DEEP SEABED HARD MINERALS

WEDNESDAY, MARCH 28, 1973

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON OCEANOGRAPHY OF THE

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C. The subcommittee met a 10:00 a.m., in room 1334, Longworth House Office Building, Hon. Thomas N. Downing, chairman, presiding.

Mr. DOWNING. The committee will come to order.

I regret our Republican colleagues have a meeting this morning, but they will be coming in as soon as that meeting is over.

The subcommittee will continue its hearings on H. R. 9, the Deep Seabed Hard Mineral Resources Act. As members will recall, this is a continuation of hearings which began on March 1, 1973, when the subcommittee heard testimony from representatives of the executive departments, presenting the administration views on the bill. Subsequent to that hearing, the latest session of the United Nations Seabed Committee began in New York on March 5, 1973, and will continue through the end of next week. During the course of that session, there has been one development which I consider worthy of comment here, since it relates directly to the bill before us. On March 19, 1973, Mr. John Norton Moore, the head of the U.S. Delegation to the Seabed Committee made a statement in Subcommittee No. I, wherein he tabled a new suggestion on the part of the United States concerning the scheme whereby an agreed international regime on the exploitation of seabed resources could provisionally enter into force prior to the effective date of the treaty itself. This apparently is the administration attempt to implement the concept of an "interim policy," which was contained in the President's ocean policy statement of May 23, 1970. While this may not be the complete answer, I applaud the attempt to resolve this critical issue, and I ask unanimous consent that Mr. Moore's statement of March 19, 1973, be entered into the record at this point.

And, without objection, it will be so entered. [The statement follows:]

STATEMENT BY MR. JOHN NORTON MOORE, U.S. REPRESENTATIVE TO THE COMMITTEE ON THE PEACEFUL USES OF THE SEABED AND THE OCEAN FLOOR BEYOND THE LIMITS OF NATIONAL JURISDICTION

Mr. Chairman, many of the members of the Seabed Committee have increasingly expressed their concern that progress in the law of the sea negotiations has not been adequate to keep abreast of the rapid advances in technology for ocean space. Indeed, my delegation has repeatedly encouraged the Committee to hasten its progress lest while we debate, events preempt our ability

to negotiate a treaty on the law of the sea. We believe there is now a renewed sense of dedication in the Committee to produce a treaty on the law of the sea on the time schedule fixed by the 27th General Assembly. We are encouraged by this sense of purpose.

All delegations are no doubt aware that seabed mining technology has now advanced to a stage where commercial exploitation of manganese nodules can, and no doubt will, occur within the next three to five years. In anticipation of commercial production, United States companies and presumably the companies of other countries will shortly invest large sums of money in order to continue their developmental work and to begin constructing production facilities. We, in this Committee still have the opportunity to assure that the new law of the sea and any international institutions established for deep seabed resource management are operational when such exploitation occurs.

On July 20, 1972 in Subcommittee I, other nations enquired as to the position of the United States on draft legislation, called S. 2801, now designated H.R. 9 or S. 1134, which has been pending in our Congress for some timedraft legislation which has been designated to provide to interested members of our industrial community a variety of assurances that these negotiations would not ultimately cause them to lose the large investments which they will shortly be making and the large research and development expenditures which they have already incurred. On May 19, 1972, we advised interested members of our Congress that we were not prepared at that time to state a position on S. 2801. We furnished copies of our report to Congress to this Committee last July. On March 1, 1973, we did make our position known to Congress. In response to this Committee's continuing request to be kept informed of the status of our position, we have attached to this statement a copy of the views of the Executive Branch of our Government on this "interim legislation." I would like, however, Mr. Chairman, to briefly summarize what we told our Congress.

First, we pointed out that the General Assembly had established a firm schedule for the Law of the Sea Conference and that we anticipated that the schedule would be met.

Second, we stressed the fact that President Nixon's oceans policy statement of 1970 indicated that it was neither necessary nor desirable to try to halt exploration and exploitation of the seabeds beyond the depth of 200 meters during the negotiation process, provided that such activities are subject to the international regime to be agreed upon and that the international regime include due protection of the integrity of investments made in the interim period.

Third, we stated that we wish to avoid taking any action which might be construed by others as the kind of unilateral action of which the United States has been critical and which does not enhance the prospects for international agreement.

Fourth, we indicated that it is our policy that we wish to ensure that technology to mine the seabeds will continue to develop and that seabed mineral resources will be available to the United States and other countries as a new source of metals.

Fifth, we said that under any new legal regime a secure and stable investment climate is essential.

Sixth, we stated that seabed mineral resource development must be compatible with sound environmental practices.

Mr. Chairman, my government is attempting in every possible way to assure that the seabed mining, when it occurs, will occur under fully agreed international rules and regulations and will be administered by international machinery. For that reason, we advised our Congress that we are opposed at this time to the passage of legislation such as H.R. 9. In doing so, however, we were keenly aware of the lack of confidence which many people have in the timely and satisfactory progress of our work in the UN Seabed Committee. To the extent that H.R. 9 was devised to provide private companies with a more secure basis for investment decisions, we could not rule out the alternative of interim legislation if a Law of the Sea Conference is not concluded as scheduled and does not produce a treaty that asures an accommodation of the basic objectives which all nations have in these negotiations. We stated our basic objectives on August 10, 1972 in the Main Committee,

We believe, Mr. Chairman, that both a timely and successful Law of the Sea Conference is possible. But even a treaty which is open for signature in 1974 or 1975 will not be timely if several years elapse while the treaty secures

the necessary number of ratifications so as to come into force. Indeed, even if only one or two years elapsed after signature, seabed exploitation would in all probability occur-and would not be subject to the international regime and machinery.

Hence, Mr. Chairman, in order to meet what I believe are the objectives of all nations in this Conference-a successful treaty which, with respect to deep seabed resource development, will come into force in advance of actual commercial exploitation-my government is of the view that we must begin at once to prepare for the provisional entry into force of those portions of the permanent regime and machinery which would be applicable to deep seabed development. We contemplate that such an approach would only apply to the period after the law of the sea treaty is opened for signature and until the permanent regime and machinery enter into force. Alternatively, it might also be possible to limit the provisional period to a stated number of years. This approach, Mr. Chairman, would make it certain that from the very beginning seabed exploitation would occur under an internationally agreed regime and its benefits would accrue to the international community.

There are a number of instances in the history of international negotiations in which analogous steps have been taken for similar reasons. To name only a few, the Convention on International Civil Aviation (The Chicago Convention)-one of the world's most widely ratified conventions-entered into force on a provisional basis shortly after it was opened for signature. The machinery which the Chicago Convention established, the International Civil Aviation Organization, came into being on a provisional basis at the same time. Other examples of provisional arrangements can be seen in the World Health Organization, the Preparatory Commission for the International Refugee Organization, the International Atomic Energy Agency, and Intelsat as well as a variety of others.

We are aware that a proposal such as the one we are putting forward today has many ramifications and may have inherent in it a variety of complex considerations which require careful study. Later in my statement, I will refer to some of these considerations and attempt to elaborate on them. What is important, Mr. Chairman, is that delegations give careful consideration to the concept of provisional entry into force of the international regime and machinery. It should be made clear that this concept involves bringing into force at the time the final law of the sea treaty is opened for signature, on a provisional basis, the permanent regime and machinery for the deep seabeds. This is not a proposal for an interim regime, Mr. Chairman, it is a means of assuring that the permanent regime and machinery which will have already been agreed to at the Conference take effect promptly on a provisional basis so as to ensure that all seabed exploitation is covered from the beginning by the treaty which we are here to negotiate, and so that states will not have to consider other alternatives to resolve the problem.

We do not ask the Committee to pre-judge in any way the content of the permanent regime and machinery. This is what we are all here to negotiate. At this time, we ask instead the support of delegations only for the concept of the provisional entry into force of that regime and machinery.

For our part, we would hope to have at least the tentative views of delegations during the March meeting on this proposal in order to be more fully responsive to our own Congress before the Committee's next meeting this summer in Geneva. In the meantime, Mr. Chairman, we believe the Secretary General should prepare for our use in July a study of the potential applicability to our present work of the various ways in which this type of problem has been dealt with in the past. We propose that this study be completed before the July-August meeting and that it be referred to Subcommittee I and possibly to the working group for discussion after completion of its work in the middle of August on te international regime and machinery. If the members of the Committee view this proposal for provisional entry into force of the international regime and machinery sympathetically, and if the Secretary General's study is prepared in time for debate in Subcommittee I this summer, we feel certain, Mr. Chairman, that the Committee will be well on its way to solving some of the difficult problems which have been caused by this protracted negotiation.

The objectives of a provisional regime and machinery should be to assure that when deep ocean mining occurs, it occurs under the internationally agreed system and under the international rules which would be agreed to as a part of the permanent regime. This would assure that seabed mining activities would

be conducted under the international regime that the Conference has agreed upon to provide for the sound, orderly and economically efficient development of seabed mineral resources for the benefit of mankind, and to assure safe and environmentally sound operating practices. Like the permanent, the provisional machinery should administer seabed resource activities and assure compliance with the provisions of the regime. Most importantly, the provisional machinery would acquire substantial experience with respect to the geology, technology and economics of this new undertaking so as better to enable the permanent machinery to commence its work.

This provisional regime and machinery could also assure that revenues from seabed mining were collected and held in reserve by the provisional machinery for the revenue distribution system to be used by the permanent regime and machinery. It would also need to establish some provisional dispute settlement machinery of a simple character. The provisional machinery should also prepare preliminary drafts of annexes to the final treaty which can then be promulgated by the permanent machinery in accordance with its powers as soon as it comes into being. Finally, the provisional regime and machinery should in every respect be established in such a way as to encourage prompt ratification and entry into force of the permanent treaty.

In short, Mr. Chairman, we see as the fundamental objective of a provisional regime and machinery the protection of the integrity of the permanent regime and machinery while at the same time providing a sound legal basis for investment decisions after the treaty is opened for signature and before it comes into force. Investments made under such a provisional arrangement would be given the same protection as if they had been made pursuant to the permanent regime.

It may be argued by some delegations, Mr. Chairman, that provisional entry into force of the regime and machinery would permit those nations which are now developing the technology to mine the seabeds to quickly acquire exclusive rights to all of the mineral deposits of the deep seabed which are of any potential value. For a variety of reasons, this could not be the case nor would we want it to be. First, the permanent regime will presumably be designed to prevent this from happening. The same provisions could be applicable during the provisional period.

Second, the market opportunities for the metals contained in manganese nodules are limited. The projected growth of world demand for the principal metals contained in manganese nodules, particularly nickel, is such that the rate of growth of productive capacity will necessarily be relatively small. I believe both of the economic implication studies prepared by the Secretary General, with which, as you know, we have some differences of opinion, would support the conclusion that the markets are so limited in relation to the availability of the resource that it would be a very long time indeed before any but a tiny fraction of these ocean resources could be exploited economically. Our own estimates indicate that there are more than 4 million square kilometers of highly attractive manganese nodule deposits potentially exploitable even for first generation mining equipment, not to speak of the number of deposits which would become attractive as world technology improves. It is thus apparent that, in the period to which the provisional regime would apply, only a handful of operations would occur.

Mr. Chairman, my delegation has given some preliminary thought to the nature of the provisional regime and machinery and I would, at this point, ask the Committee's indulgence while I share some of our tentative views with the members of the Subcommittee.

Since we have always divided our work in this Committee into the question of the regime and the question of machinery, I will address the remainder of my comments to each of those subjects separately.

Our tentative view on the provisional regime, Mr. Chairman, is that it should include all of the general provisions of the law of the sea treaty which would have applicability to the international seabed area. In addition to the general principles, the United States believes that the regime should provide for the granting of rights under general rules and conditions drawn from those which would appear in the permanent regime and machinery. In general, these would relate to the duration of the rights granted, the nature of the mineral deposit which could be exploited, the boundaries of the area which would be the subject of rights, the economic burdens which would be placed on the mining activity and the standards necessary to ensure safety and environ