Ocean Resources and U.S. Acceptance of the LOS Convention

[John E. Noyes is the Roger J. Traynor Professor of Law at California Western School of Law.]

The U.S. Senate Foreign Relations Committee is currently holding hearings on U.S. acceptance of the 1982 Convention on the Law of the Sea, as modified by the 1994 Part XI Implementation Agreement (the “LOS Convention”).  The Committee favorably reported the LOS Convention in 2004 and again in 2007, but the full Senate did not vote then.  162 parties, including all major powers except the United States, have accepted the Convention.

The hearings take place in a highly partisan political environment.  Yet U.S. acceptance of the LOS Convention is receiving much high-level support from across the political spectrum.  Military leaders support U.S. accession, for reasons James Kraska explores in his post.  Other supporters include:  U.S. oil and gas companies; U.S. telecommunications companies with undersea cables; U.S. shipping companies; Lockheed Martin, the lone U.S. company still holding U.S. licenses for deep seabed hard mineral exploration; environmental organizations; past U.S. State Department Legal Advisers; former Republican Secretaries of State Henry Kissinger, George Shultz, James Baker III, Colin Powell, and Condoleeza Rice; and Presidents George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama.

I appreciate Julian Ku’s invitation to discuss the LOS Convention’s complex resources provisions.  Let me introduce some basics concerning the exclusive economic zone (EEZ) and fisheries, the continental shelf and oil and gas resources, and seabed mineral resources beyond the limits of national jurisdiction, and explore why accepting the Convention would promote commonly perceived U.S. interests.

First, the Convention allows coastal states to regulate fisheries in the EEZ, extending up to 200 nautical miles from baselines, where ninety per cent of commercial fish are found.  In the EEZ coastal states may exclude foreign fishing or license it on their own terms and conditions.  (Other rules, most developed in accordance with the 1995 U.N. Fish Stocks Agreement that the United States ratified in 1996 and through law other than the LOS Convention, govern fish stocks that range beyond the EEZ.)  The U.S. coastal fishing industry has benefited enormously from EEZ fishing rights, because the United States has the world’s largest EEZ.  Existing U.S. law already tracks the Convention’s EEZ fishing provisions, which are not now controversial.  But if the basic concept of an EEZ and the Convention’s EEZ fisheries provisions now seem grounded in customary international law, other EEZ Convention provisions are not so secure.  EEZ-related arguments favoring U.S. accession focus on Article 58’s guarantee of freedom of navigation and overflight for all states in EEZs.  U.S. officials document a “resurgence of creeping jurisdiction” by coastal states within their EEZs that threatens U.S. navigation.  U.S. acceptance of the Convention will allow the United States to affirm EEZ and other navigational rights as treaty law.  U.S. acceptance may well decrease the need for this country to spend dollars, use force or political capital, or make concessions on other fronts to try to assert those rights as a matter of customary international law or new bilateral treaty law.

Second, joining the Convention would help assure the stability of U.S. claims to oil and gas on a continental shelf extending in places beyond 200 nautical miles from baselines.  Coastal states have exclusive rights to living and non-living resources on their continental shelves, although other countries also have important rights there.  The LOS Convention sets criteria and a procedure for determining continental shelf outer limits.  These limits replace those in the 1958 Convention on the Continental Shelf, which the United States negotiated and accepted after other countries responded to the unilateral 1945 Truman Continental Shelf Proclamation by making incompatible and extensive claims over coastal zones.  Article 1 of the 1958 Convention defines the continental shelf in part as the seabed and subsoil outside the territorial sea but “adjacent to the coast.”  Article 76 of the LOS Convention eliminates the adjacency limit, provides that each State Party has a legal continental shelf extending to at least 200 nautical miles from baselines (unless restricted by a boundary with a nearby state), and sets specific criteria under which some continental shelves may extend beyond 200 miles from baselines.  The LOS Convention promotes the reliability of coastal states’ outer limits lines by creating a technical body, the Commission on the Limits of the Continental Shelf (CLCS), to which States Parties must submit data about outer limits features beyond 200 nautical miles from baselines.  The CLCS then makes recommendations; outer limits lines set by a state in accordance with the Convention “on the basis of” CLCS recommendations “shall be final and binding” (Article 76(8)) and must be recognized by other States Parties.  To date the CLCS has received sixty submissions and has made fourteen recommendations.  We do not write on a blank slate.  The LOS Convention provides the means to assure determinate, globally recognized continental shelf outer limits beyond 200 nautical miles.  U.S. acceptance of the LOS Convention would allow the United States to establish a treaty-based right to an extended continental shelf and make use of the CLCS process – the main reason why U.S. oil companies, interested in stable legal claims to oil reserves on a continental shelf that may extend up to 600 miles off the U.S. coast, support U.S. accession.  Election of a U.S. member to the CLCS would also provide a way to evaluate extensive continental shelf claims made by other states.

Third, the LOS Convention established an autonomous treaty body, the International Seabed Authority (ISA), which registers and approves, according to clear criteria, applications for seabed mining activities in the “Area,” i.e., the seabed beyond the limits of national jurisdiction.  In 1982, when the LOS Convention negotiations concluded, President Reagan objected to some specific seabed mining provisions in Part XI of the Convention that were excessively anticompetitive or that gave the United States an insufficient say concerning ISA decisions or changes to Part XI.  Under the U.S.-backed 1994 Implementation Agreement, the Part XI provisions to which President Reagan objected were eliminated or changed in ways that, I believe, remedied those objections.  The 1994 changes certainly convinced other developed countries, which previously had remained outside the Convention, to join.  States Parties to the LOS Convention have sponsored seventeen ISA applications for their own companies and entities under the revised regime.  The ISA has approved twelve of these applications, thus providing international recognition of rights to explore for deep seabed hard minerals in specified, non-overlapping sites, and will consider the other five applications at its July meeting.  Again, we do not write on a blank slate.  No company can obtain internationally recognized deep seabed property rights (and title to recovered minerals) except through the LOS Convention’s processes – the Convention requires States Parties to refuse to recognize asserted rights or title not obtained through those processes – and the Convention guarantees the stability of deep seabed rights obtained pursuant to the Convention.  In a May 17, 2012, letter, Lockheed Martin, which holds the only exploration licenses under the U.S. Deep Seabed Hard Mineral Resources Act, gave its “strong support for speedy ratification” of the LOS Convention:  “[T]he multi-billion dollar investments needed to establish an ocean-based resource development business must be predicated upon clear legal rights established and protected under the treaty-based framework of the LOS Convention, including the International Seabed Authority. … [W]ithout ratifying the LOS, the United States cannot sponsor claims with, or shape the deep seabed rules of, the ISA.”  The United States can secure internationally recognized deep seabed mining rights for its companies only by joining the LOS Convention.

Opponents object to Article 82 of the LOS Convention.  Article 82 is a revenue-sharing provision requiring coastal states, beginning after the fifth year of production of continental shelf resources beyond 200 miles from baselines, to pay a small percentage of those resources for economic development projects.  These fees for access to an extensive new portion of the continental shelf are less than the royalties companies pay foreign countries to drill off their coasts.  Article 82 was negotiated along with Article 76.  The result was international recognition of an extended continental shelf and coastal state rights to resources there, in areas that otherwise would have been part of the Area; the quid pro quo was Article 82.  The ISA’s Council – not its one-country, one-vote Assembly – effectively controls how Article 82 payments are to be made; and under the 1994 Implementation Agreement, the United States, should it join the LOS Convention, may block payment plans with which it disagrees.  Revenues generated through Article 82 will eventually come from projects on extended continental shelves worldwide.  Votes on Article 82 funds will give the United States a dispositive say over how all those funds (not just U.S. funds) are spent, expanding U.S. influence over international financial aid and potentially replacing existing unilateral U.S. aid.

It is important not to lose sight of the big picture.  The LOS Convention was a remarkable success for U.S. negotiators.  It secured treaty rights that the United States did not have under pre-existing international law – treaty rights that remain essential to U.S. security – and furthered the goal of a rule of law for common spaces.  The Convention also established mechanisms for developing and stabilizing international law in which the United States, as a non-party, cannot currently participate.  U.S. acceptance of the Convention will provide the United States and its companies with internationally recognized property rights to ocean resources.  The United States could, by staying outside the Convention, try to remain a free rider, asserting that particular Convention provisions are established as a matter of customary international law.  But many such assertions are and will be strongly disputed, and they cannot substitute for the international institutional paths important to securing stable property rights over many ocean resources.