source policy-it will be on the basis of accommodations fairly reflecting legitimate interests in due proportion to their true weight. It follows that a fair compromise on the issue of governance must rest on the creation of a council which operates as the executive branch of the Authority with membership, powers, and voting procedures that can achieve the same kind of accommodation. Given a readiness to strike fair bargains on each of the three key issues I have outlined, the deep seabed mining problem can be solved. Dept. of State Bulletin, Vol. 78, No. 2010, Jan. 1978, pp. 39-41. In 1976 the United States had proposed a parallel system of deep seabed mining, under which one-half of the mining sites would be exploited by states or private contractors and one-half by an International Seabed Authority, to be created by treaty, or by developing countries. On January 23, 1978, Ambassador Richardson testified before the Subcommittees on International Organizations and International Economic Policy and Trade of the House Committee on International Relations, in regard to H.R. 3350, a bill to promote the orderly development of hard mineral resources in the deep seabed, pending adoption of an international regime relating thereto. Ambassador Richardson set forth the principal reasons for the shift in executive branch policy that had earlier sought to postpone enactment of domestic deep seabed mining legislation until international agreement on exploitation of the deep seabeds should have been achieved, to support for congressional efforts to develop legislation consistent with the United States substantive position on international law objectives for a deep seabeds regime. He discussed the elements which United States domestic legislation should contain, including reciprocating state provisions, to make United States deep seabed mining activities as internationally acceptable as possible. Excerpts from Ambassador Richardson's statement follow: Deep seabed mining is probably the key to determining whether or not a comprehensive law of the sea agreement can be negotiated that will serve the national interests of the United States. With regard to deep seabed mining, the last session of the Law of the Sea Conference was distressing from both a procedural and substantive point of view... I should add that there is an increasing awareness among conference participants of the need to change substantially the deep seabed portion of the Informal Composite Negotiating Text (ICNT). This was evident in consultations last November and December which culminated in a meeting of some 90 representatives convened by conference President [H. Shirley] Amerasinghe [of Sri Lanka]. The changes needed to the ICNT on deep seabed mining will be a principal subject of discussion at the intersessional meeting we will attend in New York February 6-17. After the last Law of the Sea session, I announced that I would recommend to the President that the United States thoroughly review its ocean interests in light of the procedures employed and the substantive results of that session. As part of that review, which is still under way, we are evaluating various alternatives available to achieve our ocean objectives. Having been identified as the most controversial subject in the ICNT, the regime for deep seabed mining figures prominently in our consideration. Administration Support Since my last appearance before members of this committee, the President has decided to support congressional efforts to develop deep seabed mining legislation consistent with our substantive position. The decision by the President to support interim deep seabed mining legislation is a shift from the Administration's prior disinclination to lend its support. There are many reasons for this change. First, we are aware that legislation will be needed with or without a successful law of the sea treaty. After a convention is concluded, several years will undoubtedly pass before the convention becomes effective. The length of time involved will depend upon what the convention requires regarding the number of states that must ratify the convention prior to its final entry into force and on whether or not it provides for provisional entry into force of the deep seabed mining regime. Second, the Administration believes that the orderly development of deep seabed mining should not only be continued but also be encouraged. Third, we believe that interim domestic legislation based on the elements in the Administration's position will not, as is often charged, negatively affect the prospects for reaching agreement at the Law of the Sea Conference. On the other hand, some concern has been expressed in the Congress and the executive branch that Administration opposition to deep seabed mining legislation could be misunderstood as a total reliance on the Law of the Sea Conference for achievement of our seabed objectives. In this regard, if efforts to achieve a comprehensive agreement on the oceans are not now successful, we should at least try to act in concert with nations having interests similar to our own. By taking a leadership role and by enacting legislation which includes reciprocating state provisions, we will be better prepared if the conference does not result in a treaty. Among the principal elements of the Administration's position are that the legislation: Should be transitional pending international agreement on a regime for the deep seabed; Should proceed on the legal basis that, notwithstanding future agreement on an international regulatory regime, deep seabed mining is a freedom of the high seas; Should provide for environmental protection, sound management, safety of life and property at sea, and effective law enforcement; • Should provide for the establishment of an international revenue sharing fund prior to the issuance of commercial recovery permits; Should encourage enactment of deep seabed mining legislation by other nations patterned on our example through the mechanism of reciprocating state recognition of rights; Should require our permittees' mining or processing vessels to fly the flag either of the United States or that of a reciprocating state; Should not contain investment guarantees against financial losses as a consequence of future federal action, that is, ratification of an international treaty; • Should not authorize licenses or permits for specific mine sites that could be misinterpreted as an assertion of sovereignty over an area of the seabed; • Should not require processing plants to be located in the United States; and • Should not place any flag requirement on deep seabed ore transporting vessels. Investment Guarantees Perhaps the most controversial issue in H.R. 3350 involves investment guarantees. Proponents of such guarantees argue that licensees or permittees should be compensated for investment losses that may be caused by the entry into force of an international agreement concerning deep seabed mining. The Administration opposes investment guarantees as a matter of principle. For investment guarantees to be necessary, the treaty must fail to provide for terms, conditions, and restrictions for licensees and permittees as favorable as those provided in our domestic legislation. Finally, the treaty would have to prejudice the rights of licensees and permittees at a time and in a manner meriting financial compensation. We do not believe that the sequence of events just described warrant the conclusion that an investment guarantee is necessary, even if it were desirable. International Fund The legal basis for establishing an interim mining regime stems from the high seas character of the deep seabed. The principles of high seas freedoms and the common heritage of mankind, so often posed as contradictions, are not, in fact, incompatible. Both principles stem from the fundamental premise that sovereignty over the area cannot be claimed by an individual nation. Accordingly, both principles require that we guard against such assertions. So long as our legislation is restricted to persons and vessels subject to U.S. jurisdiction and no exclusive rights to deep seabed areas are conferred, the licensing arrangements are compatible with existing international law. The Presidential decision to support deep seabed mining legislation included the establishment in the legislation of an international revenue sharing fund. Such a fund is an essential feature of Ad ministration support for legislation and provision for its establishment must be an integral part of any legislation passed. We will be prepared, subsequent to the enactment of legislation, to submit legislative recommendations on the contributions required to the fund. But we would oppose the issuance of commercial recovery permits before the fund is established. We believe such a fund would demonstrate U.S. support for the principle, now included in the ICNT, that commercial activities in the deep seabed should benefit all nations when the treaty enters into force. Environmental Concerns A principal concern reflected in the Administration's attitude toward deep seabed mining legislation is that the environment must be protected. Indeed, environmental consequences must be one of the foremost factors to be considered in the application for and issuance of a license or permit. The Administration supports the requirement that, prior to issuing a license or permit, the Secretary of the lead agency should determine specifically that there will be no significant effect on the quality of the environment. This determination would be based on information gathered in an environmental impact statement prepared in accordance with the National Environmental Policy Act and other provisions in the legislation. The Administration's position is that there should be adequate monitoring of the environmental consequences of all deep seabed mining activities and that regulations be continually revised and applied to ongoing mining operations as environmental information becomes available. Reciprocating State Concept The reciprocating state concept is one of the unique features of the deep seabed mining bills before the Congress. The idea of reciprocity grows out of the high seas character of deep seabed mining. It is important to understand that neither the United States nor any other nation can appropriate high seas areas. The deep seabed is, by definition, a high seas area. Hence, the United States must rely upon its jurisdiction over the person or vessel involved to regulate deep seabed mining activities. Since we do not own the area, we have no legal basis to confer exclusive rights on our licensees or permittees that would be valid against persons not subject to our jurisdiction. To preclude any implication that we are appropriating high seas areas, we avoid the allocation of specific areas of the high seas seabed in licenses or permits. Instead, the procedure we support is for applicants to file a work plan which includes details about the proposed location of the work area. Assuming other requirements are met, the administering agency would only approve nonconflicting work plans. The reciprocating state giving the first notice of work plan submissions would be entitled to rely upon other reciprocating states not to approve work plans which conflict. The reciprocating state concept is also useful in insuring that necessary enforcement and environmental and other monitoring func tions are carried out aboard vessels or with respect to crews of either the licensee or permittee's state or that of reciprocating states. By setting standards for designating reciprocating states, we should insure that deep seabed mining occurs with approximately the same concerns for the environment and the safety of life and property at sea. Supply of Minerals There has lately been much discussion of the effects of the legislation on the supply of critical minerals and on the economies of current suppliers. În our view, creating the conditions that would allow seabed mining to be viable would serve the U.S. national interest by assuring access to an alternative minerals source. We are dependent upon imported supplies for almost all our nickel and all of our cobalt and manganese. The establishment of a seabed mining industry in the United States would diversify and increase our sources of supply for these metals. Therefore, it is in our interest to provide a framework fostering our long term interests by establishing the legal and administrative basis for seabed mining through this legislation and, hopefully later, through a law of the sea convention. Some have argued that we should not only develop seabed mining to provide a broader resource base in the long run but that we also should artificially facilitate the development of seabed mining in the short and medium term in order to protect ourselves from the possibility that land-based producers of nickel, cobalt, or manganese might form cartels-along the lines of the Organization of Petroleum Exporting Countries that would artificially restrict supplies and raise prices. We believe, however, that the danger of cartelization has been overdrawn because the market circumstances are quite different. Some governments have questioned the seriousness of our support for domestic deep seabed mining legislation. They would be mistaken to underestimate our resolve to establish a timely legal regime governing deep seabed mining. As I have repeatedly said, the United States much prefers a negotiated, multilateral regime. But we must have alternatives for pursuing our oceans interests. As a matter of policy, we seek orderly progress toward the development of a deep seabed mining capability for the United States. We want the legal regime applicable to these activities to be as internationally acceptable as possible. At the same time, we want to give the Law of the Sea Conference every chance to succeed. But if agreement is not forthcoming or negotiations are unduly prolonged, we are prepared to support domestic legislation consistent with our substantive policy goals as the basis for mining by our citizens. Dept. of State Bulletin, Vol. 78, No. 2013, Apr. 1978, pp. 54-56; Deep Seabed Hard Minerals Resources Act: Hearings and Markup on H.R. 3350 Before the House Committee on International Relations and its Subcommittees on International Organizations and on International Economic Policy and Trade, 95th Cong., 2d sess. (1978), pp. 27–32. See, further, Ambassador Richardson's report to the House Committee on International Relations, May 24, 1978, on the status of negotiations in the |