DEEP SEABED HARD MINERALS THURSDAY, MARCH 1, 1973 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OCEANOGRAPHY OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, Washington, D.C. The Subcommittee on Oceanography met in room 1334, Longworth House Office Building, at 10:12 a.m., Hon. Thomas N. Downing presiding. Mr. DOWNING. The subcommittee will come to order. My introductory statement is a little long, but I think it is rather important. This morning, the Subcommittee on Oceanography will begin consideration of H.R. 9, the Deep Seabed Hard Mineral Resources Act, a bill to provide the Secretary of the Interior with the authority to promote the conservation and orderly development of the hard mineral resources of the deep seabed, pending adoption of an international regime therefor. H.R. 9 was introduced by me on January 3, 1973, for myself and seven cosponsors from this committee. The bill is identical with earlier bills introduced in the 2d session, 92d Congress, H.R. 13076, H.R. 13904, and H.R. 14918. [The bills and departmental reports follow:] [H.R. 9, H.R. 7732, 93d Cong., 1st Sess.] BILLS To provide the Secretary of the Interior with authority to promote the conservation and orderly development of the hard mineral resources of the deep seabed, pending adoption of an international regime therefor. Be is enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Deep Seabed Hard Mineral Resources Act". SEC. 2. When used in this Act DEFINITIONS (a) "Secretary" means the Secretary of the Interior; (b) "deep seabed" means the seabed and subsoil vertically below lying seaward and outside the Continental Shelf of the United States and the Continental Shelves of foreign states, as defined in the 1958 Convention on the Continental Shelf; (c) "block" means an area of the deep seabed having four boundary lines which are lines of longtitude and latitude, the width of which may not be less than one-sixth the length and shall include either of two types of blocks: (i) "surface blocks" comprising not more than forty thousand square kilometers and extending downward from the seabed surface to a depth of ten meters; (ii) "subsurface blocks" comprising not more than five hundred square kilometers and extending from ten meters below the seabed surface downward with limitation; (d) "hard mineral" means any mineral, metalliferous mud, or other nonliving substance other than oil, gas, hydrocarbons, and any other sub stance which both naturally occurs and is normally recovered in liquid or gaseous form; (e) "development" means any operation of exploration and exploitation, other than prospecting, having the purpose of discovery, recovery, or delivery of hard minerals from the deep seabed; (f) "prospecting" means any operation conducted for the purpose of making geophysical or geochemical measurements, bottom sampling, or comparable activities so long as such operation is carried on in a manner that does not significantly alter the surface or subsurface of the deep seabed; (g) "commercial recovery" means recovery of hard minerals at a substantial rate of production (without regard to profit or loss) for the primary purpose of marketing or commercial use and does not include recovery for any other purpose such as sampling, experimenting in recovery methods, or testing equipment or plant for recovery or treatment of hard minerals; (h) "person" means any government or unit thereof and any jurisdical or natural person; (i) "reciprocating state" means any foreign state designated by the President as a state having legislation or state practice or agreements with the United States which establish an interim policy and practice comparable to that of the United States under this Act; (j) "international registry clearinghouse" shall mean a recording agency or organization designated by the President in cooperation with reciprocating states. SECRETARY'S POWERS; REQUIREMENT OF LICENSE SEC.. 3. The Secretary shall administer the provisions of this Act and may prescribe such regulations as are necessary to its execution. No person subject to the jurisdiction of the United States shall directly or indirectly develop any portion of the deep seabed except as authorized by license issued pursuant to this Act or by a reciprocating state. Nothing in this Act or any regulation prescribed thereunder shall preclude, or impose any restriction upon, scientific research or prospecting by any person or any portion of the deep seabed not subject to an outstanding license issued under this Act or by any reciprocating state, or shall require any applicant for a license or any licensee to divulge any information which could prejudice its commercial position. EXCLUSIVE LICENSES; LIMITATIONS AND CONDITIONS SEC. 4. (a) The Secretary shall issue licenses pursuant to section 5, recognizing rights, which shall be exclusive as against all persons subject to the jurisdiction of the United States or of any reciprocating state, to develop the block designated in such license, as follows: (i) as to each surface block, the rights shall extend to manganese-oxide nodules and all other hard minerals at the surface of the deep seabed or located vertically below to a depth not exceeding ten meters; (ii) as to each subsurface block, the rights shall extend to all hard minerals located more than ten meters beneath the surface of the deep seabed. (b) Where a subsurface block leased to one person is subjacent to a surface block leased to a different person, the licensee of the subsurface block shall have the right to penetrate the surface block and the Secretary shall prescribe regulations to prevent undue interference by one with the other, giving reasonable priority to the first licensee. No license shall preclude scientific research by any person in licensed areas where such activities do not interfere with development by the licensees. (c) Every license issued under this Act shall remain in force for fifteen years and, where commercial recovery of hard minerals has been achieved from a licensed block within fifteen years, such license shall remain in force so long as commercial recovery from the block continues. The Secretary shall prescribe, as conditions for every license issued pursuant to this Act, minimum annual expenditures as specified in section 7, and requirements to protect the environment, prevent unreasonable interference with other ocean uses, and promote arbitral settlement of disputes. Where circumstances beyond the control of a licensee impair its ability to develop any portion of the deep seabed held under such license, the term of the license and the dates for complying with any other license condition shall be extended for an equal length of time. LICENSING PROCEDURES; CLEARINGHOUSE SEC. 5. (a) A license as specified in section 4 shall be issued by the Secretary to the first qualified person who makes written application and tenders a fee of $5,000 for the block specified in the application, except for portions of the deep seabed excluded from licensing pursuant to section 6. A person shall be deemed qualified for a license under this Act if and only if that person is a citizen of the United States, or a corporation or other jurisdical entity organized under the laws of the United States, its States, territories, or possessions, and meets such technical and financial requirements as the Secretary may prescribe in order to assure effective and orderly development of the licensed portion. (b) The Secretary shall act upon each license application within sixty days of its filing, and if the license is not issued or is issued for less than the entire portion of the deep seabed sought in the application, the Secretary shall in announcing his action to the applicant state reasons in writing for declining to issue the license for the entire portion sought. The Secretary shall, and the applicant or licensee may, notify within fourteen days the internatonal registry clearinghouse of the filing or withdrawal of an application for a license under this Act, the issuance, denial, expiration, surrender, transfer, or revocation of such license, or the relinquishment of any licensed portion of the deep seabed. (c) The function of the international registry clearinghouse shall consist solely of keeping records of notices of applications for licenses, the issuance, denial, transfer, or termination of licenses, and the relinquishment of licensed portions of the deep seabed. Its records shall be available for public inspection during the business hours of every working day. Pending designation of such clearinghouse, notice to the Secretary shall constitute notice to the international registry clearinghouse within the meaning of this Act. AREAS WITHDRAWN FROM LICENSING; DENSITY LIMITATIONS SEC. 6. (a) No license shall be issued under this Act for any portion of the deep seabed (1) which has been relinquished by the applicant under license issued by any State within the prior three years; (ii) which is subject either to a prior application for a license or an outstanding license under this Act or from a reciprocating State; Provided, That notice thereof has been received by the international registry clearinghouse within fourteen days of such application or license; (iii) which if licensed would result in the applicant holding under licenses issued by any State or States more than 30 per centum of that area of the deep seabed which is within any circle with a diameter of one thousand two hundred and fifty kilometers where the licensed area consists of surface blocks and one hundred twenty-five kilometers where the licensed area consists of subsurface blocks; or (iv) which if licensed would result in the United States licensing more than 30 per centum of such area. (b) No license shall be issued or transferred under this Act, and no person subject to the jurisdiction of the United States shall have any substantial interest in any license issued by any State, which would result in any person directly or indirectly holding, controlling, or having any substantial interest in licenses for any portion of the deep seabed licensed by any State which that person could not hold directly under this Act because of the limitations of items (i) and (iii). MINIMUM ANNUAL EXPENDITURES SEC. 7. It shall be a condition of each license issued under this Act that the licensee make or cause to be made minimum expenditures for development of each licensed block in the following amounts per block until commercial recovery from such block is first achieved: Year: 1 2 to 5--6 to 10. 11 to 15. Amount per year $100, 000 200,000 350,000 700, 000 Expenditures for offsite operations, facilities, or equipment shall be included in computing required minimum expenditures where such offsite expenditures are directly related to development of the licensed block or blocks. Expenditures in any year in excess of the required minimum may be credited to later years by the licensee. RELINQUISHMENT; TRANSFER OR LOSS OF LICENSE SEC. 8. (a) Within ten years of the date any block is licensed under this Act and not later than the start of commercial recovery from such block, the licensee shall by written notice to the Secretary relinquish 75 per centum of such block measured laterally. The relinquishment shall be such that the unrelinquished area conforms to the shape of a block as defined under section 2 (c). The licensee shall select the area of the block to be relinquished and as many as four contiguous blocks of the same type held by the licensee may be treated as a single unit for purposes of selecting the 75 per centum to be relinquished. (b) Any license issued under this Act may be surrendered at will and, on written consent of the Secretary, transferred to any person who qualifies under section 5(a) and is not precluded from holding such license by section 6(b). Such license may be revoked or willful, substantial failure to comply with this Act, any regulation prescribed thereunder, or any license condition, in a proceeding in an appropriate United States district court: Provided, That the Secretary has first given the licensee written notice of such violation and the licensee has failed to remedy the violation within a reasonable period of time. ESCROW FUND SEC. 9. A fund shall be established for assistance, as Congress may hereafter direct, to developing reciprocating States. The United States shall deposit in this fund each year an amount equivalent to * per centum of all license fees collected during that year by the United States pursuant to section 5(a) and an amount equivalent to per centum of all income tax revenues derived by the United States which are directly attributable to recovery of hard minerals from the deep seabed pursuant to licenses issued under this Act: Provided, That the amount deposited by the United States per license issued and per unrelinquished square kilometer under license shall not exceed the amount contributed for assistance to developing reciprocating States by other licensing reciprocating States (except developing States) per license issued by them and per unrelinquished square kilometer licensed by them. For the purposes of this section, "developing reciprocating State" means a reciprocating State designated by the President, taking into consideration per capita gross national product and other appropriate criteria. INVESTMENT PROTECTION SEC. 10. (a) Licenses issued under this Act may be made subject to any international regime for development of the deep seabed hereafter agreed to by the United States: Provided, That such regime fully recognizes and protects the exclusive rights of each licensee to develop the licensed block for the term of the license: And provided further, That the United States fully reimburses the licensee for any loss of investment or increased costs of the licensee incurred within forty years after issuance of the license due to requirements or limitations imposed by the regime more burdensome than those of this Act. The United States shall bear any payment of whatever kind required of the licensee under the international regime. The Secretary shall determine in the first instance the amount owing on all claims for reimbursement under this subsection. * (b) On annual payment by any licensee of a premium of $per $1,000 of insured risk of loss, the United States shall guarantee to reimburse the licensee for any loss caused through any interference by any other person (whether or not violative of international law) with development by the licensee pursuant to the license and from any loss caused by recovery by any person not authorized by the licensee of hard minerals from any block subject to such a license. The Secretary shall determine in the first instance the amount owing on all claims for reimbursement under this subsection. NONDISCRIMINATORY TREATMENT SEC. 11. All hard minerals recovered from the deep seabed under a license issued pursuant to this Act shall be deemed to have been recovered within the *An appropriate amount to be determined by the Congress. *A suitable premium to be determined by the Congress. |