antipollution rnea- sures in its zerritorial sea and .Economic zone. iv The U.S. delegation indicated its willingness !�~{~'~ ~ to conclude negotiations on pollution if es- :: sential amendments reported to a c,; ,tenrce committee chairman during the 1978 session By-,~ ~were retained. (See pp. 33 and 34.) SCIEN1IFIC RESEARCH The marine scientific research text provides for coastal state consent for marine scienti- fic research in the economic zone--a consent regime. During the 1978 New York session, the United States introduced a proposal which included changes to 14 articles, changes characterized by the U.S. delegation as being editorial or clarifying in nature. However, several delegations believed that certain of the proposed changes altered the fundamental character of the composite text. (See pp. 34 to 37.) OTHER ISSUES Other issues which were discussed at the 1978 conference sessions were --a revised text was agreed upon to ensure con- servation of anadromous stocks (see pp. 29); --progress was made with respect to the right of access to the living resources of the economic zone by landlocked ana geographi- cally disadvantaged states (see p. 32); --progress was made in gathering support for clarifying the article on marine mammals (see p. 29); --deadlock continued on the question of de- limitation of the exclusive economic zone and the continental shelf between adjacent and opposite states (see p. 30); and --conciliation was generally agreed upon as . .. . :14 a method to aid in resolving fisheries disputes (see p. 30). Tear Sheet V [ I DOMESTIC IMPLICATIONS Increased foreign fishing off the U.S. coast : and the slow progress of the Law of the Sea conference caused the Congress to take action -? to enact the Fishery Conservation and Manage- ment Act of 1976 to conserve and manage fish 4 stocks within 200 miles of the United States. - (See p. 29.) t/ Extension of the territorial sea from 3 to 12 miles pursuant to a Law of the Sea treaty may ? create disputes between U.S. Federal and State jurisdictions. (See pp. 31 and 32.) AGENCY COMMENTS '-;-nI Representatives of the Office of the Law of the cea 'e:entiationq, Department of Scate, reviewed a draft of GAO's report. Their com- ments were considered in the preparation of the report. [1,?~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. vi,� _�L �� ''r;:~r7;'~P4-I1'""~"~~�-~P"?3r. f~fErr p-A ^_ :, 5 -q . 4~~~~~~~~~~~~:7 22-21-Af.27Mi -- ~'~�~~~~-~.~~ P a ~ ~~~~~~~~age CAP o n t e R t - i l INT RODUCT'ION 1 4:~?. 1977 New York session 2 1978 Geneva and New York session 3 U.S. interests 3 Scope of review 4 2 DEEP SEABED ISSUES--COMMITTEE I 5 International Seabed Authority 6 ~-;-.~ Dispute settlement 9 Obligations of private/state k:~:-?~ contractors to the Authority 12 i Financial structure of the Authority/ Enterprise system 20 . Domestic legislation 22 3 GErNERAL ISSUES--COMMITTEE II 24 Economic zone 24 4" Fisheries 27 Dispute settlement 30 Territorial sea and straits 31 .- : Landlocked and geographically disad- vantaged states 32 4 MAR.:NE ENVIRONMENT AND SCIENTIFIC RESEARCH a~-:<- ISSUES--COMMITTEE III 33 RF~-' Ti:-~ Marine environment 33 Marine scientific research 34 A APPENDIX A1 Letter dated November 17, 1977, from House CommitLec on Merchant Marine and Fisher- t1 ies 383r : . : :.:;:::~ II Related GAO reports 39 III Powers and functions of the Assembly 41 IV Co,iposition and voting of the Council 43 V Status of proposed contractor fees 45 " '.r'-," "S L z~ '- ABBREVIATIONS GAO General Accounting Office G-77 Group of 77 I C'NT Informal Composite Negotiating Text P~ 1 q* I4`,R <T'X:R I 0 N Since 1958 the Unitti d Nations has convnetl three law oof I'-.'.-.- t S- u. councrences in an attempt to codify national acticts <%:::%u l-r,:arlino th: oceans and to establish an internatio;:.-. oceans ;:.: ,:,~, rejl-t: compi,tible with a c.a.nging international political i,:;;~':- In 1958 the first U.N. Conference on the Law of the Sea, r)articipated in by 86 nations, adopted a series of four con- ventions: the (I) Convention on the Territorial Sea and the Contiguous Zone, (2) Convention on the High Seas, (3) Conven- tion of Fishinq and Conservation of the Living Resources of tte High Seas, and (4) Convention on the Continental Shelf. All except the fishing convention have achieved a recognized status in contemporary international law and have contributed to the current Law of the Sea negotiations. The 1958 Law of the Sea conference failed to reach agreement on the maximum breadth of the territorial sea, the contiguous fishing zone, and the seaward boundary of the continental shelf. This gap in conventional law, as well as the development of new tech- n1nooiy and mining expectations, has accelerated unilateral claims over offshore resources. The second conference, held in 1960, agai.n failed to ,? _---.J reach agreement on the major issues--breadth of the terri- torial sea and establishment of an adjacent fishing zone. Since the 1960 conference, technology for mining the .-:I deep seabed has been developed and the need for greater ;:<0:-.i rprotection of the marine environment has become apparent. In 1968 the United Nations established a permanent committee -~.~ ;!on the Peaceful Uses of the Seabed and the Ocean Floor Be- -;: .~ yond the Limits of National Jurisdiction (Seabed Committee), and in 1970 the Seabed Committee was given responsibility for organizing a thir. Law of the Sea conference. The third E-'.- X conference was expected to produce a comprehensive treaty covering dmong other things the territorial sea and straits, high seas, living resources, mineral resources of the con- tinental shelf and the deep seabed, protection of the marine environment, marine scientific research, and dispute settle- .- ---- Fent. The first session of the third Law of the Sea confer- ence was an organizational meeting held in New York City in !< /.~ DDecember 1973. . A ~'[3, .~ :'9 ___ s orn( bc s.,v in C r c s eeul, f o -~~t t'rc omtes. ~mitte �, the legal regime to be establish~ed for mining thec dz-ep seabed. --omittee 1I, the territorial sea, exclusive economic Zone, straits, continental margin, archipelagos, prob- lems of landlocked states, and other issues. L ~~ ---Committee 1II, marine scientific research and environ- m-ental protecticn. An informal group discussed disp~ate settlement. Although conference participants failed to agree on a negotiating text, they iJentified the major issues that were to form the basis of future discussions toward a comprehensive treaty. Cn March 6, 1975, we issued a report to the Congress on this qession, entitled "Informnation on United States Ocean Interestsi Tocjether with Positions and Results of the Law of the Soa Conf,,rence at Caracas" (ID-75-46). At the Qnd of the third session held in Geneva from M arch, 17 to May 10, 1.975, the conference President issued the Single Negotiating Text. The fourth session held in New York froom Marcii 13 to May 7, 1976, resulted in revision of this text. A fifth session was held from August 2 to September 17, 1976, ")ut little progress was made. Our re- '4 port to the Congress, entitled "Results of the Third Law of the Sea Conference 1974 to 1976" (10-77-37, June 3, 1977), discassed the outcome of negotiations as of September 17, A 1 97 6 .(See app. II for a list of all related GixO reportr..) 1977 NEW YORK SESSION A sixth session was ,eld froxn May 23 to July 15, 1977. 'Th is session produced thre Informral Composite Negotiating Text ( ICNT). hieomsutaivwork was accomplished, the session ended with strong3 concerns that -he United States and -th(--r developed nations were denied due process in the f inal wordinq of the Committee I negotiating text. The con- fc~rence aqreed to reconve~ne in Genuva from March 28 to May 12, 1978. 2 stof 1190Isus5ions at tne tvnt eSsut' :2 .:ra~q.:t: w~is uad' (CkvJ. by a 2-eklnqpo'ur1btl - * ~~t h,_ Pr~ ,h:irf th~: Con f erence woul1d be rc-- 'OCU!;(.)l s!ed on iflift-~-the first _- I i,)n m, i -xploitat ion Lol icy and technoloqy trans- '~�.";,t.'~u ocond n financia arrangements of thu pro- *i:'A reqim~2, and the third on the composition, powers,? m,; o~l Ut t I, :ti- opo')Fed Int-Lrnationua Seabed Autho it. * 2Kdel it wih reIss oa ted to the excl us ive -.~cono- i1'.C1_M iscuss,�] tihe access r ights to l ivinq resources I >~c;:eJand Qeoiraph icll iavnaed states inth ai ~ **. i..:croi zone, cind Inc- othe.r discussed diispute - - ':?t :;ocod2resin te zne-. A sixth group c~tt(_,mpted I.-,ii -f tj h. ter I T.i ts o f th1,e con t in e nta I s h .CI f a nd th e A ~ ~ ~ r~~:. ;-cr.'ments and contributions, and a sve.enth (Iroup ..l t..xt:-l.Vl inci with dQiemi~iation of maritime bound- ~1 !'Ca.5 .~nd().,.4)0 L. t tate'S. 'I 1' a:~~~ wa:; rKI ;-n':':a for 8 wjeeks and then ..~~~ . i ~-..w Y?'~- I rcm J mI( n iAdt .o)nal 4 weeks~. This sos-qf *~ ~ ~ ~ ~ ~ ~~n.-_ru poposals but no ....:.i L'~i in the! ijot ion of A7eosD i.)n. 1,-',:I.T. The -confer en ce decide-I to re~- ,,n 0 th ;!5in n Geeain March 1979. tha'?r'.teIStates! 1as a variety of interests- :nt ~ ~n; i:h ~is f'>Jmof naviuat ion and ..1~~m J:r. a. rr_ at-d rota r.iconservation and * ..'.;:;' of ~urir'! Iivi:v; '~ c s, uyportirnq coastal . r i .;,! ct. ion er ntint.arinresourc'-5 be-- ...Q i: ~wit Len~ fdr or LJune f itL of I Qv ui * ,. .~. i' s I 'sa:. i shin !c a-Binarys !r 1)olltution ,orot',c- * ~~ ~:r'>2tin-~~ a .r.-.a:. an: ou-r. n -arin scientif io V'in.-'i , - 's I i~~t-. ~ char -n th that the SiCCess Lt th .. . '~~~~~~~~~~n Jr&: i.:: t t iM,-l 1 of con 1ict V e-i '. n Ln': ~~~~~ * , . S. .rncL't irn 1 : t *** ~~ I 1~yt~ ~ 'nn which- attracts it-C jjo-i,'icL#.-, viable over the lon(I t'2 ~., C r~ooa ti t-. Just claims of the azt2- Id Wh s'IL t sho u cld en su re a c cess Thi t.. it t.- 1, 1Lua i ilk id in er s set realistic I ..~ IWI coiitr~l~ .tfld tIr."Kicial arrangjements, ' Tot traru,~~!-r ot t-t-cnolco(1y u0nd!e r fa ir t er Ms C~ :VI t. (fl a nd 'ju admr.inris ter ed, 'y an i ntvrna- t I I' Od VW.' -ji _ 1 , (h i k FM dCiC) S ios n a h)as is t hadt rcofI n i:s t Lt: impor:t&nc in ter .s t s at stake in in- v'~t i. , .r-I c t ion, dtiConsuimpt ion. "?I.'.*5.2 of othe neft i t syielded by the con- 5 ~~ *rict , wL 1 If! numeIrous .and impres::.ive , would not tic *r. .~0 I.' S LIdW a us. to accept a seabed minima M . w~~ ct. does not - these Criteria. 1.1hether a ro;.is nqo tia blIe r ema inPs t o b e d et er - * : i~wcd cur-Qn~F a!- , re!;or ts on. 1'. S c),can po licy, I!. r'Tdrat ins fcr tv th ird Law olf the Sm., confer- 1.-at the Detartrntnt ot Statre, and U.S.dle- Cn .7C h (f fte 5Ss iofs. T7he review was under- -)Ut'1r' V1uriM vt.-bu rportF on tthe Law of then S~.a '1 ~~~~~r.l 2? tlF :ra-or iau~ t the_ close of th,, se.venth - .~.niJf*'. U.S. adv isor", comi e ee i e ore, an,:~~~Ir t ter the sv en th session arc] int rviewed se-veral ~~ ~in addi t ion, we monitored both the Geneva Y(,)rY -. mf?(tinqjs of the seventh session. it- v r,:7-nts wereo n ot r eq ues ted from t he COff i ce o f ..w 't t! ( Sted Necqotiat ions, Df_,patmn of State, b'ut It -i (~i5(v5ss this repI:rt with off icialc of that office s i ocredthe.ir c-)rr.-nt s in its pre parat ion. 4~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 -I W -FPTZ7.- -n DFFP SEABED IUS-CMrE AoSSLred access. to minteral resources of the deep st jibedt for ~r'ivate contractors or states parties under reasonable 73 terms PIand conditions is central to t-.e success of a future z F - I ~t Vt-,at. A system o f f inanc ialI a r tancemen ts wh i ch does nut- create hurdens for prospective ocean miners is a ba s iC re4!- quirtement. (:nless th*ese conditions are met, t he trLa tyv di s- c u ssions s ta nd 1. it t Ie chancre o t success.A .S. dependence upon t ore iqn sources o f raw materials has ')een a constant concern in Government and academic circles 'f(r some years. Therefore, access to a secure and affordanle scurcu of raw materials is fundamental to the stability of an industrial societv and rakes deep seabed mininq such an 4. al4important issue. Thei combination of virtually -inexhaustible ouantities. of raw atrlsand the technoloqical ability to re.,t rieve~ and use them in an econo-mically competitive manner make the: oceans an extremely attractive source of futureJ minealsupplies. I,' ni'e(j States and its industrialized allies finds . t ;s it) i Ii y' of reducinmi their dc-pendence on lim it~ed n u:. *ts ot toroiq i';rources for comnod it ies attract ive and, inr- ri.e,_r-ccssary to ensure their economic stability, hut they - :~~~~~~;omp~rise only a iew voices in the clobal community. Of the 1156 national entities in attenlance at the Law of the Sea conffertnce, 119 Care dJevelopi ng nations. in a 1967 statement at the United !-ations, Ambassador Pardo ot. Malta proposed that Eeabed rjresources be regarded �sthe "common heritage of rankind" and that this area not Le subjuct to natiornal appropriation. Two years later the Ge.neral Assembly passed tht- Moratorium on Seabed Exploration an Ex plo i tat i on (e solIu t i on 2 574 - D ,XX IV)) w hi ch c allIe d on all states to retrain from seabed resource exploitation -A ~~until the establishment of an international seabed reqirne which wouid administer the area in the interest of all man- 14~k i nd. h General Asserrbly Declaration of General Princiipl.*s, on t1-e Seabed (Resolution 2749 (X),adopted in 1970, e~n.- d i-r r ( th commo n h .r i t aq ~r inc ip -L1c ut i nclIud d no def,'i n i- t ion ot theF area itself. The United States and many other niat ions ot~posed the Moratorium. Resolution. T'he common heritage concept, ho-..ever, has wide suLrrort amonq Loth cievelopirc. and de-velcLed natlions, includinq the- !-jtd S1;tates. However, th: interi retat ions which thc-Fe r routs hav of t h is r i nc ip~ 1,di if ter r a r k dl y . The (IOvClouc-d nations feel that free and open exploitation of the seabeds, so long as territorial sovereignty is not claimed, is in the ~I. X -2 interest of all nations and allowable under both the common .!:i:- _heritage principle and the traditional doctrine of freedom of the high seas. The developing nations, however, lean to- ward a more strict interpretation of the term "common herit- --A -a age of mankind" to mean that individual states are barred from exploiting mankind's possession unless it is conducted i 9 - .::i: under the auspices of a generally accepted international re- i'.:.- gime. Despite these differing interpretations, the principle 4 .:':i itself has been the chief impetus behind efforts to establish an International Seabed Authority to administer the "common _5 - {~heritage" in the interest of all mankind. - ;t INTERNATICNAL SEABED AUTHORITY The International Seabed Authority would be composed of a supreme body known as the Assembly, an executive arm known as the Council with subsidiary specialized organs, and an i . --a operating arm known as the Enterprise. In addition the Au- thority would have a Secretariat, to handle administrative ; i iaatters, and a Seabed Disputes Chamber, which would have ju- dicial power over individual cases between states or between I- nation dn(d the Authority. . INTERNATIONAL SEABED AUTHORITY A ;,| ASSfXBLY r i".~~-.d~~~~~~~~~~ Xart 1b7 end 158, ICNT) e SE~ntT~"c~fr 65 a~ld E, i E-TiA; $E;e: SE- U T a:~ IA T || SEABED DISPUTES CHAMBER < at 16;an'd 167 ;INN CHABER (art 1574101 and 187-1921CNT) ENTERPR- COUNCIL lart 163. 159. :'-;:- 1('art 169 ICNT) i161, ICNT) f; . a | 1X ECONOMIC PLANI- LEGAL & T:CHNIAL N-IN( CO'S1'115510N COMt'.:SSION (art 162, iCNTl Jt 163. 164. ICNTi 6 .: ;: ,.f'. '.,. o- .'-a. .. I -i -Y ,- :The Assembly A._:.-, The Assembly would establish the q;eneral policies for - tl:-:] d.teturmininq the rights and duties ot states in areas beyond ndtional jurisdiction, includinq (1) electin rerbers o : ' various authority bodies, (2) establiishing subisidiary organs, (3) conS;iderinq protblems related to r,:source exploitat ion in te area, and (4) ensurinc fair dciistribution of economic ben- cut.ts.t derived from activities in the area. (See app. Il].) Authority members would have one representative in the . Assembly, and determinations would be made under a one- nation, one-vote concept. It is precisely this voting ar- ranr.ement that is disturbing to the United States, because - 2 control over Assembly actions would be in the hands of a two-thirds majority of nations--a majority which would prob- ably consist of nations who consider themselves members of the Third World. This eventuality creates the possibility . tat actions of the Authority may steer guidelines, as set forth in the treaty, toward actions which the United States n ay consider to be inimical to its interest. In the Assembly, it would be difficult, owing to the sh s.eer number of developing countries, to mobilize enough -.::u.tport on key issues t,, allow effective U.S. action, and -- t', 'ltnted States woIul d have to look elsewhere within the .,---= ,Autlhhority to, hilVe its voice heard. The Council As the executive body of the international seabed re- ' '(mlre, the Council would establish specific policies on Activ- :- ~: ::-.:~ lties in the area under international jurisdiction in con- formity with the treaty and general policy guidelines adopted - ':L.: ' !by the supreme organ of the Authority, the Assembly. The ICNT provides for three subsidiary organs of the ::q Council--the Economic Planning Commission, the Technical Com.ission, and the Rules and Regulations Commission. Dur- irng the 1978 New York session, it was proposed that the - Rules and Regulations Commission and the Technical Commis- sion he merged into a Legal and Technical Commission. The Council would play a critical role in reutlating . i.':.~ tite activities of contractors in the area uLndFr international . :- urisdiction As a prereuisite for a contract eithf:r to -: , . xplore or exploit seahed resources, a contractor would file - with the Council a dtailed plan of work describing his pro- , r:'3 -rposed operations. Tht-: Council would then forward the plan ,L --:t to the Legal and Technical Commission for its review. Council *:.1_4 ? -: .; E r : s :~ %u,,A.,.? . . - . . . , ; , : _ - ,_ ::! i? i, ' : decisicrs may be considerably influenced by the conclusions of the Ltual and Technical Commission. For this rea- son, -.e re was much concern about the possibility that this Commisslon wcould become a political, executive entity rather . thlan an advisory, technical body. The Council would, how- ever, :-e the final aro;ter of contractor plans. If the plan ,7-;;. is re-ected, all contractor activities must cease. If it is not re'ected within 60 days, it is considered approved. T n- cor:-.osition and voting procedures of the Council would therefore b-e critical in determining the types of ac- t iv te s that ma.Ta De undertaken by contractors. As outlined in t ._ I CNT, the Council would be composed of 36 members d rawn .ronr sveral interest groups--seabed miners, major im- rortt-rs of minerals found in nodules, major exporters of such -t.<,g rAinerAas, and developing countries--as well as regional repre- sentatives. isee app. IV.) The ICNT provides that a three- tourths ma)ority be required for Council decisions. : .0e deve lc:iny countries consider the Council's role to - r, erelv to .:...lement Assembly policies; i.e., to rule on j. .A .day-to-day matters. Thus, the primary direction of the mem- bers would be to carry out Assembly policies and only second- arilt would it represent particular economic and regional in- t-:rts. The developed nations, on the other hand, look to ">-.~ t! ._t .. I.ncil to counterbalance the Assembly by representing t,. i:uC,.er and conrsumer, as well as regional interests. For .s tnis reason, tthe United States and other Western nations , -' have introduced weiuhted voting proposals. Instead of re- >:J-' cjiqutiring a three-fourths overall majority, the United States :ro.osed that Council decisions require concurrent simple . a:orities in 3 of the 4 special-interest categories or 4 of the 5 total categories. The proposal, however, was re;ected bv the developing nations who considered the prin- ci ;e ot weighted voting discriminatory arnd recommended in- stead that the requirement be reduced to a two-thirds or ' >--.-=:~z simple cajoritv. Assuming an overall majority of one kind F -';-'<dor another is the requirement adopted, the United States and ] : other develoed nations would be confined to blocking actions for their voice to be heard. Further negotiations will be reouired to resolve this issue. Th.e Fnterprise h_'. i:nterz.rise, as envisioned in the ICNT, would under- "." tu;:e cmmtercla . expjoitation in a manner similar to that of :' riva-te corporations or states rarties. Partially explored rx.lnesltes would Le given to the Enterprise and it would re- ce ive *chnclov(/, transferred at a fair market price, to re nl'C to eriter .into production and to compete effectively. z -n W i . I t. , _ E m F & _ _ T _ _ --=--5 -<_rv .,. -Ja- w j i: R: sT'i 1! . . . . X:-~ Financing would be made available to the Enterprise, either directly or through the Authority, to allow it to enter into production at an early date. --T2:~ The primary concern of the United States is to ensure creation of a parallel system of access to the deep seabed which would make exploitation of seabed resources economi- cally feasible for both private contractors and the Enter- '4 prise. Under the iCNT, for each identified minesite to be exploited by public or private entities sponsored by states, one minesite of equal potential must be made available for exploitation by the Enterprise. The Authority could also turn over one of these "banked" minesites to developing na- tions for exploitation. Thus, seabed resource exploitation i would be open to private contractors and individual states as well as the Enterprise. t e Secretariat The Secretariat will consist of a Secretary-General and staff as required to carry out administrative functions as- : signed by the Authority and its subsidiary bodies. The Secretary-General will be appointed by the Assembly upon ricommnendations of the Council, and the staff will be ap- pointed by the Secretary-Ceneral. The ]CNT provides that the Secretary-General and staff would be totally international in character, responsible only to the needs and direction of the Authority. They would t' , be prohibited from having any financial interest in the ex- ..i:~. .iproration and exploitation of the deep seabed and forbidden d..'-~ to disclose industrial secrets or proprietary information. --:-I The Secretary-General, with approval of the Council, could ' ---!; consult and cooperate with nongovernmental organizations. - ::A DISPUTE SETTLEMENT Under the ICNT, disputes about interpretation or ap- plicability of treaty provisions could be settled by any peaceful means. In addition to referral to the International i Court of Justice for disputes between states, three other methods of settling disputes would be established--a Law of ; the Sea Tribunal, including a Seabed Disputes Chamber, an -i {ia .arbitration tribunal and a special arbitral tribunal composed 1)f expe#rts for particular dispute categories. Conciliation ' rocedures may also be used if aoreed to by both parties. :j The partics to a dispute are obliqate:] to seek some peaceful .m means for dispute settlement, but the method selected depends ' :1 ,on both the type of judicial issue involved and the preference -1- ' ot the parties. 5: r:. , ,: isi �t ' j L~ A 0 --Law of the Sea Tribunal. Composed of 21 members elected for 9-year terms by secret ballot of parties to the treaty, the Law of the Sea Tribunal would have jurisdiction over all disputes submitted to it either under the treaty or by other international agreements giving it jurisdiction. No two members may be na- tionals of the same state, and at least three members from each geographical area as established by the U.N. General Assembly must be represented on the Tri- bunal. The decisions of this Tribunal would be final and binding between parties of the particular dispute. The Tribunal could also establish special chambers, 'A':4. of three or more members, to deal with particular types of disputes. --Arbitration procedures. If both parties have not ac- cepted the same settlement procedure, disputes must be submitted to arbitration unless the parties agree to sor:e other procedure. An arbitration tribunal nor- ! . mally would include five members, one to be selected - by each party to the dispute and the other three to be appointed by both parties from nationals of other states. Arbitration decisions would be made by major- ity vote and would be final and binding on the two i~?~:~ parties, unless they agree in advance to a right of appeal. --Special arbitration procedures. These can be used in cases of disputes relating to application of treaty -3 provisions to fisheries; protection of the marine en- :i vironment; marine scientific research; and navigation, including pollution from vessels. Under these proce- dures a five-member tribunal of experts would arbi- :A trate the dispute and reach a binding settlement. This tribunal may also conduct a factfinding investi- gation and make recommendations which would not have the force of a decision but would be the basis for a review of the disputed issues. These dispute settlement procedures would be more limited X in cases related to exercise by coastal states of their sover- eign rights. In such cases, the aggrieved party would first have to establish that the claim is "well-founded" and not "frivolous or vexatious" and the other party would have to be notitied. If these conditions are fulfilled, the court or tribunal would have jurisdiction over allegations that the coastal state exceeded its discretion and contravened (1) treaty provisions on freedom and rights of navigation, over- flight, or layinq of surbmarine catbles, (2) other treaty provi- sions, national l1w or international law, or (3) specified ..- I S 1b .~~~~~~Z inrernational rules related to preservation of the marine environment. In addition, dispute settlement procedures i ; would be applied to disputes related to use of living re- i^i~ sources or marine scientific research in the economic zone -MT or continental shelf area only under very limited circum- stances. (See chs. 3 and 4.) Seabed Disputes Chamber i ~'-.~:~' To handle seabed mining disputes, the ICNT would estab- lish the Seabed Disputes Chamber, which would consist of 11 members selected by a two-thirds vote of the Assembly from -! among the members of the Tribunal. The ICNT also calls on 3 the Assembly to ensure that the Chamber has "equitable qeo- i ! grapn-ical distribution" and is representative of the major - 4 legal systems of the world. i This Chamber would have jurisdiction over disputes be- tween the Authority and states parties or private miners in- i volving (1) disputes relating to the conduct of activities or t.e (granting of a contract to undertake any mining opera- I tions in the internationally governed area, (2) allegations . that decisions made by the Assembly or the Council, or its O,(t rq.s, violated the treaty regulations or represented a l'- ml:;t1.; ot its:; power, (3) interpretation or application of ] -f; cc,)ntract.; concer-ninq activities in the internationally governed urea, (4) alleged violations by states of treaty [Erovisions, (5) suspension of states for alleged gross viola- t'~3 tions ot treaty provisions, and (6) alleged revelation of - i P roprietary information by members of the international - Secretariat. In the case of disputes between two states, this Chamber would generally have jurisdiction over the application or in- terpretation of treaty provisions or contracts concerned with activities conducted in the area under international juris- d- diction. Decisions of the Chamber would be enforceable in national territories. The Chamber would handle all disputes ;ith the Authority unless the parties agree to refer the case to binding arbitration. In disputes between states parties and/or private miners where the Authority is not involved, however, any party could require binding arbitration rather than a ruling of the Chamber. A separate ICNT provision re- quires binding arbitration for disputes about the contrac- trs' transfer-of-t(echnolocy obligation though modifiications : rorhe bLinq considered. (See pp. 16 to 18.) i . .~ ' .~3 7~~~~~~~~~~~~~~~13 $ j~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ r- -,A ~ ~ ~ ~ ~ ~ _ Althoucjb the Sealbed Disputes Chamber appears to provide a system. of judicial review and dispute settlement, its pow- er wc be Ili;,i t ed 11y a n ICNT ar t i cle crov i di nc tat it co ulId r.ot ch alle C.nae "eq i slIa t i v ( a nd di s cr et ion a ry a ct s o E area!the Assembly or Council and could not de_-termine wljethetr A~s- ScrnblIy rules, reg-ulations, or procedures conform to treaty p)r ov i sio ns. Tht: Chaml-er would, however, have jurisdiction over individual com-plaints that Assembly organs abused their powers or violated treaty regulations in particular cases a nd coul1.d ref use to gji ve them e ff ect. The limitations on t he C ha.-I,.E.,rs u ri sdi ct io nalI authority arc- still unclear. Still to be resolved are several major issues--(I) whetner the Seabed Disputes Chamber or an arbitral tribunal Would be ent-.tled to review any abuse of regulatory or dis- crc-tionary powers exe.rcised by the Authority, (2) wh-ether comwercial arbitratiorn would' be available as an alternative Method tor handlinq disp~utes arising from contracts with the Authority in cases where the parties did not agree on another methoo, and (3) now that Chamber would be constitutted. These questions remain to be resolved at later sessions. 0___ IGAT lDN'S OE F PR 1VAT1F',/'STAT COiNTRACTORS -1: 1 Il I TOP IT? TL~cm~tr:nc'ds cin.-tructed, a very elaborate system of ,.I ila ~of;,!i! ut orparties interested in exploit- ino he f_-.;ouct_, oftheseabeds. The stalted purpose L~~~ ~eerqie7nsi oesr reve-nues for the Authority, whie nt dterinqinvstmntencouraged contractors to und~rtk,~ Jont entres an enblethe Enterprise to begin operation. T he siftu of access to mineral resources is closely related to0 the question of the net effects these obl i- gations will have upon the ability of potential ocean miners to optrate effectively in then area. These obligations fall under three ceneral headings: monetary payments, technology transfer, and production restraints, h ytm r he Monetary' pavrents The system of payments is the most elaborate of the various obligations to which contractor-s interested in ocean mining will be subject. Included in th ytm r ht cat.egories of payments. The status of th~e proposed contrac- tor fee-s at the c lose of the 1978 'New York coniler(.nce ses--sion drk. included in ao;:endix V. A .-I ct i on IeeA A : t* to (c. I '*m i rjimi ist ra t iv e c o st of ;r c, si n a an a V1, L icltliun W")UiJ II,- chi-ip~j.d by the, Authority at tl:(: tin dfl .4~~~~~~~~~~~� w-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ app;lication for a contract was lodqcd. Fee size is nti I I. .<M.:'-~ deter.ined , but amounts proposed have rangecd trot a low of f - : $100,000 to a high of $5%L,000. Annual fixed charge to mine, or bonus payrment i~, This fee is a payment for a contractor's right to mine and is payable for the first 3 years after a contract is signed. Although some delegations consider the fee a way . to prevent contractors from delaying the start of operations, the developing countries see it as an early source of revenue - for the Authority. The industrialized countries are opposed to the annual fixed charge and argue that (1) it is not nec- essary to have a deterrent against delay because the con- tractor has a very strong economic incentive to commence pro- i duction as soon as possible and (2) the charge increases the contractor's financial burden at the beginning of his opera- tions when he can least afford it. As a compromise, the Chairman of the negotiating group proposed that this annual fixed fee be considered a development cost if it is incurred prior to production or an operation cost if incurred after ' . production. Product ion charge G�Once coperations begin, the contractor must make addi- ticnal tinancial payments based on a proportion of production. o accommodate the different economic and social systems ot - . ;emers, two systems of payment have been proposed--one a con- stant annual production charge and the other a combination ot a nominal royalty charge plus profit sharing. Contrac- tors will have the right to choose the formula. The Soviet ' iV I_'n U nion, Canada, and Australia favor the first system; whereas the United States, the European Economic Community, and Japan 1.refer the second. The Group of 77 (G-77), made up of 119 .; developing Third ';orld nations that adopted unified positions - on certain international issues, appeared to have no prefer- ence so long as large amounts of income were generated. At!- ' thcough there is considerable uncertainty about the particulat level of production charges, the two systems are designed to require equivalent payments to the Authority. System 1--Under the first system, contractors would p:a' the Authority a production charge, computed as a proFortion 2-' . of the processed metals produced from nodules extracted frs: ii.'~' the area under contract from the Authority. To accommodate .status with nonconvertible currency, these payrients could be f inade eithur in currency--the amount computed as a percent of : the ,rocessecld .rFtals' market value--or in kind--a charge di<- i-id tettrmrind as a proportion ofr the amount h roducct. Anccord i r.( p.-' L~~~~~~~~~~~~~~~~~~~~~~~~rn 1~~~~~~~~~~~~~~~~~~~~~~~~- - -. to, tt;e latest negotiating proposal, contractors opting for a P-,, pruduction charq.u would away 7.5 percent of the market value of the Urocessed rtetals during the f irst 6 years of coctmer- K ~~cial prod uction., 10 percent during the next 6 years, and 1.4 1,ercent frLM the 10th to the 20th year. w Svtrr 2--Under the second system, contractors would pay t~t Autll~oriLy a no-inal royalty charge and a share of the 3 protits associated with the mining operations. If the con- tractor selects this system, the contractor would be required to pay a royalty charge of 2 percent of the processed metals' marke, value in the first 6 years, 4 percent in the next 6 years, and 6 p'ercent up to the 20th year along with a share of the zrot its associated with the mining operations. This o` ne-t ~rocee(:.; would similarly increase from 40 percent (fur inc. h first 6 year.; of production to 70 percent in the . A next 6 and 80 percent trcm the 13th to the 20th year. These 7 ~~increas(_s, however, would be contingent upon the contractor's ro-couui-ing his initial C'-'.elopment costs during the first 6 ye-ars ot preduction and twice those costs by the 12th year. -it'. t-is Safecuard mecharnism, neither the production nor 3 t t. tt rotit-sharing charges would increase until the contrac- tor's operaticns had become economically viable. Once the '1 ~(l.",tractot-'s develorzment costs are recouped, however, these charles, wr),ld be scheduled to increase on the assumption tha. ~nic1 ~raios would become increasingly efficient L~~r;~~~~.~ nt tai in laer y e ars . f~'1;inl; and developed nations differ about how to ~'t.~r't:n u t,u r-)jortion of profits attributable to seabed r.L~dierloldtim. he developinq nations contend thatJ tHr,_1 f-S n r InQC~ cha rg e s houlId be Ilev ied on the prof it s acuitedwit,. the entire mining operation from extraction to inal rossing on ther words, the share of net pro- cc.-~ woulul Le a proport-ion of the profits of the processed met-a 1 . ~.-v e oe d ntoson the other hand, contend that th.e share of prof its attributable to the contracted mining should be limtited to the mining operation itself because V.>. ~transportation., processing, and marketing would already be suspect to national taxation. They therefore recommend that t 1 jru. t~h,,rnqcharge beapplied to he imputed value o: he, raw o)rL as it is brought to the surface. Concerned C. uct~tn~a, t.Lt 1978 conference were not able to estab- _r-,wLm to ofetrr'ings. the imputed value of the raw ore, so :~r tt.,!r wt .io is requited. (,!c,:iir-..�n rof the conf"erence financial arranqements n ~t. Iit 1, .1 r' Miot]. ned the advantages and disadvantages r~t.h. twt? 5V.tO A 3follows. 14 t nA q I% . I A-I t,. * t * 1-1~~~~~~~~~ ~ It t*Ir A:~ '* lo - Qn A . --I I n t. A I I t t W I I I cut F d~~~~~t-12, I'l 1. C.-4 .4 '44'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o ".09 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ., . - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - Tsi.: t.r -.'sen t a ref irnem(rnt. f)f ~-hs! - . . *~~~~.. . . r... vi ~ 41-.work, taor determining contraQ-tor C)!,i i- o~1J L. t-d w ~. i c . c I .db be te hbasi s o"' con scn- ~~~~~~ :trn ,a r tu1a rlIv d i ffic vlIt to r esolIv t- - a v; c unrc*-r ra in t i es abovt thme eoconom-,i Cs A. t i~. ~ an and partly because of the . .n~~~~~~~~- rCi r,. f2 iot t h e r es p ect iv e r~C 10r 1i..~ ~irtrdtK':;and the Fnte.rprise. 7. . , ... . - ... . .~~~~~~~ct~~r~~ w-uld also he obligat - to * . ...~~~~~~~~~ LI. ..wI .- r d:i~e t o s elIl that t ech- * .. . . . ~~~~. * ~~~ ~n It.-Ir rd reasonable terms. if . .* A .. ..: rt Lanac i, r~ in areasonanle time, -**~ .. .....~. . .. ti; a r t ma t iorb. The ALuthur- * . , . * . . *,~t t r. :Cr.rac k: - t5 or 11-pose arprpt-r jat(. t,- iwh Jt. im, lem~ent aL~bitral cre- .~~~~~~I ... *.t 42r t~pr i se opera-ic.ns, the *..~~~~fw. I I ri t litthat mnin inq corr.Lan ic2s .. .: A' A rIc~:i ;.- i,;,)t i-n to sell. ti-chnolnqy to ..~~~ .*r~~~~~ m.~~~irT f~i tol lowing (:xruni, how . ... . . *. ~~~ tL o,"r LL cliff ieulties in - * ~* L;~' ~y crtrc~orWould hJ've aVaila":IQ .~~~~~~~ Iw . .. *x, r'ot have inventE-d :. I1 F1: f+* r. a I i C ns.ee- f role 9 wv..~~~. r , ~~~ r .r t:: olt LY: uipm~ent or tech- ~v'. L'>'*rr :jr~L.~.ifvrom otblers. On e isV ~~~, ~~ ..:1~~.:j~~,--: ths i s p urel-y j;,c; r~Lt r.QtI.) who uses a suc- ., . .~5J.F'~ .V , coupled with an ~.* ,7 ~~acV to a suction . ,...,. t:. . i ':-n- -- thaentho rnf ac-s I~~~~~~~~t~~~ t I i3 .tI t 1; 3i th n le 5 . . ..~~~~~~ ~~ .:~~ a C~ t .)1t1cs, las C- I .'riS I.' I tI L.: rau-:r of confl1 .0 .~~~~~~~~~~~~~m .'2-4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- iriir i 7%c; th (iieva vi~t.:.t i ntl , a solIut i ov; t C t h i s t H dii A~. Cro Qd~ T 1eu c t) "t r, t Ct or woulId onr, :. obLIi ( a~ f_. tA 's.: ~~~J~ v~ Itt.r :;a 1- t ci~t t t-chnoou ',,O(-. C e ie:. ' III teCa!;e Q () othe..r tv-ct'nulo�3y whicr. 1:e p. s to usc cun~~~~~~ft ruI' " ;ldie olIl i q a itd t o f acj ita tc its L~xziy i I .11.il I I)i Iity I rom~f tije_ ti tlui~oldu' bfre uIn Aro ither *S. cricer n about the technol ociv tt-mis-Itor I i'~:ti~flWCiF tjhZlt ACCuS.S to) deep -,TCinTinlf(; would L t cn-, t i :1 tt on( iI jc J Ii I ( provisions for transtilr on fair on,, *'j~~onjtjlIe t L-r II - in1 the miu contract, with the ;si,-i Ii it.. t h; t the Aut~hor ity m.iqh tini tuo terms unackct4ptat'lv toC C';fltt actor. To all1evijatu these proble-ms, thoL cha Ir:im. ot c A tl~.- n,_,ot i atinu qlroul, in Gt.neva proixoseti that th e:s t'*csr~c~or~vt r~nst ~*r e nitiaotiated only at ttr conclus in ot t. ii nq contract and that compensatiu '-u he ased C). dir -~~ - ~ ~ T~~hd.r the IC:NT, it tht- vartic-s could not aorFt. to tterm',s,, he case would tne ru: edto bind inq a rb itrat ion. I`t h '5 uctot (.',its not comply with the arhitral def-cision, h' i~rt ruct. coul-l hf re~voke. TleT~i e States considters Li, is 4,11,11tv trio ( vr* and wants to s'p-acrate contract valIir1 iltv !1( . ,-i. iq t rinslfur o[A i,-. -ioLIcn. Lu r i nq t he_ G�(.'-la ion, hw'v'~r , t Wo pr~sI thaItt b ind inq a r 1i tra L n ()0o tr 'tLit L11211 tha u~~i'mt ut., LinI I i ki-1 [r Ot'- xii. 's 1 d or I he'.r t I* 01 i1) u t 2's , tho- Genev:a ro !Sa L rin; ot sp1cc it'. thf- Li~ncin~i arbitration '.'roc(_dur'*F tO ' (dlwed .( Als-o , the- contractor's, obl ici'at Ion woul fII tu- iIll -d -w-;tn r (ta sono cttr was nueto the F.nt-r,,rise :1 hev'r tuswould not hav,_ to re-ach a~greement. ,,nothe-r controv.-ersial ILssue is the t-ransfer of techno- >JeIV~~( to voevelopi nq cotintr irs. Th C~ rovide that. the- I I t r r is .9 c on d uct jnt ven tu res with contractors, it sr op r i te u I rov i sin * for participation fro~r de-A I('o Iq conris 9Co. no cc tenin by the Au thor itv. In :I u t-ln IC,"T cill s I or mesrsto ensure that pe, .-I('n- r m .v - I r) rcr iev ino qcountr i,.s wouL.i be trained in mpar inf_ s~cienc(:s and tf_-:lnoiouly. iur inq tl-e 1978 Genev~a sessiorx, Bra r use tha cotatr ue obl inated to make tht:i ir tecrr~r lo:V iirxct lv available not fonly to the Fnlterpr iF:-_ ;'it *i s( tir d ''i nn country in, iart ic ular Ci rcunst zrces. 1 4 iv:l: n;cos vp ne toeroi on its own h sItII F I I'rrs "'rijno to) the contrIaCtor'S protosid ito, I...-LLfcot i-rto 7(el its tCIo('. hi' ,) I 'Os irw ).;,st II- - - - , ~~~~~~ ~~ ~ ~~~~~- -,- - I Tt Certain fundamental concepts of the ICNT remained un- changed during the seventh session though some significant modifications were proposed. First, making the technology available for sale would remain obligatory and not volun- -'.-. tary on the part of the .miner. Second, disputes about whether the miner had discharged this obligation could be - referred to binding arbitration if conciliation negotiations 4 '-tfailed to produce a settlement and if one of the parties selected this method. Third, the obligation would extend only to technology used in mining and not to subsequent stages, such as processing. t.'co Production restraints The third major obligation for ocean miners would be to -.'~.-- conform to production ceilings included in the treaty text. The ICNT calls for the Authority to adopt policies to ensure the "crowth, efficiency and stability of [commodity] mar- s.a Sets," as well as increase the opportunities of all states, part cularly developing countries, to mine seabed deposits. The Authority is a'so to attempt to ensure "just, stable: A-.-' and remunerative prices," for raw materials produced froL.-. seabed mining in the internationally controlled area. At thue ,;ame time, the Authority is to adopt measures to pro- tect (.,vecloi:nq countries, which produce minerals to be , [t found in manl,,nes;e ndulls, from suffering adverse effects .- from the in:tiat.niii ot ocean mining. Thus, the Authority is to attempt to ensur,- prices of mined commodities that A would be "remunerative to producers and fair to consumers." To carry out these multiple objectives, the ICNT pro- poses that mineral production from nodules mined in the international area be limitedi to the total projected cumula- tive growth of world nickel demand in the first 7 years of ? D':i production and in success ve years be limited to not more than 60 percent of that growth annually unless or until al- :.- ~~:!~i ternative international commodity agreements are reached. The ICNT includes a proposed formula for calculating the . projected increase in world nickel demand durinq the first 5 years of production, which would then be adjusted every . 5 years on the basis of the most recent data available. . ",~ . ~ Even though the number of nickel-producing developing nations is small, the G-77 has adopted the position that i ' roduction restraints are necessary. During the 1978 Geneva session, the United States, one of the major nickel consumers, ... ,neqotiated adc r,-tt.-rendum 1/ an alternative formula with the . Car.ad ians, on+: of the njalor producers that heo[e to protct I1 To e dtierr:l ta r t ut , uI:;equent ittention . 18 i '-----�~~~~~~~&~: and preserve the Lresent -nd utture inv-:.tments of land- based nickei producers from sea'ed mining competition. The United States and Canada hoped to produce a clearer technical framework for calculatlnu production li=.itations by adopting a formula covering the expected 20-year life of a mining opera- tion. Under standard assumpt:ons, this propcsail calls for a production limit of 60 to 70 percent of the projected growth in the world nickel market during the first 20 years of sea- bed mining; i.e., through the turn of the century. It also specifies how the data would be compiled and how the growth rate would be calculated. These production restraint formulas have been criti- cized for a variety of reasons. In the case of seabed mininq, the proposed formulas are based on projected nickel demand despite the fact that seabed manganese nodules con- tain several other metals, such as copper and cobalt, whose m arkets would also be affected. Moreover, developing reason- L' able production ceilings requires accurate projections of future growth rates in nickel demand, which are particularly difficult to calculate in the traditionally unpredictable mineral industry./market. n any given year, a scarcity of minesites to be made avaLlable could develop because under any production re- .;traint for..uia less than 100 percent of the growth rate could prove to be too limited to meet the demand for mine- :,^-T:f sites. To ensure a site, contractors could develop their >- mines prematurely in order to place an early bid. Or, tne A':-- Authority could adopt some for- of national quota system - in awarding contracts to allocate the incremental growth. A variety of quota systems were discussed near the end of the 1978 N;ew York session. It is also possible that pressure would oeveloD to allow the Fnterprise to auto- : matically retain cne-halt of the growth segment for its i,~ : v own operations because under the parallel system, the A' uthority would retain half of the sites for which miners have requested contracts for development. It is not yet clear whether any production limit formula would apply .:-7~ 7to Enter`rise operations. Any production limit would introduce a large degree of artificiality into thed economics of ocean mining and would i :.: ~make investment decisions of [otential ocean miners particu- : larly difficult. Suc.- 1'-ts also would make seabed mining ma r.ar.lnal source tocr -incrals rather than ensuring that the ! !is:ast cc.stlv mineral r.:serves are developed first. Prices for f - - t:.- :-.etals :: duc;.-d I , c.r nodu'.s couid therefore be higher i -f.ln w(U )t1.'rwks !:r' n.ecesa,', w ich could lead to in- -C[.a 2Cl I,> :: of :(ui:,t I tut. ;. S 14 7 " .,- 1 2:-i nAlthough these limitations have been defended as a way ~-~?~ to protect less developed countries, there will be no way to show that adverse effects ate due to competition from seabed minin rather than land-based production or are due to other - c conomic tactors, such as a fall in demrand. Moreover, there is no r;eson to assume that the nickel miners of developing nations would necessarily have the highest costs. Finally, the limitations could not protect these few developing na- t'.... tions trom their industrialized land-based competitors and could exacerbate the market situation of both developed and ': , dlev'elojping nations by encouraging increased use of sub- - s i t it tu c. Although generally opposed to all production restraint formulas--because markets would Ibe distorted, prices could :'':-'i increase above trends, and land-based producers would be prote-cted at the expense of most consumer nations--the ; United States has supported a concept of a ceiling because �i *:% :<of ) th..e larger U.S. interests in getting a treaty and be- cause of the larce uncertainties in judging the effects on the seabed mining regime. By supporting a ceiling, the -- .'nit.:td Stdtes has adopted a compromise position in hopes (;t nieiotiating a production control mechanism which would int r ft- with tuture seabed mining as little as possible. I.u t!,:.r fi scuss ion on this issue is likely in future ses- F I;;lANC IAI, STP.UCTURE OF THE - A;,r tKiOiY-l IY,' ENITERPR ISE SYSTEM The tollowing chart shows the financial organization &.. rl;;ot the Authority and its operating arm, the Enterprise. A source of funds for the Authority would te the pay- rants which contractors exploring or exploiting the mineral resources of the seabed must make. A second source of cap- ital would be Enterprise revenues channeled back to the Authority. Capital could also be obtained from voluntary contributions by states. A third potential source of funds would be the borrow- ing ability of the Authority. Another source of funds - 1 w;which may be utilized, since it is not explicitly prohibited in thef treaty, lies in the potential for resale of technology .- ; that contractors would have to transfer to obtain contracts :. to exploit the seabed. The total net revenue of the Authority, after operating ;and other expenses, would be reinvested in the Enterprise or X .?o .! 20 ["t~'~'~'~-':'vc"-1~4.. - - .---. -- -----p~~~~~~~~ CAPITAL FLOV. OF THE AUTHORITY * 4.-~~~~~~~~~~~~- -API TAL FLOVV OF THE ENTERMRSE -.~~~~~~~~~~~~~, 110 A~~~~~~~~~~~~~~~~~~~ 77 dt ti bu ted to S t~ ~S wh I C! a rc t to the convention ac- cording to so,-e predettermined,_ formula, or some combination ot thc- two. ~~~7v~h cart on the, pre.vi-us pace Fsnows the nunierous ~u~t~flUU-y~fl~r~tin~c.,ctivitites in whicr. thec Entcrprise may 3~~*nae It would, in the '.i ew of de.veloped states at least, pi r ro f i t-o ri e nted 1, u si n es F, pa rt i c -a t ing i n oce an mining 1_itLCet by entering into ,oint venture agreement~s with pri-I V.Ite corpurations or by undertaking its own minina opera- L t I ns. The Enterprise could also share in revenues result- inqt; rom payments to the Authority mandated by a future t r -~~. The distribution. of revenue, would be decided by tt.~:uucilWhO Would hdv(- the responsibility of determining w,'a t or t i on o f t he p)r of it s wo ulId b e t r an sf er red t o t he AUtl.ur ity and what portio ~lwould be reinvested in the Entf-rpr i s-: 17)C;%'STIC LFGISLATION To provide interim quidance to U.S. seabed mining cam- ~nswhile a comprehensive Law ot th~e Sea treaty is being ne';tiaedthe U.S. House. of i~epr-_s5entatives passed on P-, J u P;v 26, 1978, t~e- Deep Se..abeds Hard Minerals Act (H-.R. 3 350) L() r Iz Inq d ome2s t ic co r, o ra t ion s t o n egi n s eabed m i ning op- t~it loin; urtin ii n irit, natijonal aqrfeem.ent comes into force. t ,t oi ri~ tit I., Oct wou Id Ielr~~ superseded and miiners ~~~~~~I i pQt(Ito allch- 1by whateve~r rules and regulations L'4- t a i i i sh d b.,y t h - t r a tv . P V,*~~~i: ti 1 1 wh ich wa s c,':ner Ially u-,"pr ted by the admin- :st t it ion, si).-c i ficall ILYStated, tha t no assertions of sover- --i,:nty or sovc-reigin ri(.I.t!s over seal-ed minesites were being a,!vanced . In rc-coonition that the seabeds are considered tccommon heritaqu of rrankind, th-f bill would have estab- ~ish(:d a revenue--shirin,, tund to which-- contractors would co-(ntr ibute a seahed tax ccmputed at 3.5percent of the t.n u ttd L]:alue (if the riin#erals recovered. Uponl ratification )t a tr(-aty bjy the Unitser States, funds from this trust aIccount would be available to make any re~venue-sharing c(,ntrib.ution tr'�qui r(!i 1-y the new international body. The Z 41 '-fie~j Seabed Mineral Res-ources Act (S. 2053) was reported ),t. Ly the Sfnate Cormitte.e rn For,2iar Relations on August .g _,5~, 1978. Hoaweve~r, thei Se.nat-a failt:,i to take any further Iu II~ o r LI the 1 bil I tI or t h r end o-)f t he se ssi on i n Oc tobe r ;Att !;r-ss ion o Z t hf i-'nera I crririt toe in ';(-w York on '-A ~ A'~; 2~1:, 1978, tA) to.cr tccmnsr.,..;ard inq national deep -- _nj~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ seabed mining legislation, the chairman of the G-77, voiced the concerns of the developing countries. "It is incomprehensible that at a time when the e- conference is at an advanced stage in negotiat- ing an internationally agreed regime for the exploration and exploitation of the resources of the deep seabed, States engaged in those negotia- tions should contemplate unilateral actions which would threaten to jeopardize the pursuit of the negotiation and indeed the successful conclusion B:,-"~I of the conference itself. Those states must be aware of the consequences of these actions." The Soviet Union concurred with the G-77 view, stating " that the proposed U.S. legislation violated the U.N. As- -A.=:];~ sembly resolution which called on nations not to exploit the seabed prior to establishment of an international seabed -.--~ reglime. Contending that there was no urgent need for national legislation, the Canadians called for a "little more patience." . Ambassador Richardson defended the congressional action, tIhri stating that under the freedom of the high seas it was fully . 4 legal to exploit the seabed beyond national jurisdiction, : that the legislation was necessary to encourage research and development precedinq commercial mining, and that it was fully compatible with a future treaty. Instead of jeopard- izring a future treaty, the Ambassador contended that the I' egislation: "* * *should facilitate the early conclusion of a generally acceptable Law of the Sea treaty by dis- !'.--'. [Jpelling any impression that the governments of the countries preparing to engage in such mining can be induced to acquiesce in an otherwise unaccept- able treaty because that is the only way to obtain the minerals." It is too early to measure the precise impact of the progress of domestic mining legislation upon the conference. Although so.me reaction was evident, it was perhaps buffered .: -' b the tact that the legislation had passed the House only at that ti.e. Because the Senate failed to take action be- fore the end of the 95th Congress, the bill will have to be reintroduced and( ruconsidered. i- :' I 2 3 ?:a; he A >: * >-5 -- w t 9, n.! 'L .JA "-:,:. ' --'._,,_ :' - : -. , '-.:..' , - . " � - _ :. t"~ - i'..-t? _. 7:3~c,.";-,-.. z~ 2":"--'-"" :'-':./' A'- , - g; C'HAPT1ER 3 (E;F:N.AISSUES--COMM ITTEE II A ~~~~ ii~lior Comiijttfec 11 problem remaining is to define t' t~x,,*-t ol coastal statc- jurisdiction. Although most - ~ ~ ~~~ ~issufs wtere basically resolved in the 1975 and 1)76-;nt'1':nfl S~ions , j~oints still unsettled at the end ,i ttL' 1977 ewYork stssiun included access by landlocked and2 cje'-q ciraphically (disadvantaqed states to the living re- 0 L.,r-c,-s o L th.e exclusive economic zone; the limit of the contirnentall narqin and revenue sharing related thereto; F-A d,,~lir-iltion of the territorial sea and the economic zone and 1~,-A: continerrtal shelf between adjacent or opposite states. ;Jtia"ing groups were established at the 1978 Geneva su5-ssL )r. to consider three of these still-disputed issues-- acces ~vlandllockfd and cjeographically disadvantaged states to llivinq esucsin the economic zone; delimitation of IWiitii ' r. . 6)o)nddt'ifS, and definition of the outer edge of the ~.r~ri.~u-td1 arqjin I)eyond 200 miles and the related revenue - :J.-it in;.J A tourth nejqotiatinq group was to consider settle- ~A ~ disiy-tes reldinq to the exercise of the sovereign ::til wC~ha-.tal states in the exclusive economic zone. I I~~~~~ ~~;t t hrlet,. nt-lot iat i n qroups met aga in dur ing I ti.* I 9j7B '.'#-w Vot7k s-ss ion. in add it ion, during the 1978 -~~ 5."Sleiv~s, informaL Committee 1I Meetings considered, an d~tcI.-n7drtc~ebasis, articles not considered by I t~ o itil groulps. This procedure gave delegations ';i,)rt.unfity to air any remaining, questions. Prgrs W.1i :>(f. t~.Ca t-he tour negotiating groups, but no V~i~ 5was lilddf in determininq maritime boundaries, which -~ i:.vr.tves rnv bilateral difficulties. The status-of-islands L,,-ost ion was; debated with little support for amendments to ~~- ~ tl.# ICNT and s;omc op)position. Also considered were proposals it iLu r'~q i m f aor enclosed and semienclosed seas, ~~~ICI diqa proposal to re-strict the article's application t~-,:rna I Iseds. Thte proposals were strongly opposed by I-:CONIM IC ZONE Lu r inq the 1974 Caracas sess ion , there was extensive i n (-ud ino; a I2-milei f t .-~rr itor ia I seaj w with coastal sta tes Liv n i *xliv riqhfts to exploitation of living and non- Is1rc- v f t L f z one. Moreover, coastal states would ~Jlr *'.'u:;v. r ilinq r iqht,.z on th-e continental shelf or 24 sea floor of the zone. Other states, however, would retain freedom of overflight and navigition and the freedom to lay -' submarine pipelines and cables. A major problem was nego- V tiating a balance between the duty of coastal states to respect international rights of third states, such as freedom of navigation, and the obligation of states using the econo- mic zone to respect coastal states' rights. The major mari- i. .t,4 time states, including the United States, were concerned that granting too extensive rights to coastal states could . ultimately make the zone the functional equivalent of a ' territorial sea. Thus, the U.S. delegation proposed stating explicitly that the economic zone was high seas but that this did not derogate from coastal states' rights provided '; ~for in the Convention. Although agreement on a 200-mile economic zone was wide- spread, opinions differed as to the outer limit of the conti- nental shelf where it extends beyond 200 miles. Some states advocated an absolute limit of 200 miles; others wanted to control seabed resources to the limit of the continental margin. During the 1975 Geneva session, a compromise by : which coastal states would retain the right to exploit the resources of, but would share revenues from, the continental margin beyond 200 miles won increased support. The United States supported the compromise. During the 1976 New York session, recognition emerged that the compromise on the shelf would provide for coastal state jurisdiction to the outer limit of the continental margin and for sharing revenue from mineral exploitation beyond 200 miles. This required an agreed formula for . determining the exact outer limit of the continental margin. During the 1977 New York session, attempts to change -'a;1 the exclusive economic zone provisions of the text in committee were met with strong opposition from those ,1~,.. nations that wished to make the zone an area of national jurisdiction with limited rights of navigation, overflight, and communication. However, a group of effected states of all persuasions was formed to consider the legal status of the economic zone informally. Discussions culminated with new texts, clarifying the rights of coastal and other states in the economic zone, which were discussed in the appropriate committee and then incorporated into the informal composite -'"&Z'~ negotiating text for further discussion. During the 1978 Niew York session, many countries expressed the. view tdat there .;hould be no further changes I r~-J r ss g rr; 3 A; ;1"NTr-~"T -L;;. � .;i--- Lfi*1-.�a to the economic zone related articles. While no agreement was reached on the formula to be used to determine the limits i, of the continental shelf, the Irish 'ormula supported by the U nited States gathered increased support. . Continental shelf - During the 1977 New York session, the Irish formula-- to determine the outer edge of the shelf beyond 200 miles by a distance critet ion from the base of the continental slope (a prominent feature) or by a depth of sediment test-- rface ived wide support. Other formulas were discussed but :. 4 recefived less support. No precise formula was, however, ; included in the ICNT. ' . T't.e U.N. Secretariat was requested to prepare a map andt fijures on the differences in area between the various formula definitions. In April 1978, it provided the con- ftrence with a map showing the area included in (1) a 200- i nautical mile formula, (2) another formula using a depth critkerion, and (3) the Irish formula; but the United Nations cjut iondi that the study was only a rough indication with i u:;:.tantial probability of error. The study showed that t . a.rtb:,e hl)tw :-en the base of the continental margin and 200 ::i l :, where thbe mnarjin extends beyond 200 miles, is 8.2 J !::lit } il S Ud": nautical miles. 'The total area beyond 200 c til:es, usin(g the Iritsh formula options, is 2.58 million and 2.61 million square nautical miles. Using the depth crit- u'ion formula, the area is 0.06 million square nautical The U.S. delegation concluded that formulas 1 and 2 abov e cdo not accommodate the interests of many broad margin - states and cannot form the basis of consensus. It was also clewcr that the lack of a def inition of the outer edge of the mariin cr eated some jurisdictional problems and that that the Irish formula was a compromise that could be accepted by the various interest groups.. During the 1978 Geneva session, the Soviet Union intro- duced a distance formula which it characterized as a compro- miiss proposal. This formula would give coastal states }uriLcdiction over the continental margin, in cases where it e:xt. nded beyond 200 miles, to a maximum of 100 miles. The crincern of the U.S. delegation and other states with this prq,' osal was that it (1) does not accommodate key broad . midr;in states--states with broad continental margins, (2) could evolve into a 300-mile economic zone, and (3) does n')t address the qu.est ion 'of how to determine the outer edge tof the rarqlin betw:en 200 and 300 miles. w0hile the U.N. 26 ~I �~���� o. ..~ .~~~~.~... ~.. i.~....., .~ ..., ..~,. ...,i, L~~~~~td" 'a-* -intfr h bsso osnss twsa Secretar iat has rot ccarputed t~e lares a-. !Dse y the Russian proposal , its ex>c.i~ n> d ;.:'htmore a r ea th11a n theF- I r Ish p ro po S --ji Teintr,-.uuct ion of the Russian proposal, supported 1-1y the East Europeans and Cuba, made i t impossible to reach oven nonerall aqre~rr.-1nt on t issue at the 1978 sessions. Revenue shar nrn The ICNT i~ravides that coastxfi states, which extiloit the nonliving resources ot theQ continental shelf bevondI 200 miles, rake payment to the Authority,. The~ Authority 1 ~would thene distribute these funds equitainly to less developed countries. T hi s is known as revenue sharing. all There was a strong undercurrent of support for a revenue- sharing system which would benefit developing countries without discouraging production. The ICNT incorporated a formula which creates an obligation to nay I percent of the onsite value of production in the 6th year after beginning commercial exploitation in airea beyond 200 riles. This payment will increase in I-percent increments annually -~~~ until a maximum rate of 5 percent is reached in the 10th year. Several states prefer a maximum rate of 5 percent in the 10th year and ther;-after, while others favor a hi(3her maximum rate. The ICNT also 1ermir!: an eix(mption. from the revenue- shar inq prayvis i(n tar dv pignat ions wh ich are net importers of tthe particular mineral [produced on the conti- nental shelf. This provisio-n exempts certain more proqtes- sive de-veloping countries while certain poorer states are not exempted. This I' ssue- will b- considered in future conterence sessions. All payments or contributions will be made to the Authority, which w il IIdistribute the funds among the developing nations. Dur ing the 1978 Geneva and ':(w Y,)rk sess ions, revenue I ~~~sharing was barely discussied, hut trewas a broad consensus on the prctntageand rate uf ncremf-nt~al a~nntil increases. The maximum rate to be applied is; still open for discussion. FISHERIPS U. S. t insader i-s rror un, 19374 C.aracus coantal, anadr1re~ots (which zi;wn i?; !r-- wat.'r , rn iIrjt(-- to th cn, anld r-'turr to "jII F:n ~ac !7,~-n) and hirlhly 3~~ ~r ~'c.' Eric-! as' I"r --coastal species were to be under the jurisdic- tion of coastal states, which would have pref- erential rights to harvest the;. within the -:I allowable limits (the amount of fish which could he taken without endangerinq reproduction of the species). Other nations would be per- mitted to harvest the difference. V-*?.{ --management jurisdiction and preferential rights to anadromous species generally throughout their A:t;r5 range would be given to the state of origin. -, --H iflhly migratory fish species would be subject to international or regional control. At the 1975 Geneva session, the landlocked and geogra- 'phically disadvantaged states objected to the proposed tisheries articles because they wanted a provision in the i trudty giving them the right to fish in the economic zones o t their neighbors and the coastal states preferred at most X tlateral negotiations for these rights. .. t:he 1975 Geneva text, issued at the end of the session, ,--:j ,:t I. ct ,d a Itavorabtle Iposition for the United States on fish- ~'[ '' Li the eCO[nolllic zone. Coastal states would have L ,I"andqcement jurisd ict ion over fishing coastal species and .j would be required to adopt conservation measures to ensure <i thet the fish stocks were not overexploited. They would -:provide optimum use by allowing other states to harvest what each coastal state does not have the capacity to take, up to a amaximum allowable catch--the amount that could be taken without endangering the species. The state of origin would 'have jurisdiction over anadromous stocks. The text provided tor access by landlocked and geographically disadvantaged states to the fisheries of neighboring states' economic ....... zones, but the landlocked and geographically disadvantaged states considered the provision inadequate. It also pro- vided for a coastal state to regulate highly migratory species as well as encourage international cooperation in its economic zone, a provision the United States considered : -unsatisfactury. i z~..-,< h Tthe revised text issued in 1976 showed few changes in tt. coastal and anadromous fisheries article, due to general -�!~ Eacceptance and to the chairran's reluctance to change the "G.il>- : 1975 Gefneva text without kbroad support. Some technical * ?- v nUes::; which thle Unitt.- States considered an improvement wete made_. to provisions tor tt: highly migratory species tut w:r,-* o!uIosed by other ctastal states. Even with these g4-rs-. .;_.9X~~,I changes, the provisions were not considered satisfactory by 4 the U.S. tuna industry. The United States wanted interna- tional or regional control of tuna in the economic zone, and the articles were ambiguous on this po int. The ICNT embodies the favorable provisions of the 1975 Geneva text on fishing in the economic zone. During the 19i8 hA Geneva session, no changes were proposed to this text except that revi:.ed provisions on anadromous stocks were agreed upon by the delegations of Canada, Denmark, Iceland, Ireland, Japan, Norway, the Soviet Union, the United Kingdom, and the E._- ; United States. Domestic legislation .M ' Because of the enormous increase in foreign fishing off the U.S. coast in the last decade, the slow progress of the Law of the Sea conference toward a treaty, and an awareness of the damage to coastal fisheries from overfishing, the Congress took action to conserve and manage fish stocks [, S.ff? .within 200 miles of the United States.. In April 1976 the President signed the Fishery Conser- vation and Management Act of 1976 (Public Law 94-265). The act was effective March 1, 1977, and vested the United States with exclusive management and conservation authority over -t,.:'t- coastal fishing stocks to 200 miles offshore. The provisions - ......:i~.-- of the domestic legislation were generally compatible with the coastal fisheries articles of the then-current text. The law does not provide jurisdiction over highly migratory species. j ,:'. - ',:". It provides for conforming the implementing regulations to the Law of the Sea treaty. In connection with extending its fisheries jurisdiction, M~i the United States has had to negotiate new agreements with nations fishing off the U.S. coasts. Negotiations have been successful and have resulted in acceptance of the new limit. Twelve major agreements have been concluded pursuant to the Fishery Conservation and Management Act of 1976. AqtX Marine mammals - During the 1978 New York session, the United States .! : spearheaded a movement to clarify the marine mammal conser- : r vatin provisions. An informal group was established to consider revising the ICNT provisions and made some progress. The group will resume meetings at the next conference session with a view to revising the ICNT articles. The states are clearly aware of the need to conserve and protect marine -manmais. 1��:;~~~~~~~~~~~~~~~~~~~~~~~~~.14:7 1~~~~~~~~~~~~~~~~S . :[ii �: -_J Yl,~;t coartal states oppose compulsory and binding proce- tntI~f-, tc) ~~s-tt It? t isher ius d isputes as a violation of their - ~ ~ ,ee'7.*t i~~~n u Lieqtit~ in teeconomic zone, whereas landlocked and ~~~~~~~-A ve a rit IIyd vn -qd states support some kind of corn- K ~ I <1t ** t I u;'unt cit (CCs5 di sputes in the (economic zone of v e~;~eI ~,~eto~;. luwcver, coastal status with distant water 1 ~~LIi, Ik thLe U 11i tt-cl S ta t L the Soviet Union, and Japan, su,.; or t cc-mpu I sory and bind ii _tlement of disputes. S ince theQ 1,'NT ,rovisioli on this is is highly ambiguous about r ih ts o)f o)t h (2r s ta t (-s t,- -iaalenge coastal states rights t'. V'tewjnuaccess to I ivino -esources, attempts have been to draitt new texts whi,'h -iould provide a compromise h ) o t solv ngthese- d isputes. ,t- Ite 'bet-inning ot the 1978 conference session, coastal t~t~ oasically opposed application of any compulsory and 1;~.i~nl-ii rcocedures to their fisheries; and landlocked, geo- iuraph:i cal ly d isadvaritaqed , and d istant water f ishing states S _;ortec; co~rlpulsory ancl binding settlement. After intensive Fiat ovprmia was developed which provided for compul- I conc~~~i I a t iun . This procedure would require states to j .r i i * Ie* l tA.0 disf-Lltf! ,,tt lpm(nt procedures but would I ~ ~~~~~~~ r. i c 4e i~t uS to - st tlIyement. it was decided that ci!~~~~ wi i n 'WccL I d.t len (?h Ie applIi ed Onl1y to0SL sei fi c .er',~;rei t fel to) I (,()ii;La statiL' s obligation to allow other t ~~t *~k to un SI vlIL pl us I iving resources i n their 'icorrce:c Zone. Spuc i ~Cica a coastal state would be .II f-t ! to accue. t ColfpuL I sory procedures where it has (I1) ~.I ~I- ti prote-ct its living resources from serious danger .rouue; pcoptr conservat ion and management measures, (2) r - -tw' u!,(Iar1Ji t rar ilIy t o d eterm ine e ithe r the to talI all IowablIe c.�tci, eer its own harvesting capacity for particular species C J t isi-, or (31 r(-fus(-d arbitrarily to allocate the remaining & sirtlis to ot~-r stat(-s as required by the ICNT. q uest ion ot del iriitation of the ex~clusive economic D 'oc and th!c: continurntal she If between adjacent and opposite t-a te U. i, di t fic ulIt i ssue i njolv i ng ma tter s tof essen tially sitatiral (enc(_rn and, in rnany cases, p ertains to existing i !Pu t .s . Pelated is thr_ question of whether, anti if so to .-ht*XI aflt ,rILOVI'S ions (rcnet c.n of disputes should be * ~~~~1~ int: kid(ed III the 1.aw rof t~hf_, treaty. Little progress was ii 1 tI e L t. io(n w!h i ch w i I nee~d toVefrher cons ide red d tt. e nxt on re cesession. ~~~~~~~~~~~~~~~~~~~~3 30 Irvirng- ;n* aximum Extent (if tE~ territorial sea is In~2to t_ u-f-StIOfl of rtqulatinq transit through, under, and.erstrait,. ustcd tor internationall navigation because a,:c -- a: .12-mile- territorial se~a- would give coastal 5;tje~ ~ri`(ct~ion uver 100 straits- less than 24 miles J ww~14 L H uitJ States !ias been willI ing to acce~zt exten- ~i',n 2* theterrltOria1se to 12 imles as part of a Law of t t f. tr-t,;Lroidld tatit was coupled with the right to trans i t ;t r a 1s u s c; tar international navigation. t~ 197~~ Geneva session, acree,-ent on the 12-mile 1 ,,r 1cr'a sva was almost unanimous, and the issues of the ttr r i tr a isea� an)! straits were virtually resolved by -Qnerai daccetance of tthe 112-mile territorial sea and tran- s~~~t S: sut. Attempts were made to clarity the term i -noc Qn t e ' codified in th;e 1.958 Convention on e '-_-r:tc)rial SE~a, by corpiiinq an objective list of activ- :.~s wech were"not inocent."Such provisions are in- ~Je~i in he ICNT.'The lec;al status of the economic zone ~-raits used for international naviqation was again F ~S :eu at the.- 1978 Geneva session. While there w;,s ee~t Init is fairly certain they -,Sill undergo :tr .rt 1 ve ha * !.'~~~~-rl.; tri t I' ti M11 ;e A f~~~t.i:;th most irmcediate ef tuct of a future Law of the tr.tv a. dorimestic ".S. Politics would hr the extension t -rlt,)rial ,;ea, trom 3 to 1.2 -,iles. The 3-mile limit 2:~~ ih i c t iicton a 1con 1.licts be~tween States and the :~:rdi o~~r~n ver environrentall, customs, taxation, and J w~r:; with n ths imit hav beeni frequent toric of * -;~.a~:~t" M9-i le extension would probably initiate a u2 flrry o f leqalI a ct iv i ty a s S ta t es a t'-emrp t toaa ss er t it F c:-tncovrtinewly acquired territory. A17 ;e r a ph publishedj by. thc_ D-2an Rusk c:enter for international :.*mdratlye aw, ''Te aw of the Sea, F(.dera 1-state *at L!)ns nd textnion ot the Terr itorial Sea,` describe _..iae c.)izreas, ot probablte Fe-deral--state dispute. --,urisdiction over t he watter and seabed within ~~~A~~ ,(Wiitinancl 9 rinl-s of. te-rritorial Fsea. --A I o,7,t I un (at In c r t t r (m f-.X:_Ci ta t i C) Ct fte .,rr i t'r ial- 1 '-a anu out-kr CC,-. IeN.-tal IShul "A~~~__ "IM-777~~~~~~~~~~~~~~~~~~~~~~~ --Pci icing and regulation ot the additional territorial sea area. 1,A,.'DLOC K L AND GFOGRAPH ICALLY D I~ADJ.ANTAGED__STATES (leof the remnainina critical issues is the right of .:ccs~s to them Iliv inti resources of the economic zone by the 53 vations that arce landlocked or consider themselves geo- '4 q~raiphically disal.1antaged. The coastal states group--over 80 rrbr~ae -sisted provisions which would grant access or tt.rms favorable to these~ nations. :' IC,%T would give the landlocked and geographicallyJ d is a1:inn t aqed states the right to harvest surplus fish in tL -)cnomic Zones ttheir neighbors; coastal states would sit the inaxim'um limits on harvesting. This text also con- rfines the acccss ot dneveloped landlocked and geographically disadvantaged states to the economic zones of other developed coastal states. . rv i Sd text was produced by the negotiating group ~~Aj~t..~fl wnc ined the rights of these states to "an : rpr~+ i,ite art" of the surplus Iliving resources, the ;~.I ti-f)r!Ltn up this participation, and the pro- '! dKind I min access when the harvesting capacity of dcoa5;tda I tteappitoaches a point which would enable it to !;,Har:t tie ntire allowable catch. -,his text also ~et irqt.!_qroirAj;hicully disadvantacged states and established :r'ter2ntalrikihts for developing states. Despite this :.t qr-:. inal resolution is not exetduntil the limits ~~A ut ftiP c~mtine~ntal shelf have been determined. However, :r 'r;. has bt.en made and the text befo~re the conference CaP':f.4 to i ncreas(: the Ilikel ihood of consensus on th is 3 2 A - ~~ ~~ ~~SEAPCH I~~SSUES--. m T.Pi -,t i It ti.e I'aw C) t~he Sea nequt iz~t1,:;Ls eo *.:.1.t. .-ct ivo- (-n'. iromra-.ental 1 rotect ion ao ~ irjn-t IF tt- ~~t':,L~~~ tal V 1rcs ot ~it:c3r it ieF polu t io0n A n a oirion w�;a:'.~L~d to a cconM. .Od at. nav ic a t it.)n nts~reats 1r.e975 Geneva se~s irn, articl(.s oover nl1th *~~ ~ ~~~~~~ ~~~~~ nd - L. aa s e 6fdK sCo Our~ V(-s o t po 1u t i u n a nd a V F.,qu r e- * *'~~~~~"vvr clr! F-,rta1I ass e ssr, en to c~tetn th moss * :~~~tj~~a rm domt-stic activities iefore thev arVe c arVr i ed 2,.8a~rv .V d' ut-ion. Discussion on polI 1tit i on f rom ta s Lc Itf a Ct iv'' t ies and tran. dumipino did nmt reach, - *lIotl'cn2-t. T - c central issues were, wheti..r the(_se .a:ic Iut ;lot sould be control led b% th-m_ cc~ist,' I . . ~~~~~~~~~~~~~~~~~~~~~~uitternatiormal standards and how -trict k ch St ind]- .~~~~~i a: r i a nr 1 97 6 '.(-w York sess.9ion a, ar4Lr-r-ri t w,. F F, s tJ t (ar- !stat s et at)Ii ish na t ionalI iws no I 1, Iall [tit 0jr, ir i,;inq tro:msa~~ c iij~~ujc ~~ ti t El~ ict (Io a nd t he d ur-pi nt at wastc. A consensus . r ~ ~~~~~~~~ three a s pe ctsF c)f ve s sel sourVce tal oIU t ion-.- - it.' uau.~~~itirns i n t he co c)no- ic 7 one, qrov r a *~~~~~ ~~~ : s*' ai,'5, n coa stal1 s t ate r ights crncrnino ,jI#-tFr,.( aI se -~l2 ... nitf-d Status and A -~~ :**, ,,r H: ~~~~~coa~sta I states L,(: i#L.'ved that the ccoast,-l states 17 tte t C st ab I i 'O.L toi-_tion req LIa t ion fonur t -rV i t -r ia 1 s,_a s s tr i ct er t han ir, r na t i ora I st.and ards F a.. a;. i~t tn :on, and th.~a western European Sde S ..~~~~~tn ~ ) , uoacndt .EL i It t -* 1 977 Nw York s is s i on. faile.d t o c-mi~l-ee1 y xten~ ~2 coastal states' lurisdict ion ovt-r rol- ..I'::In t:.'it ~territorial sfas, sc~e :.rocre' waa F made J.2 1, I ira: i. t-.nv iron-(_ntal !stacia'rds. f-r exanr-- t ~. U'' :l~ltiln It ~ ut ion Van. iJ(2*- sv'a!icd T-Fi r;I nt aC- a.t V - :5.1 -as F. rovi was!, i i iu. i,.i * ,a . :~., I r '';i. It I ' V c. r t.t4, r F .t r r a IcatIa7J 01 V nn' n' -P..-If - ~ ~ ~ ~ '~~~~ '~~~ a a~~~ "-.a its territorial sea was clarified; iLut it was decided that the coastal state would not have the competence to set stand- ardas over the design, construction, !sanning, and equipment FIA ~of vessels in its territorial sea. Althouqh delegates, wc'rc tgenerally reluctant to make chan(It-s in the ICNT, propos~dl revisions to strengthen A ~~articles on t~he Prevention, reduction, and control of pollution from Ships were agreed upon during the 1978 ses- Sions 'As a result of efforts by the United States, France, and Canada. The proposed revisions would (1) provide pro- tection to endanqeored species and fragile ecosystems from S~~ vessel source Pollution, (2) clarify' the obligation to e st-ablish ship-routing systems that would protect the envi- 'u ~ro0n IM nt, t(3) require prompt notice to a coastal state of evtents that could result in pollution off its coasts, and (4) remo.Lve certain restraints on the power of a coastal state to enforce antipollution measures in its territorial sua and economic zone. Several. other controversial amendments introduced by tf.e United States were also acceptcd by the conference. T:included Proposals broadening the rights of coastal tt(hto Iloard, investigate, and detain foreign ships inr tt.i iecuriur. ic zori(c in ca!se- of ccrta in pollution violations; L: ;r 0,I iPO thIIL I f-110t iI F V, 5'!I iou SancI willful pollution inTI~ tfr 'Iion iu i c-a; anci ci ar ii ync Coastal States rights rukhrd i n i n terv(-n1t ion dLi t .'r Ma r It Ime Ca SualIt ieS. A compro- r~~ .oposdi was atlso accepted to allow participating A.~~S study to reoquest trom- %,(_ssls in their territorial sea d ~~inllt-):!:tion a-, to wh(_-th(r the ve-ssel meets the port entry re~uiemetsof the state to which the vessel is destined j~~we states are 1 articipatinq in a region- ' port entry cagr(-Cer-Lnt and have the same port entry requirements. The U.S. declegation indicated it-, willin'gness to conclude rcootiations on pollution if the Committee would retain t!hQ amendments reported by the Committee Chairman as having a substantially, improved prospect for consensus during the 1978 sessions. L * ..d' PINF SC EN'T IF IC RESFARCH During the 1974 Caracus session, aqrreement was reached on the --n(.ral principles for (joverninq marine scientific rv5'arl.,inctal inq rC'(u iremf-nts that research must be con- Q~~~~ cit ci only for eae lpurposets, -ust riot interfere with o)t hfr ()ce-an uses, Cannot r orm t1-lqa asi s for claims- to J, r~o t iv.*ar in'�'n;irr:r or rrsources , and -,ust c(' 'with, at l icablo cr.1o~~n o~tin regulations. A~~~~~~~~~~~~~~~~~~~ -~~~~~~~~~~~~~~Z - z- !c.L-:~ Since then, the extent of coastal states' jurisdiction over marine scientific research conducted in their proposed 200-mile economic zone has been much discussed. At the A 1975 Geneva session, different methods for regulating marine scientific research were discussed. The United States sup- ported a West European proposal that an "obligation regime" would make the conduct of marine scientific research contin- gent on fulfillment of a set of international obligations, ~tt*-, with differences being subject to dispute settlement proce- dures. The G-77 proposed that such research be conducted only with the consent of the coastal state, a "consent : ;-::~ j regime." The Soviets proposed a combination of the two: explora- ;. tion and exploitation of the living and nonliving resources would be conducted only with consent of the coastal state; other research would be subject to the fulfillment of a i series of obligations; and the same regime would apply to ift 5 marine scientific research on the continental shelf beyond the economic zone. Research would not be restricted in the ::. remaining ocean area. Although there was much debate about the practical difficulties of distinguishing between the two types of research, this proposal formed the basis of - 1 the provisions included in the 1975 text. The revised 1976 text adopted a different approach by attempting. to limit the circumstances in which the coastal - state could prevent scientific research. The revised text- -- provided that consent cannot be withheld unless the research is resource oriented, unduly interferes with the economic activities of the coastal state, involves drilling and use " ;.:-:~ of explosives, or involves the use of artificial islands or installations subject to coastal state jurisdiction. Disputes E�::7~ will first be referred to experts to help the parties reach agreement. If these efforts are not successful, the dispute ] will be settled by binding settlement procedures. Many of the provisions of the revised text were considered unaccept- able by the U.S. scientific community because of pc;sible constraints by coastal states on research and the publication . of research results. Little in the way of chance was evidenced by the ICNT . issued in 1977. The consent nature of the articles dealing with scientific research was retained with a few changes. t , A cross section of delegates worked out a change which pro- videds that states "shall, in normal circumstances," consent to scitentific re:search in the economic zone that is not of direct ;iqnlticance to resource exploration and exploitation. / !i i:5 i -�?Q An obvious problem with such wording is the near impossibil- ity of distinguishing between resource and non-resource- A related research. A marine scientific research project can ~-'2;~ be commenced if the coastal state has failed within a speci- e tied period to reply to a request for consent to carry out the project. This notion of implied consent is intended to counterbalance the right of a coastal state to regulate or authorize a marine scientific research project in its econom- ic zone or on its continental shelf and is an attempt to make :. the coastal state take timely action. In case of dispute, the ICNT provides for arbitration - procedures when the parties cannot agree on another method. : But, unlike the 1976 text which provided for binding third- party arbitration, the ICNT limits the types of projects subject to arbitration. This modification of the dispute settlement articles has, in effect, given coastal states considerable discretion to suspend research in their exclu- : -a sive economic zones. As stated earlier, the 1976 text pre- -J/rJ;" ~/iviously mandated that all disputes arising out of research- b:: :X related matters would be submitted to third-party arbitration it bilateral negotiations fail. The ICNT deleted this pro- vision and provided that a coastal state does not have to r.;utmit to arbitration if the dispute is ever research which --is of direct significance for the exploration a--'~W and exploitation of natural resources, whether i ~.C~ living or nonliving, --involves drilling into the continental shelf, the use of explosives, or the introduction of harmful substances into the marine environment, --involves the construction, operation, or use of artificial islands, installations, and structures, [- ~ --does not explicitly conform to the nature of the X!: {workplan first articulated to the coastal state, and --is conducted by persons who have outstanding C obligations from a prior research project. The coastal state could apply any of the above stand- - ardq. to a specific research project, and in case of disputes, the court may then review whether the coastal state has exceeded its discretion. The ambiguity of these standards, -how(evetr, may make judicial challenge difficult. --. A 36 .,: - I > 'nalr1`dtt ie a! ch ang~e was the de-'etion of t heC drtic> prov dcir'q thLa t r e sear:c h r es ulIts n ot t e r)u bli shed or IT!a de interrnatiornaliv available against the exp~ressed wish ofi the CoDastal state. This deletion, ir. effect, lInits coastal stdtei d iscret ion to suppress research reports . F'ov a rc-TOrt to t-e suJVpressud undter the ICNT , a nonpubilicatior. clause must -~~ he insertted and agreed to as a condition for the entry of a resea-rch ve-sselI into a nat ion' s economi c zone. An article was also inserted which gives a coastal state disrcrtionary authority to terminate an authorized research project at any time it feels the project is not in strict accordance with the- original agreement. iDurinqi the 1978 Geneva session, one meetinq was held o)n rarine scientific research in which the United States, supprrtted by the Netherlands and the Federal 1Republic of Get,,any, proposed returning to certain marine -scientific research anquage negotiated during the 1977 session. This pro-.osal was strongly opposed by the Soviet Union, the Eastern Furo~~earis, and about 35 developiaig countries; (le- S E. i t repeated requests by the U.S. delegation the proposal was not included in the Chairman's report on the stession. V'o.- Cliairman concluded that the ICNT was a balanced corn- pt sir.- knd suggqested no amendments. ~~F- P111['III(; V1he 1978 few York se~ssion, only two informal tt~~f *' 1mtimswre devoted to the subject of mar ine scit--rktit ic re-search. The U.S. representative introduced a roj~osa I for changes to the Committee text, which af fected 14 rtles nd was characterized by the U.S. representative os c-ditorial or clarifying in nature without altering the .,as~ic j--risciictional framework particularly in the economnic (n.) r, he proposal elicited some comment by several delegea- tions which had questions about the characterization and sufjqested that the amendments fell in categories ranging 'Lror, s tyIis tic and d ra f ting changes to changes wh ich we re substantive in nature and altered the fundamental character (-It the ICN'T. -A~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The chairman of the committee concluded that the 5ession re~affirrme-d that the ICINT offered improved] prospects for corn- ~rorigi. and cautioned against attempts to) reopen neootiations on tundarrental provisions relating to the regime for the con- diuct. of marine scetfcresearch in the economic zone and on t~econtinntal !Shelf . He- stated, ho-eer that ttede (;,it ions' rf,:,arks; on the .S-rpsdchanues w(-r( incrnclu- iv.- an Itl at. t ho projosalI sho)uld be cons idered fuirther: at ci~~~~~~~~~~~~~~~~~~~~~~ PIAD IX I ~~~~~~~APPENDIX I -~~~~~~~~~~~~~~~7 -. S77. m.,. rn ,- I CaF UIr Csio- r St I m%1 rO*~' It**I I*,? r Ge nser..L COa n... - ra I ~ . A,,v() u t a i' n,, . -a iin4to . . a. C . A) Itaf -1A, T'I to valalf oTn n the Ilebrs otf Sth ConI 4n rf-h n't Ma I r i e# - ril If ci r. U. (-,invnsiroat. ~ )fr .:.n~r I Ifnt ~0 c the Thfrd :Lawit ofithef-p Ser Co frence t t hn'ie 1 977, have rovn J'i r:nt I v a I i'm hl IIo Citorae4 and heo '!efllatil of the Crm p(f I -.-'..,. t hs-v '. i(Iat th.. h~i~ I00innn flt )ft thi' Inrst sf-55 iofl Y he (IF~tp~riI~t(,. hich wa- h Iv.d in 'X',w Y(rk f'rrcr M-ay 23 Ic .,'! Iv ::.5. ) Im7 7 . I ri vr. t fI fth avt L itht a nothfr.r esi on i s schodulIed to ic'~in to March '1 next vfear. it xmild he mos"t helpful if voL "-'-1~~~~~~~~~ ''cald up i ti thIi is r I)o r't to1 re4,f I I t h resuL t Is o f t h Ins *,�'il~l aliii jI)i,-) ijcj i i toi us .let! I iiont Iv ahead of the M~arech o er-'in IflI)p'f1it the Comml itto ii time ri(r revit-w. (See GAO note. Ycr ()(lpferioln in thisl respect will he, deeplv C~~~~~~~~~~~~~ r rra I y'd Chi MURPITY ra irran 0A ot e On March 20, 19 7 8 we furnished the Committee a s umr i r y o n c on t er Ince r es u Lts from. 1974 through early 1978. lealso aqrued to rer art on the results of the 1978 con- fs-r4_nce s(.-sions- and the status, of the issues at the end of 1 9 78- - t h s uL)ec t o f t hi s r cepo rt. 38~~~~~~~~~~~~~~~~~~~~~ 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ q"~ APPENDIX II APPENDIX II , RELATED GAO REPORTS :i Deep Ocean Mining: Actions Needed to Make it Happe n (PSAD-77-127; June 28, 1978) Agency programs and projects for deep ocean mining are fragmented and uncoordinated while needed programs -a have gone unattended or are behind schedule. The Federal role in deep ocean mining needs to be clearly defined. Need for Improving Management of U.S. Oceanographic Assets miiJ ~(CED-78-125; June 16, 1978) : Mi There is no overall Government-wide guidance, limited review of operations, and no formal system to assess the necessary levels of operations or to plan ~.~-. needed assets for a national program. Benefits Derived from the Outer Continental Shelf Environ- mental Studies Questionable (CED-78-93; June 1, 1978) The program has been costly and it may have little effect in minimizing environmental damage during explor- :a ation, development, and production in the outer continen- : " tat shelf. Results of the Third Law of the Sea Conference 1974 to 1976 Al (ID-77-37; June 3, 1977) Status report on Law of the Sea negotiations as they stood prior to the conference session scheduled for May 23, 1977. The intention of the conference was to reach agreement on a comprehensive treaty covering all the uses of the oceans. Outer Continental Shelf Sale #35--Problems Selecting and Evaluating Land to Lease (EMD-77-19; March 7, 1977) Outer continental shelf oil and gas tracts were selected for leasing by the Interior Department without obtaining adequate information to determine their poten- tial resources. Det.p Ocean Mining Environmental Study--Information and Issues (PSAD-76-135; September 21, 1976) Concludes that completion of the two-phase Deep Ocean Mining Environmental Study is needed to resolve environmental impadct questions which may arise when I mininq of manqanese nodules starts on the deep seabed. 7:.X~~~~~ ,i ::ra fF�pn~r� 3 �_~. APPENDIX II APPENDIX II The Necd for a National Ocean Program and Plan (GGD-75-97; October 10, 1975) Marine science activities and ocean affairs are I -. be(ing conducted by 21 organizations in 6 departments -3 . nd 5 agencies. Because of the vital. role the oceans ] [ plady in the Nation's welfare, economic self-sufficiency, I dndi national security, a concerted effort should be ;~L- undertaken to establish a comprehensive national ocean -" program and plan. Information on United States Ocean Interests Together With Positions and Results of the Law of the Sea Conference at . Caracas (ID-75-46; March 6, 1975) , Status report on U.S. oceans policy and Law of the Sea negotiations at the close of the first session of i the Third U.N. Law of the Sea Conference. Federal Agencies Administering Programs Related to Marine Scientific Activities and Oceanic Affairs (GGD-75-61; Ftetbruary 25, 1975) - 'I'he information contained in this report deals - with fundlinq data and describes the programs of the -cFedural agencies participating in marine science activities and oceanic affairs. The descriptive aterial is not intended to be all inclusive but is beinq furnished to provide a general and informative understandinq of the various agencies' programs. Achievements, Cost, and Administration of the Ocean Sediment Corinq Program (B-171989; November 1, 1972) '~.. V.Opportunities exist to enhance the acomplish- A rents of the program through more timely distribution _,,~:A- of core samples for detailed analyses and through . r:ore effective dissemination of the results of such analyses to potential users. Coordinating Deep-Ocean Geophysical Surveys Would Save Money (B-133188; December 8, 1971) The Federal Government could save $20 million by the early 1980s if the deep-ocean geophysical surveys to be conducted by the Department of Commerce and the Navy are effectively planned and coordinated. Although both agencies are aware of the other's geophysical sur- veying activities, tney do not have any formal mechanism for coordinating the surveys. - M, ' 40T 4 q.t zWii;?�.tLC 1 .Ei ,: � ..; i t " j t t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ APPENDIX III APPENDIX III POWERS AND FUNCTIONS OF THE ASSEMBLY �,'~ Informal Composite Negotiating Text Article 158 "(i) Election of the members of the Council * * * "(ii) Election of the Secretary-General from among the candidates proposed by the Council, .~l~~. I"(iii) Selection of the 11 members of the Sea-Bed Dis- - putes Chamber from among the members of the Law of the Sea Tribunal, "(iv) Appointment, upon the recommendation of the i Council, of the members of the Governing Board :. of the Enterprise as well as the Director-General of the Enterprise, . ~-� "(v) Establishment, as appropriate, of such subsidi- ' ary organs as may be found necessary for the performance of its functions * * * In the com- ' m.:.~ position of such subsidiary organs due account - shall be taken of the principle of equitable geo- graphical distribution and of special interests ..-,~ and the need for members qualified and competent in the relevant technical questions dealt with by such organs, "(vi) Assessment of the contributions of members to the administrative budget of the Authority in accord- ance with an agreed general assessment scale until the Authority shall have sufficient income for meeting its administrative expenses, "(vii) Adoption of the financial regulations of the Authority, including rules on borrowing, upon the recommendation of the Council, 3 "(viii) Consideration and approval of the budget of the Authority on its submission by the Council, mI, n" (ix) Adoption of its rules of procedure, - *1 "(x) Examination of periodic reports from the Council ~-~- ~+~�i and from the Enterprise and of special reports requested from the Council and from any other 1 organs of the Authority, t-34 i, Z- ~141 4� K a ' -i i. _ _ _ _ b $- . M .~~~~~~~~~~~~~T~kL~il ,~L APPENDIX III APPENDIX III '(xi) Studies and recommendations for the purpose of promoting international co-operation concerning activities in the Area and encouraging the pro- gressive development of international law relat- :- ing thereto and its codification, :(xii) Adoption of rules, regulations and procedures for the equitable sharing of financial and other eco- nomic benefits derived from activities in the Area, taking into particular consideration the interests and the needs of the developing countries, "(xiii) Consideration of problems of a general nature in connection with activities in the Area in partic- ular for developing countries, as well as of such problems for States in connection with activities in the Area as are due to their geographical loca- tion, including land-locked and geographically disadvantaged countries, "(xiv) Establishment, upon the recommendation of the Council on the basis of advice from the Economic Planning Commission of a system of compensation Article 150 (1) g (D) "Following recommendations from the Council on th2 basis of advice from the Economic Planning Commission, the Assembly 4J~.j'~ shall establish a system of compensation for developing coun- tries which suffer adverse effects on their export earnings or economies resulting from a reduction in the price of an affected mineral or the volume of that mineral exported, to the extent that such reduction is caused by activities in the Area." L..~ ::~,<~ ~- '-.,~ 42 APPENDIX IV APPENDIX IV . COMPOSITION AND VOTING OF THE COUNCIL Informal Composite Negotiating Text Article 159 "l. The Council shall consist of 36 members of the Authority elected by the Assembly, the election to take : place in the following order: "(a) four members from among countries which have made the greatest contributions to the exploration for, and the exploitation of, the resources of the Area, as demonstrated ' by substantial investments or advanced technology in rela- '~77g~ tion to resources of the Area, including at least one State '. from the Eastern (Socialist) European region. " (b) four members from among countries which are major jF.':-~!/ importers of the categories of minerals to be derived from the Area, including at least one State from the Eastern (Socialist) European region. :; ais~ "(c) four members from among countries which on the basis of production in areas under their jurisdiction are .- :~'!~: emajor exporters of the categories of minerals to be derived from the Area, including at least two developing countries. "(d) six members from among developing countries, repre- senting special interests. The special interests to be represented shall include those of States with large popula- tions, States which are land-locked or geographically disad- i<~7::: vantaged, States which are major importers of the categories of minerals to be derived from the Area, and least developed countries. !?'g "(e) eighteen members elected according to the principle of ensuring an equitable geographical distribution of seats '-~.� in the Council as a whole, provided that each geographical region shall have at least one member elected under this sub- -- -a paragraph. For this purpose the geographical regions shall -- be Africa, Asia, Eastern Europe (Socialist), Latin America and Western Europe and others. :i t "2. In electing the members of the Council in accordance with paragraph I above, the Assembly shall ensure that land- - lockci anid qeoaraphically disadvantaged States are represented r-,-.~, 4to a degree which is reasonably proportionate to their repre- a sentation in the Assembly. "3. Election shall take place at regular sessions of i V'': < the Assembly, and each member of the Council shall be elected -' ~4 - ,.--i ... A; 3 4s .~~~~~~~~~~~~~~~~~~~ M-Kl . I . r in~~~~~~~~~~~~~~~~~~~"`"-~~yi:~sr~~: e ,0 Mij :-~ APPENDIX IV APPENDIX IV " for a term of four years. In the first election of members of the Council, however, one half of the members of each 3"_ category shall be chosen for a period of two years. m -"4. Mlembers shall be eligible for re-election; but due .. rte(jord should be paid to the desirability of rotating seats. ~,~-.3 " 5. 'T'hf, Council shall function at the seat of the A ut Authority, and shall meet as often as the business of the ~-1 Azutt.oLity may require, but not less than three times a year. "6. Each member of the Council shall have one vote. A !; X"7. All decisions on questions of substance shall be F taken by a three-fourths majority of the members present and 'U11 votinq, :erovided that such majority includes a majority of the members participating in that session. When the issue arises as to whether the question is one of substance or not, the question shall be treated as one of substance unless : oterwse decided by the Council by the majority required for Questions of substance. Decisions on matters of proce- , _ g7 -(iurc .hail be decided by a majority of the members present Ia mand .ot ir,. " .-: *::~ . <.:,, cEs . i K' A E--k 44 @~~~~~~~~~~~~~~~~~~~~~~~~~~~~: C' - fax .APPENDIX V APPENDIX V STATUS OF PROPOSED CONTRACTOR FEES (note a) Application Fee $500,000 F-- Annual Fixed Fee $1,000,000 Production Charge System 1: "(a) If a Contractor chooses to make his financial contribution to the Authority by paying a production charge only, it shall be fixed at a percen- - tage of the market value of the processed metals pro- duced from the nodules extracted from the contract area in accordance with the following schedule: "(i) Years 1-6 of commercial production..... 7.5% i X "(ii) Years 7-12 of commercial production.... 10% "(iii) Years 13-20 of commercial production... 14% A [1 `"(b) The said market value shall be the product of the - J quantity of the processed metals and the average price for those metals during the relevant accounting period." System 2: "If a Contra;. or chooses to make his financial i contribution to the Authority by paying a combination of ? of a production charge and a share of net proceeds, such payments shall be determined as follows: : "(a) The production charge shall be fixed at a percen- tage of the market value of the processed metals pro- duced from the nodules extracted from the contract area . in accordance with the following schedule: ~', "(i) Years 1-6 of commercial production...... 2% "(ii) Years 7-12 of commercial production ..... 4% "(iii) Years 13-20 of commercial production .... 6% i ' W "(b) Production cnarge shall not be raised from 2 per cent to 4 per cent in. the years 7-12 unless the Con- tractor's total net proceeds plus his recovery of 0i development costs less his payments to the Authority in the preceding years are equal to the development costs incurred prior to the commencement of commercial Ip roduction. Production charge shall not be raised from a1 ,T(tS: Arse ta:r i .rouo.rd !,Y th( negotiating group chairman at the cluose f the 1978 :ew York conference session. ,C 5 - - >---- - -------- . ,- APPENDIX V APPENDIX V 4 per cent to 6 per cent in the years 13-20 unless the Contractor's total net proceeds plus his recovery of development costs less his payments to the Authority 2-~:';~ in the precedinq years are equal to twice the develop- ment costs incurred prior to the commencement of comrn- mercial production. "(c) The Authority's share of net proceeds shall be taken out of an amount equal to 40 per cent of the Contractor's net proceeds to represent the net attri- butable to mining of the resources of the contract area. This amount shall be referred to hereinafter as the attributable net proceeds. "(d) In the case of contracts for mining of nodules, the Contractor's net proceeds shall be based on the ,A gross proceeds from the sale of nodules at prices - '-9'~ I established in a recognized international market. In the absence of such a market, the price of nodules :E;---< shall be the result of arm's length transactions. In no event shall the net proceeds be less than the at- tributable net proceeds. "(e) The Authority's share of attributable net proceeds sha.l I Le (3etermined in accordance with the following i{~ SCI schedule: "(i) Years 1-6 of commercial production ..... 40% ( "i) Years 7-12 of commercial production... 70% %f "(iii) Years 13-20 of commercial production... 80% "(f) The Authority's share of attributable net proceeds shall not be raised from 40 per cent to 70 per cent in the years 7-12 unless the Contractor's total net pro- ceeds plus his recovery of development costs less his payments to the Authority in the preceding years are equal to the development costs incurred prior to the : commencement of commmercial production. The Authority's share of attributable net proceeds shall not be raised from 70 per cent to 80 per cent in the years 13-20 - , 2 aS unless the Contractor's total net proceeds plus his ..=::-4 recovery of development costs less his payments to the . Authority in the preceding years are equal to twice ., Lt-sS ~the development costs incurred prior to the commence- ':t-3i mnent (it commercial production." (46246) F 46 I_� -el�~~~~~7. tZ'' -I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- fro'k of chdr(It, Requeists (v~copt by %,11,111bets otof ijrefr tio' .1dd(tiorial (Ju~iti tif'% hoildOj~ bu~ jicofnpijiat.-d by Imi iv' en of Si (JO per Copy Requrests for sminle copies (withiou t c~haffe) r~~ all ~Shoulid he sent to:3 US. General Accountinq Office DisriutonSection, Room Ui 18 44 i G S treat, NW. Vlashington, DC 205481 Rk.QLC-uStS for mul tiple copes should he sent wvith checks or money orders to~ U S, Gen.rlil Accoun ti ng Off icv 4 ~~~~~~~~~Distrif uion miisvkioni V~j'hol, 'lot,toi DC 200 13 '* Checks or nion(*y orders should he gnade p~yj1b~iI. to the U S. GeneralI Accountiniq Of fci?. %OT E S tamps or Superintetndent of Documents coupons will not be accepted. ~ PLEASE DO NOT SEND CASH To texpdilf- illinq your order, use the re- port liumbevr and (late in the lowver riolit corner of the front cover. 7l GAO r-ports are' now available on micro fLCh.. f siictl Coll e.s will mfl~t? Your fltfivds. b#! sure to srwcify WA~i you wanit ruic roficl'e copes