prove economically justifiable to produce manganese it can be recovered. The tailings, or waste material, could constitute a stockpile of higher grade manganese than any domestic deposit plus small amounts of other metals which could be extracted if metals prices reach a point which justifies recovery.

UNDERSEA MINING LAW

Little specific international law presently covers undersea mining. The subject is to be treated at the upcoming United Nations Law of the Sea Conference at Caracas, Venezuela, in June, 1974.

Present international law does permit exploration, experimental activities, and mining itself to be carried out. Nevertheless many uncertainties exist which would be clarified by a treaty or by legislation now in Congress.

Two bills (H.R. 12233 and S. 2878) designed to remove these uncertainties and to encourage U.S. industry to continue ocean mining research and development have been introduced in Congress.

Lengthy hearings were held on predecessor bills last year by the Senate Interior and Insular Affairs Subcommittee on Minerals, Materials and Fuels and the House Merchant Marine and Fisheries Oceanography Subcommittee.

Mr. DOWNING. Our last witness for today is Mr. Carl H. Savit, vice chairman of the National Ocean Industries Association.

Mr. Savit is also a senior vice president of Western Geophysical Co. of America, Houston, Tex. And Mr. Savit was also, at one time, in the Office of Science and Technology of the President, were you not?

Mr. SAVIT. Yes, sir, in 1970-71, I served for 14 months in the Office of Science and Technology, particularly in the science of the earth, sea, and air.

And in that period I was involved in preparing some comments regarding the original Law of the Sea position of the United States at the Geneva Conference.

Mr. DOWNING. It is a pleasure to have you with us.

You may proceed with your statement in any way you see fit, sir.

STATEMENT OF CARL H. SAVIT, VICE CHAIRMAN, NATIONAL OCEAN INDUSTRIES ASSOCIATION, AND SENIOR VICE PRESIDENT, WESTERN GEOPHYSICAL CO. OF AMERICA, HOUSTON, TEX.

Mr. SAVIT. Thank you, Mr. Chairman, and members of the committee.

I appear here today on behalf of the National Ocean Industries Association, which is the only national trade association organized to serve as the legislative and administrative spokesman at the Federal level for all facets of the Nation's offshore and ocean-oriented industries.

We appreciate this opportunity to present our views on H.R. 12233, the "Deep Seabed Hard Minerals Act."

The National Ocean Industries Association is an organization. of more than 220 member companies engaged in industrial activities over, on, in, under, and with the oceans. Our members are active in all significant types of commercial operations involving the

oceans.

To some degree, the interests of our members may differ or conflict in important aspects. We all, nevertheless, share the common desire to promote the best interests of the United States in the

maintenance of a healthy resource base to supply the day-to-day needs of our national economy.

In this vein, and from this viewpoint, the National Ocean Industries Association enthusiastically endorses the purpose and direction of H.R. 12233:

To promote the conservation and orderly development of hard mineral resources of the deep seabed, pending adoption of an international regime relating thereto.

We, nevertheless, desire respectfully to offer two caveats and to make certain recommendations to broaden the applicability and scope of this excellent measure.

A QUESTION OF JURISDICTION

First, as to the caveats. It would appear that H.R. 12233 is, at least in part, based on the implicit assumption that the resources of the "deep seabed," however defined, are res nullius; that is to say, those resources are now the property of nobody.

Thus, by principles of international law, they are subject to appropriation by the first claimant to exercise effective control.

We would note that at least two other interpretations of the status of the resources of the deep seabed have been enunciated.

The United States, at an international conference in Geneva in 1970, used language which suggested that those resources are common property, that is res communes, and, at least by implication, not appropriable by any person or state without the consent of the world community. This position does not appear to have much weight but may be asserted by some members of the world community.

The most widely acceptable theory as to the status of these resources may well turn out to be the position that the act of exploiting a particular seabed resource at any location automatically imparts to that location the status of "continental shelf."

That such a contention has some prima facie validity may be seen by examining the internationally accepted definition of "continental shelf" as stated in the 1958 Geneva Convention on the Continental Shelf and reaffirmed in section 3(c) of H.R. 12233 in which the bounds are given as:

outside the area of the territorial sea, to a depth of two hundred meters or, beyond that limit, to where the depth of the superjacent waters admits of the exploitation of the natural resources of the said areas: [Emphasis mine.]

If this view prevails, as I believe it will, the applicable determinations of the limits of national rights must be based on adjacency. In short, each and every resource on and under the seabed will ultimately be held to belong to the state having sovereignty over the nearest coastal point.

The boundaries between "continental shelf" areas belonging to the various nations will be the median lines.

At this point, I would note parenthetically that some of the leading proponents of an international regime for the deep seabed have privately expressed to me the opinion they do not believe that an international regime can, as a practical matter, be established.

Thus, they agree adjacency and the median line boundary will probably prevail by default.

Our first caveat, then, is thus that another nation may contend that any activity involving mineral recovery from the sea bottom at a point nearer to its territory than to that of any other nation falls within its exclusive jurisdiction. Seizure of the mining vessel and its personnel and equipment may well result. Other international sanctions may be invoked.

ADJUSTMENT FOR JURISDICTIONAL VIEWS

To cope with this class of contingency, we recommend one of two alternatives be followed.

A first alternative is to broaden the provisions of sections 13 and 14 of this bill to encompass seizures, fees, payments, and other losses resulting from the actions of any sovereign state other than the United States.

Our second alternative is to restrict the areas available for license to areas every point of which is nearer to a coastal point of United States-controlled territory than to a coastal point under the sovereignty of any other nation.

A variation of this second alternative might also authorize licensing for areas adjacent to coasts not under the control of any nation, the principal example of such lands being the Antarctic Continent.

Wholly outside the question of adverse or conflicting claims of sovereignty or jurisdiction, there is a powerful practical thrust to the assignment of rights on the basis of adjacency. In any massive operation at sea, costs escalate rapidly as the distance of the operation from its land base increases. Doubling the distance can easily quadruple the costs.

In any actual operation, there will be a compelling urgency to minimize the distance between an area of mining activity at sea and the logistic and personnel base from which such activity is supplied and to which it sends its ores or concentrates.

It would appear quite likely that any United States licensee under the proposed bill would choose to operate from a foreign base if the area under license were to be remote from United States territory.

The foreign state whose port is being used might very well wish to exercise some jurisdiction over the mining operation itself.

Any fees or costs associated with such foreign port jurisdiction should be excluded from coverage under sections 13 and 14 except insofar as such fees or costs apply to the actual mining operation itself.

INTERNATIONAL COMMERCE

As the foregoing discussion has implied, the United States does not operate in a vacuum. but its actions affect and are affected by interests and actions of other nations.

Our second caveat relates to the possibility, nay the virtual certainty, that licensing of deep sea mining by the United States will move other nations to institute similar or parallel programs of their own.

Such actions will, in short order, result in the licensing of all areas of apparently economically recoverable minerals.

At this point, we take note of section 4(a) which, as presently written, would have an unintended detrimental effect on an important area of United States international commerce.

The companies in the United States have been and are the purveyors of major portions of exploration and engineering services and technology to the world. They lead in underwater engineering and in many phases of mining and ore processing technologies.

Export of such services and associated products and machinery has been and is an important source of foreign exchange. By prohibiting indirect involvement in the development of hard mineral resources not licensed under the act, section 4(a) could prevent a large segment of United States industry from engaging in its normal. business of selling exploration, engineering, or construction services. Except for the prohibition of section 4(a), it would normally be expected that deep-ocean mining ventures sponsored or licensed by foreign nations would prove to be a lucrative market for the United States exploration, engineering, and construction firms.

The National Ocean Industries Association includes among its members many well-known and internationally respected organizations which normally act as contractors to furnish exploration, engineering, or construction services worldwide.

It would do a disservice to the United States and to these companies and their employees to close off to them an entire field of activity. Not only would such an exclusion have an adverse effect on this Nation's employment and balance of payments, but these American companies would be deprived of the broader experience and expansion of technological skills which they might obtain from a worldwide sphere of activity.

Our recommendation to cope with this second caveat is to amend section 4(a) by inserting at the end of that section, before the period, the phrase "nor to the rendering of contractual exploration, engineering, construction or other services, or the furnishing of machinery, products, supplies, or materials to any organization or person lawfully engaged in such development under the jurisdiction of any foreign state."

SCOPE OF THE ACT

While, at the present time, manganese nodules appear to be the only economically recoverable mineral resource of the deep seabed, some geologists and geophysicists now believe a vast store of other minerals is hidden beneath the sea.

Other experts predict critical shortages of many minerals within a very few years.

The coincidence of these two factors strongly indicates the scope of H.R. 12233 should not be restricted in its applicability to manganese nodules on or immediately beneath the sea bottom. Instead, we would recommend that the bill be made applicable to all hard minerals.

Specifically, we would suggest that section 3(d) be amended by deleting the last six words and that section 3(e) be amended to read:

"hard mineral' or 'hard mineral resources' refer to all naturally occurring inorganic mineral materials, but does not include petroleum, natural gas, and natural gas liquids."

Amendment of section 2 to conform to these changes may be advisable.

The primary advantage of broadening the scope of this bill to encompass other mineral resources is that companies and individuals will thereby be encouraged to seek other types of mineral deposits beneath the sea and to devise and develop the techniques for recovering them.

Even a few months of lead time in obtaining new sources to meet the growing mineral needs of the United States could avert future catastrophic consequences.

That concludes my prepared testimony, Mr. Chairman.

I deeply appreciate the opportunity to appear before this committee and to present our views.

Mr. DOWNING. Thank you, Mr. Savit.

You have made a very fine presentation. I found your two caveats most interesting.

Actually, the legislation does not say anything about who owns the seabed. We leave that to the wisdom of the Law of the Sea Conference.

Your suggestion that we should protect ourselves in the event somebody establishes this "adjacency" theory is a good one. Very interesting.

Counsel?

Mr. HEYWARD. I would like to go to the second point for the moment, if I may, Mr. Savit, which I think is a perfectly justified one in connection with activities of U.S. companies in their foreign operations.

I am certain that there is no intent to restrict normal services, engineering services, support services or otherwise, as far as the deep seabed is concerned.

In the definition of development, of course, we are talking about exploration and exploitation of the deep seabed for manganese nodules alone, which you pointed out. But a provision in the act which would recognize international consortia activity would solve your problem, or would you need a specific provision which would make it clear that we are not prohibiting any kind of service activities?

Could you answer that?

Mr. SAVIT. Yes, I believe that simply providing for consortia will not address the problem that we perceive.

The type of situation that might very well arise, and which has exploration and exploitation of the deep seabed for manganese arisen in the petroleum exploration industry, is one in which a foreign entity-for example, a national economy of a foreign state-will advertise for tenders to carry on specific construction for exploration services with regard to its own interests and activities, and no interest other than those of this particular foreign company would be involved as an operator or owner so that the only activity of the U.S. companies would be to serve as a contractor, an independent contractor, working for a fee under the direction of the foreign entity.