What is the LOST?
The genesis of the treaty was President Truman’s 1945 proclamation asserting U.S. jurisdiction over America’s continental shelf, and similar extensions of national control by other states. The First UNCLOS was opened in 1958; it drafted conventions dealing with resource jurisdiction and fishing. UNCLOS II convened in 1960 to take up unresolved fishing and navigation issues. Soon thereafter the possibility of seabed mining led the United Nations to declare the seabed to be the “common heritage of mankind.” A Seabed Committee was established, eventually leading to UNCLOS III, which first met in 1973. Nine years and eleven sessions later a treaty was born.
The LOST, which runs 175 pages and contains 439 articles, covers seabed mining, navigation, fishing, ocean pollution, marine research, and economic zones. Much of the treaty is unobjectionable, or at least unimportant when in error; the navigation sections are a modest plus. But not so Part 11, as the Orwellian provisions governing seabed mining are called. So flawed was this section that it could be fixed only by tearing it up.
The LOST’s fundamental premise is that all unowned resources on the ocean’s floor belong to the people of the world, meaning the United Nations. The U.N. would assert its control through an International Seabed Authority, ruled by an Assembly, dominated by poorer nations, and a Council (originally on which the then-U.S.S.R. was granted three seats), which would regulate deep seabed mining and redistribute income from the industrialized West to developing countries. The Authority’s chief subsidiary would be the Enterprise, to mine the seabed, with the coerced assistance of Western mining concerns, on behalf of the Authority.
Any extensive international regulatory system would likely inhibit development, depress productivity, increase costs, and discourage innovation, thereby wasting much of the benefit to be gained from mining the oceans. But the byzantine regime created by the LOST is almost unique in its perversity. Unfortunately, the amendments made in 1994, which I discuss below, do not change the essential character of the treaty.
For instance, as originally written, the treaty was explicitly intended to restrict, not promote, mineral development. Among the treaty’s objectives were “rational management,” “just and stable prices,” “orderly and safe development,” and “the protection of developing countries from the adverse effects” of minerals production. The LOST explicitly limited mineral production, authorizing commodity agreements (rather like OPEC). Further, the treaty placed a moratorium on the mining of other resources, such as sulphides, until the Authority adopted rules and regulations — which could be never.
The process governing mining reflected this anti‐production bias. A firm had to survey two sites and turn one over gratis to the Enterprise even before applying for a permit, in competition with the favored Enterprise and developing states. The Authority could deny an application if the firm would violate the treaty’s antidensity and antimonopoly provisions, aimed at U.S. operators. And the Authority’s decisions in this area were to be set by the Legal and Technical Commission, the membership of which could be stacked, and the 36‐member Council, which would be dominated by developing states, making access for American firms dependent upon the whims of countries that might oppose seabed mining for economic or political reasons.
Who Would Want to Bid?
Indeed, it is not clear that a firm would have wanted to bid even if it thought it could win approval. The convention required that private entrepreneurs transfer their mining technology to the Authority, for use by the Enterprise and developing states. The term technology was so ill‐defined that the Authority might be able to claim engineering and technical skills as well as equipment, yet the treaty imposes no effective penalties for improper disclosure or misuse of transferred technology. Miners would also have to pay their overseer, the Authority, and competitor, the Enterprise: $500,000 to apply, $1 million annually, plus a royalty fee. The sponsoring country would be responsible if a firm failed to pay; moreover, the industrialized West would have to provide interest‐free loans and loan guarantees, for which Western taxpayers would be liable in the event of a default, to the U.N.‘s mining operation.
All told, the Enterprise would enjoy free mine site surveys, transferred technology, and Western subsidies. The Enterprise also, naturally, would be exempt from Authority taxes and royalty payments. Also favored are developing states and 105 “land‐locked and geographically disadvantaged” countries.
Even this attenuated right to mine the seabed could have been dropped at the Review Conference to be held to assess the LOST 15 years after the commencement of commercial operations if three‐fourths of the member states so decided. The mere possibility of Third World states effectively confiscating potentially enormous investments made over more than a decade would have discouraged potential private entrepreneurs. That, in turn, would have given the well‐pampered Enterprise and likely state‐subsidized firms of developing states a further advantage.
Admittedly, such practical objections might seem of little import since the promise of seabed mining is far less bright today than it was when UNCLOS convened, but operations might still become economically feasible later this century, especially as technological innovation makes the mining process less expensive. But even if no manganese nodules are ever likely to be lifted commercially from the ocean’s floor, the LOST remains unacceptable because of its coercive, collectivist underpinnings.
The New International Economic Order
UNCLOS III was held in a different era, a time when communism reigned throughout much of the world, Third World states were proclaiming socialism to offer the true path to progress and prosperity, and international organizations were promoting the “New International Economic Order,” or NIEO, to engineer massive wealth redistribution from the industrialized to the underdeveloped states. Indeed, much of the LOST, particularly regarding seabed mining, was dictated by the so‐called Group of 77, the developing states’ lobby.
These nations saw the LOST as the leading edge of a campaign that included treaties covering Antarctica and outer space, expanded bilateral and multilateral aid programs, and a veritable gallery of UN alphabet‐soup agencies — CTC, ILO, UNCTAD, WHO, and WIPO. Commented former Maltan U.N. Ambassador Arvid Pardo, who coined the phrase, “common heritage of mankind,” American acceptance of the sea treaty “however qualified, reluctant, or defective, would validate the global democratic approach to decision making.”
Economic reality eventually hit many poorer states. Developing states began to adopt market reforms and the NIEO disappeared from international discourse, along with any mention of the LOST.
Although American ratification of the LOST would not be enough to resurrect the NIEO, it would nevertheless enshrine into international law some very ugly precedents. One is that the nation states (not peoples) of the world collectively own “all the unclaimed wealth of this earth,” in the words of former Malaysian prime minister Mahathir Min Mohamad. Granting ownership and control to petty autocracies with no relationship to the resource and nor any ability to contribute to their development makes neither moral nor practical sense. The LOST raises to the status of international law self‐indulgent claims of ownership to be secured through an oligarchy of international bureaucrats, diplomats, and lawyers. And the treaty’s specific provisions, mandating global redistribution of resources, creating a monopolistic public mining entity, restricting competition, and requiring the transfer of technology, reflect the sort of statist panaceas that were discredited by the historical wave that swept away Soviet‐style communism and lesser socialist variants around the globe.
Some observers acknowledged the treaty’s failings, but nevertheless contended that it had more than enough positive benefits to warrant signing. However, gains in other areas are limited at best. Many of the non‐seabed provisions are marginally beneficial, while a number are somewhat harmful. Sections governing fishing and maritime research, for instance, make few changes in current law; the boundary‐setting process strips some resources away from the U.S.; the pollution provisions restrict America’s ability to control some emission sources; and the U.S. might eventually have to share oil revenues from development of the outer‐continental shelf. The treaty’s authorization of 200‐mile exclusive economic zones (EEZs) merely reflects what has become customary international law.
Perceived as far more important are the navigation provisions. A number of officials at both the Departments of State and Defense have argued that the document is vital to guarantee American naval rights. Yet Washington’s refusal to sign the LOST left critics predicting chaos and combat on the high seas two decades ago — since then we have witnessed not one incident as a result of America’s failure to join the LOST.
Nor is the treaty unambiguously favorable to transit rights. The document introduces some new limitations on navigation involving the EEZs, territorial seas, and water surrounding archipelagic states. At other times the LOST’s language is ambiguous — regarding transit rights for submerged submarines, for instance — limiting the value of the treaty guarantee. International law analyst Gary Knight even argues that “the difficulty of establishing our legal right to EEZ navigation and submerged straits passage would be no more difficult under an existing customary international law argument than under the convoluted text of the proposed UNCLOS.” In short, there is only modest theoretical advantage in this area for which to trade away the mining provisions.
Moreover, any LOST legal protections offer little by way of real practical gain. Few nations are likely to interfere with commercial shipping because they have far more to gain economically from allowing unrestricted passage. Where countries perceive their vital national interests to be at stake — Great Britain in World War I and Iran and Iraq during their war throughout the 1980s — they are not likely to allow juridical niceties to stop them from interdicting or destroying international commerce. Even unambiguous rights under international law did not protect American vessels and aircraft when North Korea seized the USS Pueblo and China held the EP-3 surveillance plane. Most coastal nations will make policy based on perceived national interest more than abstract legal norms.
Indeed, LOST membership has not prevented Brazil, China, India, Malaysia, North Korea, Pakistan, and others from making ocean claims deemed excessive by some. In testimony last October Adm. Mullen warned that the benefits he believed to derive from treaty ratification did not “suggest that countries’ attempts to restrict navigation will cease once the United States becomes a party to the Law of the Sea Convention.”
As for military transit, with or without the LOST, America needs to concentrate on maintaining good relations with the handful of strategically‐placed countries. The prowess of the U.S. Navy, not the LOST, will remain the ultimate guarantor of America’s ability to roam the seas. Of course, even with friendly states Washington would prefer not “to have to use muscle to exercise our rights,” observed former LOST negotiator Elliot Richardson. But the treaty is likely to matter only where countries have neither the incentive nor the ability to interfere with U.S. shipping. Moreover, in a world in which the U.S.S.R. has disappeared, the Red Navy is rusting in port, China has yet to develop a blue water navy, and Third World conflicts no longer threaten America through their connection to the Cold War, Washington is rarely going to have to send its fleet where it is not wanted.
Another concern is the impact of LOST on the President’s Proliferation Security Initiative. Although treaty advocates suggest that the LOST would provide an additional forum through which to advance the PSI, it seems more likely that adherence to LOST would constrain Washington’s ability to intercept weapons shipments which are problematic, even if legal under international law, including the treaty. After all, any anti‐proliferation policy treats nations differently based upon a subjective assessment of the stability and intention of a particular regime. The LOST makes no such distinctions. At best, the treaty is ambiguous regarding the seizure of WMD shipments. Adopting such ambiguity probably does not strengthen Washington’s position.
Further, treaty advocates contend that whatever the faults of LOST, only participation in the treaty can prevent future damaging interpretations, amendments, and tribunal decisions. However, there is no guarantee that interpretations under the LOST would not impinge upon U.S. military activities. In his Senate testimony last fall, State Department legal adviser William H. Taft IV noted the importance of conditioning acceptance “upon the understanding that each Party has the exclusive right to determine which of its activities are ‘military activities’ and that such determination is not subject to review.” Whether other members will respect that claim is not so certain. Adm. Michael G. Mullen, the Vice Chief of Naval Operations, acknowledges the possibility that a LOST tribunal could assert jurisdiction and rule adversely, impacting “operational planning and activities, and our security.”
Moreover, American friends and allies, both in Asia and Europe, have an incentive to protect American navigational freedom. So long as the U.S. maintains good relations with them — admittedly a more difficult undertaking because of strains in the aftermath of the war in Iraq — it should be able to defend its interests indirectly through surrogates. If the nations which most benefit from American navigational freedom are unwilling to aid the U.S. while Washington is outside the LOST, they are unlikely to prove any more steadfast if Washington is inside the LOST.
Collectivism or Chaos?
The final argument on behalf of the LOST is that no matter how unfavorable it may be for international mining, it is better than nothing. Without some security of tenure to deep sea mining sites, it is said, companies will not invest the millions necessary to begin operations. Certainly firms will not take the potentially enormous risks of such a new venture if they might face conflicting claims under a competing treaty and regulatory regime.
However, most businessmen understand that it makes little difference whether or not, say, Zimbabwe recognizes their right to harvest manganese nodules in the Pacific. Indeed, given the dynamics of seabed mining, it probably doesn’t even matter if other industrialized nations, with firms capable of mining the ocean floor, recognize one’s claim. The seabed’s irregular geography and surplus of nodules make “poaching” uneconomical — it would make more sense to develop a new site rather than attempt to overrun someone else’s. The dynamics of other resource development vary to some degree, but in general it would have been quite simple to build a simple alternative to the LOST.
In 1980 the U.S. passed unilateral legislation, The Deep Seabed Hard Minerals Act, to provide interim protection for American miners until implementation of the LOST. The Act could have been amended to create a permanent process for recording seabed claims and resolving conflicts. Such legislation could then have been coordinated with that of the other leading industrialized states through a formal treaty. No international bureaucracy was ever necessary.
In the end, a bad treaty is worse than no treaty. Back when the LOST was a major political issue, the American Mining Congress observed: