UNCLOS: A Response to Professors Kraska, Noyes, and Allen

[Steven Groves is a Bernard and Barbara Lomas Fellow at The Heritage Foundation in Washington D.C.]

Many thanks to Julian Ku for inviting me to participate in this UNCLOS debate on one of my favorite websites.

There is much I agree with in the posts of Professors Kraska, Noyes, and Allen.

Professor Kraska correctly emphasizes the victory achieved by U.S. negotiators at UNCLOS III in regard to codifying navigational regimes, particular the regime of transit passage through international straits.  Transit passage, along with archipelagic sea-lanes passage and the refinement of the “innocent passage” regime through territorial seas, are indeed the crown jewels of the Convention.  What must be understood, however, is that the United States need not accede to the Convention in order to benefit from its great successes at UNCLOS III.  The navigational provisions reflect customary international law, binding on all nations regardless of their membership or non-membership in UNCLOS.  In Professor Kraska’s words, “the navigational provisions are set in stone, and all of the benefits inure to maritime power.”  I could not agree more.

I also agree with Professor Noyes that accession would allow the United States to submit claims regarding the U.S. “extended continental shelf” (ECS) beyond 200 nautical miles to the Commission on the Limits of the Continental Shelf (CLCS) in New York.  Where we may part ways is whether such submissions are necessary either to (a) achieve international recognition of the U.S. ECS, or (b) foster development of the U.S. ECS by oil companies.  Indeed, the United States has successfully delimited key areas of its ECS in the Gulf of Mexico, the Bering Sea, and the Arctic Ocean via bilateral treaties with Mexico and Russia.  The CLCS procedure would arguably result in Uruguay and Uganda’s recognition of the limits of the U.S. ECS, but I doubt that it’s necessary to attain the recognition of those countries (or any other country with whom the U.S. does not share a continental shelf border) in order to develop the resources of the U.S. ECS.

U.S. and foreign oil companies appear to agree, since they are spending millions of dollars for leases on areas of the U.S. ECS in the Gulf of Mexico in an area called the “western gap.” The U.S.has offered ECS blocks located on the western gap in 19 lease sales held between August 2001 and March 2010. In connection with those sales, seven U.S.companies (Burlington, Chevron, Devon Energy, Hess, Mariner Energy, NARCA Corporation, and Texaco) submitted bids to lease blocks in the western gap. Five foreign companies—BP, Eni Petroleum (Italy), Maersk Oil (Denmark), Petrobras (Brazil), and Total (France)—also bid on western gap ECS blocks during those sales. The U.S. Treasury received more than $47 million in bids in connection with lease sales on those blocks.

Of the approximate 320 blocks located in whole or in part on the western gap ECS, 65 (approximately 20 percent) are currently held under active leases by nine U.S. and foreign oil exploration companies, including BP, Chevron, Cobalt International Energy, Eni, Maersk, Petrobras, Total, Statoil (Norway), and Union Oil.

Regarding the transfer of hydrocarbon royalty revenue pursuant to Article 82, we are probably going to have to agree to disagree, but the central fact is this: There has been no comprehensive study to determine the value of the oil and natural gas that lies beneath the U.S. ECS, which in total is reportedly twice the size of California. How can we be expected to conduct a proper assessment of the financial impact of U.S. accession to UNCLOS if the value of the natural resources on the U.S. ECS is unknown? If the value of U.S. hydrocarbons on the ECS is unknown then so too is the amount of royalty revenue that the U.S. will ultimately forgo if it accedes to the Convention.  Accession to UNCLOS therefore amounts to an open-ended international commitment to transfer an indefinite sum of royalty revenue (indefinite, but likely in the tens if not hundreds of billions of dollars) to the International Seabed Authority for redistribution to developing and landlocked nations.

Professor Allen’s post reflects, I believe, the current state of the debate—one school of thought that maintains the U.S. doesn’t need UNCLOS so it should avoid the potential costs of accession, and another school that wants to pocket the Convention’s benefits and believes that the costs are either nonexistent or de minimis.  For many years, the bulk of the testimony heard in the Senate and the vast majority of the ink spilled in law review articles and op-ed pages extolled only the virtues of UNCLOS without even a passing reference to the potential costs.  Over the past several years, however, more and more discussion of the potential costs—real or imagined—has occurred.

My view is that there are at least two significant costs associated with accession:

• As I mentioned earlier, if the U.S. accedes to UNCLOS, it will be required by Article 82 to transfer royalties generated from hydrocarbon production of the U.S. ECS to the International Seabed Authority for redistribution to developing and landlocked countries. Since the value of the hydrocarbon resources lying beneath the U.S. ECS may be worth trillions of dollars, the amount of royalties that the U.S. Treasury would be required to transfer to the Authority would be substantial. In any event, U.S. accession would amount to an open-ended commitment to forgo an incalculable amount of royalty revenue to corrupt, undemocratic, or despotic regimes.
• U.S. accession to UNCLOS would expose the U.S. to lawsuits regarding virtually any maritime activity, such as alleged pollution of the marine environment from a land-based source or through the atmosphere. Regardless of the lack of merits of such a case, the U.S. would be forced to defend itself against every such lawsuit at great expense to U.S. taxpayers. Any adverse judgment rendered by an UNCLOS tribunal would be final, could not be appealed, and would be enforceable in U.S. territory.

It is against these real costs and risks—which have not been adequately addressed in the Senate or elsewhere—that the supposed benefits of U.S.accession must be weighed.  In my view—which is based on the available evidence, current U.S. law and policy, customary international law, U.S. experiences in other international organizations, the U.S. record in international tribunals, and of course the provisions of the Convention itself—the benefits of accession are outweighed by the costs.