We believe that this German operation is going rather deliberately. It is about 95 percent financed by their government, and that has been one of their problems they have had starting and stopping problems.

The Ministry of International Trade and Industry, MITI, of the Japanese Government, the organization responsible for the development of the mineral resources in Japan, has recently permitted a group of Japanese companies, supported by some American and European companies, to operate a test mining operation in the Pacific. This was done last summer. We have not received a full technical report. We do know they have had some troubles and this test is actually meant to produce enough material for them to conduct a pilot plant operation in metallurgical work. These are the two foreign operations that really have gone the farthest.

Mr. STUDDS. What would happen if H.R. 9 were to become law and the operations of two countries would be eyeing the same part of the seabed?

Mr. FLIPSE. Fortunately, nature was generous, and if it is the Japanese, we feel sure that they will concentrate on the Northwest Pacific and not the Northeast Pacific just because it is not necessary to move the ore so far.

As far as the Germans are concerned, the Atlantic is not suitable because of the low grade of material, so they are more likely to be in the same portion of the Pacific. We are convinced that there will not be any foolish attempt to settle on one spot, but rather, there is a selection of minesites with a selection of assays, and they will pick an area that will not be in contention. Because of the size of the investment we feel that responsible industry, with the cognizance, support and control of their governments, will not get involved in hundreds of millions of dollars claim jumping activities. It is not economical.

Mr. STUDDS. Section 10(a) and 10(b), as the investment section, strikes me as extraordinarily generous, and you yourself expressed that possibility with regard to the 40-year provision.

Licenses issued under this act may be made subject to any international regime, and you get into the U.S. Government reimbursing you for any loss of this investment, and 10(b) says "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 licensee pursuant to the license."

Now, is that not awfully broad language?

Mr. FLIPSE. It is perhaps idealistic, and hence negotiable. I feel it represented an appraisal by the American Mining Congress ad hoc group, of which I am a member, in drafting this legislation, that this was the ideal or the preferred extent of coverage.

I think this coverage indubitably would be defined in more detail by the interested departments of the Government

Mr. STUDDS. That is just absolutely openended, whether it is a question of legality or not. You could blow up your own operation and still be covered under that?

Mr. FLIPSE. If that is indeed the case, I certainly do not approve― Mr. STUDDS. That was the question.

Any other person.

No, some other person would have to blow you up.

Mr. FLIPSE. I think the intent was to use very broad definition of the risk and expect it to be negotiated to the less risk estimate.

Mr. STUDDS. My general hesitancy, as you heard expressed with the previous witness, those of us who do not often find ourselves in agreement with this administration are well advised when they seem to be making sense, to take careful note of what they are saying and i seemed to me in this case the testimony of the witnesses on behalf of the administration made considerable sense.

Now. I am as impatient as anybody else with the Department of State in general and with the Law of the Sea Conference, in particular.

If I ever hear the adverb "hopefully" in response to a question of when is something going to happen-maybe by the end of this or that! My particular concern, as I am sure you know, in a parochial sense, is fishing, and it seems to me that the administration's logic in opposing H.R. 9 at the moment is roughly this: We have a delegation negotiating and we hope they will proceed by late 1974 or 1975, and will you all hold off and not do anything to jeopardize these negotiations while they are in process. And I asked the administration why that logic did not apply infinitely more to fishing, which is also a subject of those negotiations, and one of the things that always puzzles me is the amount of concern that was mustered by your corporation, as well as Hughes Tool, etc., and can not be evidenced at all on behalf of the American fishermen.

Now, we are told by the administration that they will prepare interim legislation because the Conference may not work, and we are given statements this morning made in the Seabed Committee that looks toward ultimate resolution. No such regard is given to the American fishing industry. No one is rushing around, saying that if the Conference fails we have to have interim legislation for the fishing industry.

Now, it may be the absence of political power and muscle, but I cannot get myself excited about further lessening the risk to the Hughes Tool Co., very frankly, but I am concerned about the lives of a few hundred fishermen who are much more entrepreneurs in the capitalistic sense, who are taking large risks daily with little protection or concern on the part of their Government.

If we have to wait for 2 or 3 more years for this Conference to proceed, those minerals are not going to go anywhere. They can be mined when we get international agreement.

The same cannot be said for the fish that are concerned. Those fish will not be there if we are not able to reach an international agreement for reaching some method for resolution.

I apologize for making a speech at you, but those are the kind of thoughts that lie behind my thinking when I see the concern for these interests and then lack of concern concerning other people.

Mr. FLIPSE. May I respond?

Mr. STUDDS. Please.

Mr. FLIPSE. We used the other side of the coin with an interagency government task group. It was a privileged meeting, so I cannot quote, but it is evident that Ambassador McKernan had been to Russia to negotiate an interim fishing treaty. We asked him why can he not now negotiate ocean mining bilateral agreements, and why does not the negotiation of interim fishing treaties emasculate the Law of the Sea Conference, when, according to the State Department, the threat of multilateral negotiations on the subject of ocean mining does.

We would ask for the same courtesies that are being extended to the fishing industries

Mr. STUDDS. Well, the administration is also opposed to any unilateral attempt to extend fisheries on the part of the Commission.

Mr. FLIPSE. Can I suggest that the response was very disheartening. The response was that ours is an industry aborning, and the fisheries are in their death throes, and we always help the dying.

Mr. STUDDS. That may be our tradition, but not in this case.

Mr. FLIPSE. Well, this certainly is, in our opinion, not a just practice at all. We are very closely coupled with the fishing people. We are very much in sympathy with them in their U.N. policy.

Our support there has been very real with them. However, neither of us has accomplished what we wish, and we feel that H.R. 9 is essential to us.

Mr. STUDDS. Well, if you had to wait for 2 or 3 years, you could still proceed with the technology that you have, could you not? Mr. FLIPSE. Except for the severe economic loss, yes, sir. Mr. STUDDS. Thank you.

Mr. DOWNING. Mr. Studds, I think you have brought up a very valuable point, and perhaps we can get together and introduce legislation which would be helfpul to the fishery resources.

Mr. STUDDS. I would be delighted to, Mr. Chairman.

Mr. DOWNING. Does counsel have questions?

Mr. HEYWARD. I have one question.

Mr. Flipse, with regard to the coverage of the ocean bottom, I think you used the term 20 to 30 percent had viable

Mr. FLIPSE. Economic deposits.

Mr. HEYWARD. If this bill were passed and went into effect, let us say, next month, how soon would you be able to your own company start operations for processing these minerals?

Mr. FLIPSE. We would immediately proceed to take our ship to the site

Mr. HEYWARD. I mean on the time for processing. When would you begin actually getting minerals on the market?

Mr. FLIPSE. On the market, approximately 5 years from the day the bill is passed.

Mr. HEYWARD. So you are talking in terms of getting going, not in terms of actually producing processed minerals right now?

Mr. FLIPSE. Yes. The present problems are spelled out in preparing the plant, preparing the mining machinery, and detailing the deposit, and so forth. There is about 5 years of capital investment prior to hitting the market with the metals.

Mr. HEYWARD. Now, considering the international regime went into effect approximately 5 years from now, how much of the nodule resources would your company be taking at that point?

Mr. FLIPSE. A fraction of a thousandth of a percent.

Mr. HEYWARD. Thank you.

Mr. DOWNING. Minority counsel?

Mr. SHAROOD. Mr. Flipse, do you concur in Mr. Dubs' response to my question earlier regarding the reciprocal licensing provisions of the bill?

Mr. FLIPSE. We have felt-and this came up in our last hearing, too... the reciprocal licensing activity was essentially to get as many developing countries, as well as developed countries, interested in becoming participating nations in this hard mineral development business. We sincerely feel that this would be an incentive for some of the LDC's, to recognize that they can become part of this business by recognizing the claims of the nations that are going ahead. We believe the economic incentives will encourage this to happen.

Now, beyond this particular concept, we would expect the developed nations who are making these major investments to reciprocate by recognizing claims. As I suggested in my answer to Mr. Breaux, there certainly would be no $200 million claim jumping adventures. Because of this we felt it would be an incentive to get support from other foreign nations to recognize the logic of this bill, and diminish any negative effects that could occur in negotiations. This is not a closed club. It was meant to be an open club. This idea has a philosophical background. I do not think that this answers your question, but I do not think there is any incentive for our company to take it foreign if we can possibly do it in the United States.

Mr. SHAROOD. Without any reciprocal licensing provisions, but with realistic guarantees it would still meet your needs?

Mr. FLIPSE. It is my appraisal of my chairman's point of view that it would. There can be some modification and still meet our corporate needs.

Mr. SHAROOD. Thank you.

Mr. DOWNING. Mr. Flipse, the committee wants to thank you for your testimony. You have made an excellent witness, and if time is available we would like to see that film, but we will make the judgment at that time.

Thank you.

Mr. FLIPSE. Thank you, Mr. Chairman.

Mr. DOWNING. For our next witness, we are very pleased to have the distinguished professor of law and a director of International legal studies program at Syracuse University College of Law, Professor L. F. E. Goldie.

Professor Goldie.

Mr. GOLDIE. Thank you very much, Mr. Chairman.

Mr. DOWNING. I will remind the witness of the 20-minute deadline, and also of the fact that the House will convene in 5 minutes.

STATEMENT OF L. F. E. GOLDIE, PROFESSOR OF LAW, DIRECTOR, INTERNATIONAL LEGAL STUDIES PROGRAM, SYRACUSE UNI

VERSITY

Mr. GOLDIE. It is a great honor to be invited to speak before your committee, for which I thank you, Mr. Chairman.

I confess I have placed two lengthy memorandums in the record. These permit me to be brief in my oral presentation. I just want to strike some salient points.

Mr. DOWNING. Without objection, your statement will appear at this point in the record.

[Statement follows:]

STATEMENT OF L. F. E. GOLDIE, PROFESSOR OF LAW, DIRECTOR, INTERNATIONAL LEGAL STUDIES PROGRAM, SYRACUSE UNIVERSITY COLLEGE OF LAW

THE GENERAL INTERNATIONAL LAW OF SEABED REGIMES

by L. F. E. Goldie

I: INTRODUCTION

One of the major weaknesses of the United States Draft for a United Nations Convention for a Seabed Regime,' results from its draftsmen's assumption that it would be universal and would exclude the possibility of alternative regimes co-existing with it. While its silence on the status and rights of non-participants may not be surprising, its apparent assumption that states not parties to it could be bound by its terms would not appear to be in the best interests either

1 United States Working Paper, Draft United Nations Convention on the International Seabed Area, tabled Aug. 3, 1970, United Nations General Assembly Committee_on_the Peaceful Uses of the Seabed and Ocean floor Beyond National Jurisdiction, U.N. Doc. A/AC.138/25 See Report of the Committee on the Peaceful Uses of the Seabed and Ocean Floor Beyond the Limits of National Jurisdiction, 25 U.N. GAOR Supp. 21 at 130, U.N. Doc. A/8021 (1970) [hereinafter cited as "U.S. Draft"].