APPENDIX [Under authority previously granted, the following statements and communications were ordered printed:] [Telegram] SAN FRANCISCO, CALIF., June 27, 1973. COMMITTEE ON INTERIOR AND INSULAR Affairs, Subcommittee on Minerals Materials and Fuel, U.S. Senate, Washington, D.C. GENTLEMEN: The Bar Association of San Francisco is opposed to S. 1134, the "Deep Seabed Hard Mineral Resources Act", now pending before the Sub-Committee on Minerals Materials and Fuels and recommends against its being favorably reported and against passage. The views of the Bar Association of San Francisco, based on the analysis and report of its special committee on the Law of the Sea, are contained in a letter of even date herewith which will follow. We respectfully request that this telegram and the letter to follow be made a part of the record of the hearings on S. 1134. MICHAEL TRAYNOR, President, Bar Association of San Francisco. THE BAR ASSOCIATION OF SAN FRANCISCO COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Re: S. 1134; Deep Seabed Hard Mineral Resources Act Gentlemen: In February, 1971 the Bar Association of San Francisco created a Special Committee on the Law of the Sea "to examine the current law and proposals to alter that law in order to recommend in principle a body of law to (1) prevent conflict among nations, (2) assure maximization of use of the ocean's resources consistent with sound ecological principles, and (3) estabilsh a system that will allow equitable distribution of the ocean's wealth." That committee was created in response to a perception of many members of the bar in San Francisco that the issue of the proper treatment of ocean space represented one of the most significant issues facing mankind at this point in history. Members of the Special Committee on the Law of the Sea evidenced an early interest in law of the sea issues. Over the past two years the Special Committee has undertaken to broaden its knowledge of law of the sea issues through meetings at which representatives of government and industry knowledgeable about the oceans and ocean law issues were heard and through exchanges of information with other groups. Members of the Special Committee have written articles on the law of the sea which have been or will be published in scholarly journals, teach law of the sea courses at California law schools and, in some cases, are professionally involved in representing industries concerned with developments in this area. The Special Committee brings to the attention of the Bar Association Board of Directors matters it considers to be of significance. It has advised us that the Subcommittee on Minerals, Materials and Fuels has held hearings on S. 1134, entitled the Deep Seabed Hard Mineral Resources Act. On the basis of the thoughtful recommendation and views of our Special Committee, set forth in detail below, we are opposed to S. 1134 and strongly recommend against its being favorably reported out of Committee and against passage. We ask that our views become part of the record on this bill. The governing principle is that the resources of the deep ocean belong to the community of man and should not be exploited except in a manner consistent with that principle. The resources of the deep ocean should be exploited for the common benefit of mankind, consistent with sound ecological principles, and not for the exclusive benefit of any particular segment of the world's population. In fundamental ways, S. 1134 contravenes these principles. The basic objections to the Bill follow. 1. A fundamental objection is that the bill is contrary in principle to the widely held view that the mineral resources of the deep seabed are the "common heritage of mankind” (i.e., belong to the community of man, so that the mineral resources cannot be exploited except for the common benefit of mankind). No principle of law existent provides a basis for an individual nation to exercise unilateral rights over mineral resources of the deep ocean seabed. While the bill purports to recognize the "common heritage" concept by providing for some limited revenue sharing, the bill in fact does not in any real sense recognize the substantial interest of the world community in the mineral resources of the deep seabed. 2. The bill has the obvious defect of not fixing the rights of United States nationals vis-a-vis the world community as might a broadly based multilateral arrangement. Rights would be fixed under the legislation only with respect to "reciprocating states" (i.e., states enacting similar legislation). Non-reciprocating states would be free to compete in the same areas. This would encourage nonreciprocating states to make separate and perhaps conflicting claims, thus leading to inevitable conflicts between countries over the ownership of mineral resources. 3. The legislation may foster unilateral extensions of jurisdiction over the deep seabed, if not as an offensive measure, as a defensive measure. It is difficult to envision that the community of nations would sit idly by while some states unilaterally exploited large areas of the deep seabed. 4. Whether or not the legislation fosters unilateral extensions of jurisdiction over the deep seabed, such legislation may well serve to harden the position of other countries with regard to other important uses of ocean space in the forthcoming law of the sea negotiations. For instance, enactment of domestic legislation such as S. 1134 will certainly render less flexible the position of the United States in negotiating a responsible, rational international rule of law for ocean space. 5. Miners successfully operating under an "interim" domestic regime would be inclined to exert pressure, to protect their own "vested" interests, in the process of the development of the U.S. position in any subsequent multilateral negotiations, thereby reducing the ability of the U.S. to advocate the most beneficial treaty terms. Further, any subsequent international regime may give rise to complicated and extremely costly claims against the U.S. government by mining operations, owned by U.S. and foreign interests, operating under an "interim" arrangement. 6. The bill incorporates an imprecise definition of the deep seabed. The "deep seabed" is defined to mean the seabed and its subsoil lying seaward and beyond the sovereign Continental Shelf of the United States and foreign nations, as defined in the 1958 Convention on the Continental Shelf. There is no agreement as to the breadth of the Continental Shelf. The shelf is defined in the Convention as the submarine seabed and subsoil adjacent to the coast but outside the territorial sea to a depth of 200 meters or, beyond that depth, to a depth where the superjacent waters admits of exploitation. The concepts of "adjacency" and "exploitability" have met with varying interpretations, with the result that the shelf could extend to a depth of 200 meters or to a depth that would include all submerged portions of the continental land masses. It has even been suggested that the Shelf Convention definition entitles a State to claim a sovereign "shelf" to the midocean. Since the proposed legislation adopts a boundary on which there is no agreement, there can be no agreement on what area of the deep seabed is covered by the legislation, that is, subject to licensing. Any exercise of jurisdiction to the seaward of the 200 meter isobath diminishes markedly the value of resources committed under the common heritage of mankind principle. An extension of the definition of the Continental Shelf to include the entire underseas continental land masses would, as a practical matter, destroy the "common heritage" principle, since almost all of the known, exploitable resources would be subject to the sovereignty of individual states. 7. The only mineral resources of current concern are manganese nodules, which are surficial deposits. It appears that we are a long way from having the tech nology to find and evaluate so-called bedrock or subsoil minerals and the technology for mining them. Accordingly, any immediate legislative scheme for ocean mining should limit itself to manganese nodules. It makes little sense to legislate rights to other minerals at this time, particularly when such legislation would result in clearly adverse consequences, as would S. 1134. 8. Under the pending legislation it would appear that large areas of the deep seabed could be tied up for long periods by one country, or for that matter, by one national of one country. Under Section 7 of the Bill, it would seem that general research and development expenditures (i.e., the cost of developing nodule recovery and process technology) might be applied to satisfy the minimum expenditure requirements as to a number of licensed "blocks", thus enabling one national to hold large areas for a considerable period of time. Further, expenditures in excess of the minimum required in any year may be carried over into subsequent years. 9. The benefits that would accrue to the world community under the proposed Act might well be negligible. Most developing countries willing to participate in the proposed scheme would apparently share in the fund composed of a percentage of the license fees collected by the U.S. and a percentage of the income tax revenues derived by the United States that is directly attributable to recovery of hard minerals from the deep seabed. The revenue from license fees would in all likelihood be small, however, and assuming that some sort of depletion allowance will apply to the revenue derived from sales of deep seabed minerals, the income tax revenue derived by the United States will likewise be small. Such being the case, there would be an extremely small pie indeed to be shared by the developing countries. 10. There are a number of potential legal problems with the proposed legislation generated by vague and general language (e.g., a license may be revoked for "willful, substantial" failure to comply with the Act, the fund to assist "developing reciprocating states" is to be derived partly out of income tax revenue “directly attributable to recovery of hard minerals from the deep seabed"). 11. "Comparable" legislation is the determinant of the status of "reciprocating state" under S. 1134. Since much of the fish for the bones of the proposed legislation will have to be supplied by administrative regulations, the comparability of the U.S. legislation with other countries' domestic legislaton may not be easily or meaningfully determined. Legislation comparable on its face might well operate quite differently when differently implemented by regulation. Hence, a multilateral treaty, which has the virtue of at least providing an identical basis on which to construct individual national regulatory structures, would be preferable. We recognize that there may be a legitimate need for and intrim regime that would permit the exploitation of the manganese nodules known to exist on the deep seabed. We urge, however, that such an interim regime should be one that is multilaterial, permits meaningful sharing of the "value" of the nodules among the community of man and adequately protects the ocean environment. We urge that S. 1134, which even though attempting to mitigate some of the worse aspects of a unilateral extension of national jurisdiction, threatens adverse consequences that far exceed any short term gain achievable through more rapid hard mineral exploitation, not be favorably reported. Respectfully submitted, MICHAEL TRAYNOR, President. ROLAND E. BRANDEL, Chairman, Special Committee on the Law of the Sea. PRE-PRODUCTION MANGANESE NODULE MINING BACKGROUND INFORMATION TO DESCRIBE TYPICAL EQUIPMENT, COST, TIME, AND RESOURCE REQUIREMENTS 15 March 1973 J. E. Flipse DEEPSEA VENTURES, INC. M. A. Dubs KENNECOTT COPPER CORPORATION R. J. Greenwald DEEPSEA VENTURES, INC. This paper is a summary of information provided to the U.S. Interagency Law of the Sea Task Force by the authors, who are advisors to the Task Force. The summary was provided, and is published herein, in order to furnish the political and administrative decision-maker with a factual background in deep ocean hard mineral prospecting and exploration activities and requirements. It is hoped that possession of these facts will facilitate the informed formulation of domestic and international policy in a way that best protects the interests of all nations wishing to promote and regulate the productive uses of the deep seabeds. The authors wish to express their gratitude for the contributions of the late Mr. C. E. Schatz of Kennecott Exploration, Inc., and Messrs. R. Kaufman and A. J. Rothstein of Deepsea Ventures, Inc. |