686 MCGILL LAW JOURNAL [Vol. 17 of the private sector on the delegation,296 certainly the views of various interested groups within the United States and Canada were fully and fairly represented. An example was the advice to the U.N. Seabeds Commitee that the cost of developing deep ocean resources would make it clearly inappropriate for the proposed international agency to have the power to develop resources directly, a position popular with both the U.S. petroleum and mining interests. A U.S. representative stated: But while the organization we propose would have strong supervisory and regulatory powers, and would be authorized to issue licenses to private organizations and to organizations created by States or groups of States, it would not in itself have the power to undertake seabed exploration and exploitation. We do not believe that an international organization with monopolistic powers, including the power to undertake for itself exploration and exploitation, would be an efficient means of developing these resources or of generating revenues from their production. Such an arrangement would not achieve our basic objective of developing the greatest benefit for mankind. Nor would it provide the incentives to operators and financial institutions to make the investments necessary to undertake ocean mining ventures. 297 In most of the countries of the world, including the United States, the resource owner has the capability of developing the resource, if it wishes. The United States and its states have chosen to encourage private participation in resource development,298 although governmental resource development has occurred in the United States.299 In many other countries, however, the contracts negotiated with the resources developers are so detailed as to required development and other elements as to actually put the government "in the business".299 Examples of this would be the North Sea development contracts issued for petroleum by the Governments of Norway Geologist, U.S. Geological Survey, to Subcommittee I, U. N. Seabeds Committee, dated August 4, 1971, and Donald L. McKernan, Alternate U.S. Representative, to Subcommittee II, dated August 17, 1971, United States Mission Geneva Releases regarding, respectively, seabeds resources and fisheries resources. 296 See List supra, n. 295. A large number of U.S. nationals representing affected industry groups, particularly petroleum and fishery, were present and briefed by the U.S. Delegation. 297 Statement by Bernard H. Oxman to Subcommittee I, U.N. Seabeds Committee, dated August 18, 1971, United States Mission Geneva Release, p. 3. 298 See supra, n. 169. 299 See Long Beach Net Profits Contract, 2 Nossaman OCS Study, App. 12, p. 12-A-16 et seq., 12-A-156 et seq.; Krueger supra, n. 167 at pp. 789-790. No. 4] EVALUATION OF UNITED STATES OCEANS POLICY 687 and the United Kingdom.300 In the developed socialist countries, of course, it is customary for the sovereign to develop the resources.301 Developing countries typically do not, regardless of their political philosophy, because of the costs of operation which indicates quite accurately that this is an economic issue.302 As such, it should not be unacceptable to the United States, the U.S.S.R., or any developed power that the proposed international agency have the power of developing resources under its jurisdiction. With due regard to the economic realties involved, it will probably be many years before the proposed international agency has the financial ability to exercise this power, but conceptually it should have it.303 300 See 2 Nossaman OCS Study, App. C at pp. 12-C-59 (Norway), 12-C-75 (United Kingdom). 301 An example is the Soviet Union which has a large and technologically advanced petroleum industry administered by the government. Note, however, that for grounds apparently arising out of Marxist theory, it would not wish to have self-directed development by the proposed international oceans agency and the potential competition which could occur from it. See supra, n. 171. Cf. Venezuela which since 1956 has had a governmental corporation, Corporacion Venezolana de Petroleo ("C.V.P.") with the power to develop petroleum either through a "mixed company" in which it and a private company are participants or at its option by itself. See 2 Nossaman OCS Study, App. C at p. 12-C-90 et seq. 302 This is particularly true of offshore mineral development in which the "start-up" costs, particularly for petroleum, can be enormous. See Krueger, supra, n. 167 at pp. 777, 785 and 786 et seq.; 1 Nossaman OCS Study at p. 606. 303 If a resource owner, such as the proposed international oceans agency, has discretion over work and development requirements, as it should have, a license for the exploitation of the resource can have a broad range of terms depending largely on the economic potential of the resource. The provisions of the U.S. draft convention, for example, are broad enough to accommodate virtually any form of lease, operating agreement, joint venture agreement or concession known to the U.S. petroleum and mining industries. See Draft Convention, art. 18, App. A, para. 7. See supra, nn. 299, 302. It is, therefore, of little consequence whether the agency is permitted to directly develop the resource itself and it would seem to serve little purpose to emphasize the economic incompetence of the developing countries or the proposed international agency to undertake this work. Cf. Oxman statement supra, n. 297 at p. 2. It is noteworthy that the Working paper on the regime for the sea-bed and ocean floor and its sub-soil beyond the limits of national jurisdiction U.N. Doc. A/AC.138/49, introduced by Trinidad and Tobago on August 10, 1971, would effect in the words of the sponsors: "In keeping with the principle of the common heritage, the co-sponsors of the Working Paper contained in document A/AC.138/49 envisage the establishment of a system in which mankind, in the capacity of owner, would participate directly in the administration and management of the 688 MCGILL LAW JOURNAL [Vol. 17 The Soviet Union also tabled a draft seabeds treaty in the summer of 1971 with the U.N. Seabeds Committee.304 The treaty, while largely structural in nature, stated the interest of the Soviet Union in preserving its position in the foreign fisheries and the free transit of the oceans: The use of the sea-bed and the subsoil thereof for the purpose of exploring and exploiting its resources shall not conflict with the principles of freedom of navigation, fishing, research and other activities on the high seas.805 The "Question of the limits of the sea-beds",306 the "Question of licences for industrial exploration and exploitation of sea-bed resources",307 and the "Question of the distribution of benefits"308 were left as unsettled issues. The statements of the Soviet representatives to the U.N. Seabeds Committee, however, confirmed the the priority of the items on which a position had been taken in very direct terms: To recognize a state's rights over the biological resources of the high seas in that way amounted to making it responsible to the international community for a full and rational exploitation of the fish stocks and, moreover, to placing an obligation on it not to permit over-exploitation which might be detrimental to the replenishment of the stocks. It was very unlikely that the coastal state could fulfil such a task on its own without international co-operation and without the help of scientists and specialists from other countries concerned. In those circumstances, the conferring of responsibility for such functions on the coastal state area and the exploitation of its resources. Although in its initial stages it may not be possible under the system for mankind by itself to undertake activities in the area, it may nonethless enter into arrangements with third parties for the attainment of its objectives." * ** "It would be therefore more in consonance with the principle of the common heritage for such a body in the early stages to enter into joint ventures, production-sharing and profit-sharing arrangements with other entities, public or private, national or international rather than to grant or issue licences to such entities. The concept of a licensing or concession system is in our view inconsistent with the principle of the common heritage." Report of Subcommittee I, U.N. Seabeds Committee, U.N. Doc. A/AC.138/60, August 26, 1971, p. 6. 304 U.S.S.R. Provisional Draft Articles of a Treaty on the Use of the Sea-Bed for Peaceful Purposes, U.N. Doc. A/AC.138/43 (July 22, 1971). 305 Id., art. 4. 306 Id., art. 3. 307 Id., art. 9. 308 Id., art. 14. Emphasis added. No. 4] EVALUATION OF UNITED STATES OCEANS POLICY 689 might bring no advantages, but could be contrary to the interests of states, including the coastal state itself. No state could claim that it alone had the right and capacity to protect the resources of the zones adjacent to the high seas. 309 In stating its position, the Soviet delegation was not only anxious to protect the interests of the USSR, but it also has the sincere desire to find a flexible solution which would fully meet the interests of all. The articles of the treaty which the Committee was to draft must be universal in character and must be acceptable to all countries.310 The realistic way to arrive at an equitable solution of the problem was to recognize the specific rights of the coastal state to exploit marine resources within the 12-mile territorial limit, taking into account, in an equitable manner, the interests of states engaged in deep-sea fishing. For its part, the Soviet Union was ready to make every effort to bring the work to a successful conclusion.311 The debate had shown that opinions on the question of the territorial sea were divided. As ninety States had accepted a twelve-mile limit, it had been requested that that limit should be recognized and codified. The USSR shared that view. Other States, however, had requested that a distance of 200 miles should be adopted in order to protect the interests of coastal States. In his opinion, the distance of twelve miles ought to satisfy all States, and he hoped that the States which had asked for a greater distance would withdraw their claims, so as to avoid further difficulties and pave the way for a compromise solution. 312 [S]traits... should [be defined] more precisely. It had been pointed out that many straits would be affected if the breadth of the territorial sea was set at twelve miles. Only, the main straits, which played an important part in international navigation, should, however, be considered, and a list of such straits should be drawn up. The concerns and interests of the coastal States should obviously be taken into account in that connexion. What was wanted by countries like the USSR, which had requested freedom of transit in the territorial seas, was a reasonable, but not an absolute freedom of transit. He suggested that the Sub-Committee might include in its draft articles provisions covering the interests of coastal States in that respect.313 While the United States has relatively limited interest in foreign fisheries,314 its position regarding other ocean issues appears en 309 Prov. Sum. Rec. A/AC. 138/SC.II/SR.12 (August 17, 1971) at p. 10. Emphasis added. 310 Id., at p. 11. 311 Ibid. 312 Prov. Sum. Rec. A/AC. 138/SC.II/SR.13 (August 17, 1971) at p. 11 313 Id., at p. 12. 314 The United States distant-water fisheries consist principally of tuna, fished off Peru and Ecuador, and shrimp, fished off Mexico. It is small 690 MCGILL LAW JOURNAL [Vol. 17 tirely consistent with those of the Soviet Union. It is interesting to note the sense of accommodation that both have in order to preserve a right of free transit through the world's oceans.315 A number of other draft conventions and working papers were submitted on the subject of the régime for the administration of the seabeds or oceans beyond limits of national jurisdiction during 1971, including those by the United Kingdom,316 France,317 Poland,318 Tanzania,319 Trinidad and Tobago et al.,320 Afghanistan et al.,321 Ca in proportion to the coastal fishing industry operating off the United States. See Ratiner, supra, n. 37 at p. 235; Loring, supra, n. 91 at p. 424 et seq. 315 Compare text at nn. 294 and 313, supra. 316 The United Kingdom working paper submitted essentially proposed a mining code for seabed resources, U.N. Doc. A/AC.138/46 (July 30, 1971). See also Report of Subcommittee I supra, n. 303 at p. 3. 317 The French working paper was also directed essentially to the exploitation of seabed resources. Id., at p. 4. 318 The Polish working paper submitted contained the following suggestion: "The organization to be established, and its nature and powers, should be adapted to growing needs. This means that, initially, before the exploitation of mineral resources of the international area is conducted on a large scale, the organs of the organization should not be over-developed, its secretariat should be small, and the competence of the organization should first and foremost be of a co-ordinating nature. This would be for the transitional period. The duration of this stage should depend on the progress of exploration and exploitation of the resources of the international area and, consequently, on the emergence and development of the need for institutionalized arrangements for international co-operation." U.N. Doc. A/AC.138/44 (July 28, 1971), para. 10. Cf. Part II, A3 supra, at n. 138 et seq. 319 The Draft Statute as submitted by Tanzania would authorize the proposed international agency to itself exploit the resources of the international area and emphasized that the agency should "pay particular attention to the desirability of minimizing fluctuations of prices of land minerals and raw materials that may arise from the exploitation of resources of the area". U.N. Doc. A/AC. 138/33 (March 24, 1971), arts. 16, 2(2). See Report of Subcommittee I supra, n. 303, at p. 5. 320 Id., at p. 5. See supra, n. 303. 321 The preliminary working paper submitted by Afghanistan, Austria, Belgium, Hungary, Nepal, Netherlands and Singapore essentially represented the view of land-locked and shelf-locked states. It proposed that a coastal state have a "priority zone" extending 40 miles from the outer limit of a twelvemile territorial sea of basically the same type proposed as a trusteeship zone in the U.S. Draft Convention. U.N. Doc. A/AC.138/55, August 19, 1971,art. IC. See Report of Subcommittee I supra, n. 303 at pp. 6-7. |