No. 552 October 13, 2005 Routing Don’t Resurrect the Law of the Sea Treaty by Doug Bandow Executive Summary For more than 20 years, the United States has the treaty governing seabed mining. The provi- refused to become a party to the Law of the Sea sions of Section XI may have the effect of forever Treaty. Advocates of the treaty, a comprehensive discouraging such operations, even where there measure governing navigational rights on the sea might be huge benefits. Regulations are to be and mineral rights on the seabed, claimed that U.S. administered through a complicated system of failure to join the convention would result in chaos committees and agencies within the International on the high seas. It has not. Very few Americans Seabed Authority, a creation of the United know anything about the treaty, and even advo- Nations that has ultimate jurisdiction over the cates are hard-pressed to explain how the United agreement. States would benefit from its adoption. Funding for the ISA, and for enforcement of A round of changes to the document won the the LOST, would flow disproportionately from support of the Clinton administration, which the United States. The ISA’s current budget is signed the treaty in 1994, but those changes modest, but the revised agreement changed none failed to attract sufficient support from the of the underlying institutional incentives that bias Senate. The LOST has languished unratified for virtually every international organization, most more than 10 years. obviously the UN itself, toward extravagance. The logjam appears to have broken, with Some supporters of the treaty insist that the prominent Republicans, and the president him- LOST is essential to establishing the rule of law self, signaling support for ratification. But the on the high seas and will, therefore, aid in the changes made to the LOST over the years have not fight against global terrorism. If the stakes are altered its fundamental principles, which are col- that high, it is crucial that the treaty be a good lectivist in nature and inimical to U.S. interests. one. America’s interests will be best served if the Most objectionable is Section XI, that portion of Senate rejects the LOST. _____________________________________________________________________________________________________ Doug Bandow is a senior fellow at the Cato Institute. He served as a special assistant to President Ronald Reagan and was a deputy U.S. representative to the Third UN Conference on the Law of the Sea. The LOST creates Introduction mittee approval of the treaty last year with a collectivist, the support of President Bush. At her confir- More than two decades of negotiation cul- mation hearing before Lugar’s committee, highly politicized minated in 1982 when the Third United soon-to-be secretary of state Condoleezza system to govern Nations Conference on the Law of the Sea Rice stated that the president “would certain- 2 much of the (UNCLOS) approved the Law of the Sea ly like to see it pass as soon as possible.” Treaty. The United States was not among the Yet, despite that impressive line-up, the unowned more than 100 countries that signed the treaty has yet to reach the Senate floor. Rather resources of treaty. U.S. opposition was not without effect, than acknowledge any flaws in the convention, however: the LOST, as the treaty is known, Benjamin and Daniel Friedman charged that mankind. failed to gain the 60 ratifications necessary to the LOST was blocked by “a few zealots” who make it take effect. Even the Soviet Union, were “cowing the White House and Senate.”3 which had proudly proclaimed its solidarity Tying up the treaty was a surprisingly impres- with the developing nations pushing the sive achievement for just “a few zealots.” treaty, did not formally bind itself. Nevertheless, a spokesman for Senator Lugar No one noticed the treaty’s failure to take called Secretary Rice’s comments “a break- effect. Much of what the LOST covered was through” and promised that the treaty would already customary international law. Navi- go to the floor “sooner rather than later.”4 gation proceeded without hindrance. The Even some critics of the treaty argue that most dramatic innovation, the seabed mining the specifics don’t matter—for example, if regime, proved unnecessary. Seabed mining there’s no seabed mining, the regulatory turned out to be a bust rather than the finan- regime is irrelevant, no matter how awful. So cial bonanza once predicted; land-based pro- why not ratify the convention? duction remained far more accessible and Because a bad agreement is a bad agree- affordable than ocean operations. The inter- ment. If seabed mining ever becomes eco- national redistributionist campaign known as nomical, it could be crippled by the LOST’s the New International Economic Order col- unnecessarily complicated rules. The prece- lapsed. It became evident that the sort of col- dent the treaty sets is even worse. The LOST lectivist economics that wouldn’t work creates a collectivist, highly politicized sys- domestically wouldn’t work internationally. tem to govern much of the unowned Enthusiasm for international agreements resources of mankind. The more than two remains strong in Washington, however, in decades since treaty negotiations began have spite of perceived Bush administration uni- demonstrated that markets are not only lateralism. The Clinton administration, more efficient but are more equitable than which renegotiated the treaty and pro- central control—particularly when the con- claimed that the problems cited by President trol is exercised by multilateral international Ronald Reagan had been fixed, signed the institutions. At a time when the spread of revised treaty in 1994, setting off a stampede free economic systems has proved to be a of foreign ratifications that brought the con- boon for the world’s poor, the LOST is a step vention into effect in November of that year. back into the collectivist past. But the Republican Senate refused to take up the LOST for ratification during Clinton’s tenure in the White House. That reluctance What Is the LOST? changed after George W. Bush became presi- dent. In November 2004, analysts Benjamin President Truman’s 1945 proclamation and Daniel Friedman wrote of the “stunning asserting U.S. jurisdiction over America’s con- array of interests” that had endorsed the tinental shelf, and similar extensions of LOST.1 Senate Foreign Relations Committee national control by other states, served as the chairman Richard Lugar (R-IN) won com- genesis for the LOST, because it prompted 2 renewed interest in property rights on the As originally written, the treaty was explicit- seabed. The desire to standardize those sorts ly intended to restrict mineral development. of international claims led to the first UN Among the treaty’s objectives were “rational Conference on the Law of the Sea (UNCLOS management,” “just and stable prices,” “orderly I), which gathered in 1958 to deal with and safe development,” and “the protection of resource jurisdiction and fishing. UNCLOS II developing countries from the adverse effects” convened in 1960 to take up unresolved fish- of mineral production. The LOST explicitly ing and navigation issues. Soon thereafter the limited mineral production and authorized possibility of seabed mining led the United commodity cartels (rather like OPEC). Further, Nations to declare the seabed to be the “com- the treaty placed a moratorium on the mining mon heritage of mankind.” A Seabed Com- of some resources, such as sulfides, until the mittee was established, eventually leading to Authority adopted rules and regulations— UNCLOS III, which first met in 1973. Nine which might never have happened. years and 11 sessions later, a treaty was born. The procedures governing mining reflect- The LOST, which runs 175 pages and con- ed that anti-production bias. A firm would tains 439 articles, covers seabed mining, nav- have been required to survey two sites and igation, fishing, ocean pollution, and marine turn one of them over gratis to the Enterprise research, as well as the creation of economic before even applying for a permit. The The LOST’s zones (subject to national regulation). Much Authority had the power to deny an applica- fundamental of the treaty is unobjectionable, or at least tion if the operation would violate the treaty’s premise is that unimportant when in error. The navigation anti-density and anti-monopoly provisions, sections codify current transit freedoms and aimed at U.S. operators. And the ISA’s deci- all unowned are thus a modest plus. sions in this area were to be set by a subsidiary resources on the Very different is Part XI, as the provisions body, the Legal and Technical Commission. ocean’s floor governing seabed mining beyond national Developing countries would dominate the 36- jurisdiction are called. So flawed is this sec- member council, as they did the Assembly, belong to the tion that it can be truly “fixed” only by tear- leaving access of American firms to the deep “people of ing it up. seabed (that beyond national jurisdiction) The LOST’s fundamental premise is that dependent on the whims of countries that the world”— all unowned resources on the ocean’s floor might oppose seabed mining for economic or effectively belong to the “people of the world”—effec- political reasons. the UN. tively the UN. But an international regulato- ry system would likely inhibit development, depress productivity, increase costs, and dis- Who Would Want to Bid? courage innovation, thereby wasting much of the benefit to be gained from mining the Under the original LOST, it is not clear oceans. The Byzantine regime created by the why a firm would have wanted to bid, even if LOST was, and remains, almost unique in its it thought it could win approval.