Star Law Analysis
Law Of The Sea
Strategic divisions of the oceans in seabed mining
Cmdre M Khurshed Alam
THE UNCLOS III was adopted in 1982, notwithstanding the strong objections of the industrialised states to many of the provisions of Part XI, on seabed mining in the “Area”. The “Area” is the seabed and ocean floor and subsoil thereof beyond the limits of national jurisdiction. The Area and its resources are the common heritage of mankind and no state can claim or exercise sovereignty or sovereign rights over any part of the Area or its resources. This controversy over seabed mining had occupied the centre stage of the convention for more than 15 years and indeed, this deadlock threatened to unravel the work of decades. In the early 1970s, at the time the drafting of the Convention began, the developing countries argued that, because the resources of the Area beyond the zone of coastal state jurisdiction were "the common heritage of mankind," and the deep seabed should be exploited only under the auspices of the United Nations, and seabed miners should share the benefits from their endeavours with mankind as a whole. Private firms and consortiums from the industrialised states, however, were undertaking most of the exploration and technology development related to seabed mining. These firms risked their own assets and worked for their own stockholders, and neither they nor their governments felt an obligation to share either their profits or their technology with a UN "Enterprise" that proposed to compete with them.
The original Part XI of the Convention explicitly asserted UN control over the mineral resources of the area of the deep seabed seaward of the limits of national jurisdiction. Moreover, it established a seabed-mining regime called, the International Sea-Bed Authority (ISBA). Specifically, the Convention set up a "parallel system" in which the seabed would be mined both by an Enterprise controlled by the ISBA and by various national and multinational entities, mostly from the industrialised world. To make this system feasible, the latter were to be required to pay substantial up-front fees, which would be used to fund the ISBA and the Enterprise. The other mining entities were also to turn over to the ISBA for exploitation by the Enterprise half of each mine site they had identified. These and other seabed mining provisions were strongly opposed by the United States and many other industrialised countries, which characterised the regime as so interventionist that would discourage investment and prevent development of the seabed resources.
Besides, the United States, United Kingdom, and West Germany did not sign the Convention, and the other industrialised nations that did sign it, did not subsequently ratify it. Instead, they proceeded to abide by the provisions of the Convention except for those relating to seabed mining. In 1984, Belgium, France, West Germany, Italy, Japan, the Netherlands, the United Kingdom, and the United States entered into the "Reciprocating States Agreement," which set forth the rules and procedures under which, in the absence of an UNCLOS Convention, their firms would undertake seabed mining. In lieu of registering their mine sites with the ISBA Preparatory Committee as called for in Part XI of the Convention, most of the Western seabed mining consortia registered their exploratory sites under the existing laws of the United Kingdom, the United States, or West Germany.
All these problems came up due to discovery of potato-size polymetallic nodules, which constituted a potential alternative source of strategic minerals. The nodules are composed largely of iron and manganese oxides but often contain small amounts of nickel, copper, cobalt, and other metals. Since then, however, the prospects for land-based mining have improved significantly. Modern exploration techniques have uncovered additional resources, and new mining methods have decreased costs. The main components of polymetallic nodules -- iron and manganese oxides -- are currently of no interest to prospective seabed miners, because they are available in abundance from numerous cheaper land sources. To be even minimally attractive to seabed miners, nodules must have a combined nickel, copper, and cobalt content of at least 3 percent. Of them cobalt appears as the most potential for profit.
Cobalt is a component of special alloys employed in many military, aerospace, and industrial applications, and there are no satisfactory substitutes in critical applications. Because the sources of cobalt are limited and not easily expanded, a disruption in the supply of cobalt from one of the land-based producers could drive up global prices. According to mining industry analysts, it would probably cost several billion dollars to mount a seabed cobalt-mining operation, far more than the cobalt would be worth. Industry experts estimate that seabed-nodule mining is not likely to become competitive with land-based mining for at least the next decade. Polymetallic nodules are commonly found far out at sea at depths of 20,000 feet or more. Other mineral deposits found at much shallower depths may offer attractive alternatives to nodule mining, especially if the deposits are within 200 miles of a coastal state.
The metalliferous sulfide deposits along the crest of the mid-oceanic ridge at depths of 12,000 feet or so near volcanic vents have heated the seawater to hundreds of degrees. At that pressure the seawater remains liquid but turns strongly acidic, to the point that it leaches minerals out of the rock. As the warm, mineral-rich water rises, it cools and the minerals precipitate out and are deposited on the seafloor. At some vent sites, the deposits contain metal compounds of singular purity. At other sites they contain a much wider variety of minerals -- including lead, zinc, silver, gold, and germanium -- than the polymetallic nodules lying on the deep seabed. Such variety would offer investors and miners some protection from plunging prices of a single metal.
The vent deposits are concentrated in small areas, in contrast to the huge mine sites -- up to 150,000 square kilometers, over which polymetallic nodules would be collected. Oxides of nickel and cobalt have been discovered on the flanks of islands and seamounts at depths of about 3,000 feet. In general, such crust deposits would most likely be found within the EEZs (on the continental shelves) of coastal states, which consequently would have the sole right to exploit them. The technology for mining vent and crust deposits has yet to be developed, but preliminary indications are that both forms of mining could be undertaken with significantly less investment than nodule mining. In both cases, the technology for processing the minerals would be similar to that already used on land.
Because of such importance of the minerals etc and consistent refusal of the developed countries to sign the UNCLOS III, in 1990, amidst a general thaw in both East-West relations and North-South relations, the UN Secretary General sponsored new consultations aimed explicitly at ameliorating the objections of the United States and the other industrialised countries to the Convention's seabed mining regime. The new Agreement changed the proposed earlier Part XI regime in several fundamental ways. In particular, it reduced the power of the developing countries as a voting bloc in the ISBA and increased the influence of the United States and other industrialised countries. The Assembly is now permitted only to ratify or remand decisions of the Council; it cannot originate policy. Among other things, the Agreement sets up three four-member chambers of the Council--one for the major Consumers (importers) of minerals that could be mined from the seabed, one for the major Investors in seabed mining, and one for the major land-based Producers (exporters) of minerals that could be mined from the seabed.
Another arrangement would permit as few as 11 developing countries to block decisions of the Council and it gives the United States and Russia seats in the Consumer chamber. Conse-quently, the US government could block decisions of the Council with the support of two of the other three members of the Consumer chamber. It also requires that substantive decisions in four areas be made only by consensus. The areas are -- protecting land-based producers from adverse effects of seabed mining; revenue sharing; amendments to rules, regulations, and procedures implementing the seabed mining regime; and amendments to the seabed mining regime itself. In addition, the Agreement addresses other US objections to the original seabed mining provisions by establishing a Finance Committee controlled by the five largest contributors to the Authority's budget to make budget and financial decisions by consensus. Now the seabed mining consortia are simply encouraged to undertake joint mining operations with the Enterprise, eliminating production control measures and significantly reducing the fees required of commercial miners before the onset of production. The Enterprise, which would engage in seabed mining on behalf of the developing world, will not be established unless and until the economic viability of seabed mining has been demonstrated.
Indeed, the Agreement contains a provision to the effect that the 10 developed countries registered as pioneer investors are Belgium, Canada, France, Germany, Japan, Italy, the Netherlands, Russia, the United Kingdom, and the United States; the other four pioneer investors are China, India, Poland and South Korea. In July 1994, the new Agreement was presented to the UN General Assembly, and a resolution supporting it was overwhelmingly approved, with 121 states in favour and none opposing. As of March 2006, 122 countries including USA and all other major industrialised states have ratified the Agreement.
Many of the developing countries had become willing to reconsider this issue, because they recognised that the developed countries were unified in opposition to these provisions and would not accede to the Convention unless they were changed. The new Agreement reached in 1994 eliminated, or greatly weakened, the provisions to which the industrialised states most objected but retained the framework in which seabed mining would be conducted under the authority of the ISBA. The compromise was made possible by the conclusion of both sides that what each viewed as the optimal seabed mining regime was not achievable. The general view among the industrialised states is that the seabed mining provisions are now acceptable, particularly when weighed against the importance of supporting the rest of the objectives of the Convention. The general view among the developing countries is that paving the way for universal acceptance of the Convention was worth the concessions they made on seabed mining in the Agreement.
The convention and the fundamental changes from the 1994 Agreement constitute a huge success for the world body and especially to the US and other industrialised states. It can be fairly said that there is a broad acceptance in state practice of the fundamentals of the regime -- that the resources of deep seabed are the common heritage of mankind. It would be difficult to repeat the achievements of this convention if we were to begin anew or to rely on unclear assertions that something more could be achieved by the developing countries. Bangladesh has signed and ratified this Seabed Mining Convention in 2001. But have we made any effort to know what is there in the seabed of the Bay of Bengal and how to claim the extended continental shelf up to 350 nm?
The author is ex-Chairman, Mongla Port Authority.