STATUS REPORT ON AGENCY SUPPORT OF THE NSC INTERAGENCY LAW OF THE SEA (LOS) TASK FORCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000800130001-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 230
• Document Creation Date: December 9, 2016
• Document Release Date: October 20, 2000
• Sequence Number: 1
• Publication Date: February 25, 1974
• Content Type: MF

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25 February 1974
MEMORANDUM FOR: Deputy Director for Intelligence
SUBJECT Status Report on Agency Support of the NSC
Interagency Law of the Sea (LOS) Task Force
A. BACKGROUND
1. The Interagency LOS Task Force was created by executive
order in 1970. CIA was asked to be a member of the Task Force
Working Group, and OBGI was designated to provide the Agency repre-
sentative. Later, the LOS Task Force was placed directly under the
NSC Undersecretaries Committee.
2. CIA participation, relatively small compared with some other
agencies and departments, has consisted of: (a) information support
to the Task Force; (b) review and comments on NSC oceans policy
studies for the White House; and (c) preparation of memoranda and
current intelligence articles on LOS and related topics.
3. In recent months, additional Agency support has been sought
by John Norton Moore, the Chairman of the Task Force. He has asked
CIA, and the Agency has agreed, to undertake several specific assign-
ments in support of preparations for the International LOS Conference
scheduled for 20 June to 29 August 1974 in Caracas.
B. ASSIGNMENTS
1. To prepare a series of LOS country studies on a number of
selected countries. Using the Agency s area expertise and research
and reporting capabilities, these studies include pertinent basic
factual information and an analysis of each country's record, interests,
and policies on the major LOS issues. Appropriate maps will accompany
each country study.
2. To prepare one or two "mini-atlases" on LOS subjects: These
reports will be single-sheet information pieces similar to BGIPs Geo-
graphic Memoranda. They will be Unclassified, generous with graphics,
and limited in text. The audience will be important policymaking and
lawmaking people who have indirect responsibility or interest in LOS
matters but have not been following developments closely.
State, NSC, JCS declassification & release instructions on file
CONFIDENTIAL
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4. To prepare special reports on specific geographic, political,
and economic topics. These include special problem areas such as
islands, archipelagos, semi-enclosed seas, deep mining capabilities
of foreign powers, chances for favorable vote on LOS positions, etc.
25X1 C
5. To collect information on foreign activities and statements
related to L S, 0
C. CURRENT STATUS
e being prepared primarily by OBGI.
OCI, OER, and OSR will coordinate
and W i l l be invited to make specs is contributions. Design of a format
prototype and drafting of three studies are nearing completion. Target
is to produce 35 to 50 studies by Conference time.
2. Mini-atlases. OBGI has the outline and research completed
for a mini-atlas on the basic LOS issues. Writing will commence shortly.
Production time estimated to be 2 months. Discussion is being initiated
with OER to prepare a mini-atlas on transportation implications of the
LOS issues.
4. Special reports. Several LOS and LOS-related studies have
recently been published by OBGI. These include:
a. Indonesia's Archipelago Waters
b. The West Coast Korean Islands
c. The Malacca-Singapore Straits: Passageway of
Internationa Concern
.. d. East Asian Contested Islands
1A L
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STATSPEC
The following reports are nearing completion:
e. Soviet Activities in Exploration and Exploitation
of the Seabeds
f. The East Asian Continental Shelf: Resources, Claims,
and Problems
OPR has assigned an analyst to produce a political analysis of the main LOS issues and their implications,
topics from foreign broadcasts, newspapers, and selected books and
5. Collection. In response to requirements prepared by OBGI
=has appreciably broadened and stepped up its collection on LOS
iournals.
D. RESOURCE INVESTMENT
At present, as best I can estimate it, DDI resource investment
(professionals and intelligence assistants) is as follows:
OBGI: GD - 5; CD - 1; Production Staff - 1 ...... 7
OCI: 1 full time; 2 or 3 part me ............... 2
OER: 1 full time, 2 or 3 part time ............... 2
OPR: 1 full time, 1 part time. ................... 1 1/2
CRS: several part time (will increase greatly
when CRS goes into production).. ............. 2 to 3
1 part time .................................. 1/2
As momentum increases, these figures will increase. CRS may have 15 - 20
people on biographic studies a month or six weeks from now. I estimate
the rest of the Offices, overall, will need an increased manpower invest-
ment of 15 - 25%.
JQNN KERRY KINLV
ii' Director
Basic and Geographic Intelligence
PORKER
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THE DIRECTOR
You asked whether our people had ever
gotten proper credit for the high quality and
quantity of work they had performed in support
of the NSC Interagency Law of the Sea Task
Force.
The answer to your question is, in
general, "YES."
Letters and notes of commendation have
been written to many of those involved. In
addition, our highly professional representative
on the LOS Task Force Working Group, OB(I's
has been approved for receipt
of the Certi ica e of Distinction and has
recently been promoted. Moreover, his tireless
administrative assistant has received a QSI.
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MEMORANDUM FOR: -4 (info
The answer to Mr. Colby's question,
according to JKK, is in general "Yes."
Apropos of this, JKK informs me that he
just learned that has been
OK'd for the Certificate of Distinction for 1
his LOS efforts and that he (JKK) was going
to invite you to do the honors at a ceremony
for
Will you do?
FORM GN 54 lo) WHICH RELACES
MAY FORM
1 AU
BE US10 ' ED.
MEMORANDUM FOR:
The Director
Although you probably know that we are
participating in the Government's preparations
for this summer's International Law of the Sea
Conference, you may not appreciate how much
we are doing on this subject and Potentially how
important the outcome of this conference may
be to the US economic, military, and political
interests.
Attached is a memo from Jack King outlining
the various things we are doing. We could
arrange a 30-minute briefing for you if you
wish on the nrn-i, _r ,,
~~ 4110 L,aw of the Sea.
4 M
arch 1974
Paul V Walsh / fl A rr
FORM NO. REPLACES FORM 10-10I
I AUG 54 10~ WHICH MAY BE USED.
Acting DDI
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1. Ken Rush letter, requesting CIA Support
2. Flanigan letters
3. Draft Instructions to US Delegation, Caracas
4. CIA Support
a. Paul Walsh outline
b. OPR Memo: Issues and Implications
c. OBGI Memo: East Asian Contested Islands
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TAB
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WASHINGTON January 7, 1974
NSC UNDER SECRETARIES COMMITTEE
As you know, the Third United Nations Conference
on the Law of the Sea began with an organizational
session last month. The first substantive session will
be held in Caracas, Venezuela from June 20-August 29
with a subsequent session, if necessary, to be held
no later than 1975.
The Law of the Sea Conference is one of the most
important multilateral negotiations in which the United
States has participated. At stake is an agreed regime
for the oceans which will delimit national and inter-
national rights in navigation, living and non-living
resources, protection of the marine environment and
many other issues. It is important that we have con-
tinuing up-to-date information about the positions of
key countries and that we prepare as thoroughly as
possible. For this reason, I have requested John
Norton Moore, the Chairman of the NSC Interagency
Task Force on the Law of the Sea to form a new Working
Group of the Task Force to develop and maintain infor-
mation about the positions of the key countries in
the negotiations and other information helpful to the
negotiating effort. I would greatly appreciate it if
the CIA, which has already been a most helpful participant
in the work of the Task Force, would participate in the
new Working Group. More specifically, it would help
the new Working Group as it begins its work if the CIA
could undertake the following projects for the Working
Group:
(1) Completion of country analyses for all coun-
tries in the negotiations. These analyses would include
information concerning the positions of the country on
all major issues in the negotiations as well as its
principal national'interests in the negotiations;
The Honorable
William E. Colby,
Director, Central Intelligence Agency,
Washington, D.C.
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(2) Participation in the Task Force Working
Group consideration of voting estimates for key
issues;
(4) Preparation of several "mini-atlases",
on issues designated by the Working Group; and,
(5) Such additional studies as may, from
time to time, be suggested by the new Working
Group of the Task Force.
We have greatly appreciated your assistance
to the Task Force and look forward to continuing
close cooperation as the substantive session of
the Conference approaches.
SECRET
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For information and appropriate action
'I.
r_cluce oral comment to the
Executive SeTtary
7 bAarch 1974
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 Approved
WASHINGTON, D.C. 20500
SECRET March 6, 1974
TO: The Honorable
James R. Schlesinger
Secretary of Defense
Room 3E880, Pentagon
FROM: Peter M. Flaniga
Executive Directo
SUBJECT: Department of Defense Interests in the Law of the
Sea Negotiations
As you are no doubt aware, this summer the United States and
147 other nations will meet in Caracas to begin substantive
negotiations on a comprehensive treaty governing the Law of
the Sea. Last summer a number of agencies, led by the Treas-
ury Department, were concerned that the U.S. policy positions
on several of the outstanding issues did not adequately protect
U.S. economic interests. This was alleged particularly to be
the case in relation to our position regarding deep seabed
mining.
Because of this concern, a State-chaired interagency task
force conducted a lengthy review of U.S. economic interests
in the Law of the Sea negotiations. This review has con-
cluded that while most U.S. LOS policy is consistent with our
economic interests, some of our positions have been adopted
for foreign policy reasons or for bargaining purposes in order
to preserve vital security interests (e.g. unimpeded transit
through straits). Naturally, those of us whose principal
focus is economic are concerned that whatever economic con-
cessions are made in any negotiation, be made for concrete
advantages in other fields and not conceded for insubstan-
tial purposes.
It is with interest, therefore, that my attention was drawn
to a paper (attached at Tab A) by Robert E. Osgood, formerly
a member of the National Security Council staff, and, as I
understand, a prime mover in the early development of U.S.
LOS policy in the first Administration. Mr. Osgood's paper
is rather critical of our current Law of the Sea policy,
seems to indicate that our security interests can be satis-
factorily accommodated without a new treaty, and implies that
the negotiations may even jeopardize existing U.S. interests.
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Moreover, my staff informs me that the Navy's Center for Naval
Analysis has prepared a rudimentary intelligence analysis of
where other nations stand on the important LOS issues, and that
the preliminary CNA analysis indicates that as of now the U.S.
will not, in fact, achieve its security objectives in the in-
ternational negotiations.
I would think that you might wish to consider views such as
these, assuming they represent reasoned analysis, when review-
ing DOD's ultimate position on U.S. Law of the Sea policy.
Currently, the State-chaired. interagency task force is prepar-
ing a review of U.S. LOS policy which is to take into account
security and foreign policy interests as well as economic ones.
Perhaps this may be the most appropriate forum in the immediate
future for DOD views to be expressed. I am informed, however,
that the initial draft of the review papet does not address the
types of concerns that arise from reading the Osgood article or
from the CNA analysis. I find this rather troubling, particu-
larly insofar as we may be setting policy without adequate in-
telligence analysis regarding the probable outcome of any
negotiation.
I have asked my staff to prepare a paper which develops some
of the questions that seem to arise from both the Osgood
article and the CNA analysis. I am attaching it at Tab B
in case you believe there may be merit in addressing some of
the issues raised prior to production of a final NSSM or
issuance of a national security decision memorandum.
Attachments
Tab A - Paper by Robert E. Osgood
Tab B - Defense Interests in the
Law of the Sea
cc: Secretary of Treasury
Deputy Secretary of State
L,,.Director, CIA
Director, OMB
Deputy Assistant to the President
for National Security Affairs
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to incItt e oral conxnent to the DCL
For information and appropriate action
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 COUNCIL ON. INTERNATIONAL ECONOMIC POLICY
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March 6, 1974
The Honorable
Kenneth Rush
Deputy Secretary
Room 7220, New State
FROM: Peter M. Flanigan
SUBJECT: Preparations for Review of U.S. Policy on the
Law of the Sea
As I am sure you are aware, the interagency task force on
the Law of the Sea, chaired by the Department of State, is
currently preparing a comprehensive review of U.S. policy
and interests in the LOS negotiations. As I expressed in
my memo to you of January 3, 1 am particularly concerned
that this review adequately and fairly address the major
policy issues facing the U.S., and not concentrate on
secondary issues or tactical negotiating options.
I have been informed by my staff that the initial draft of
the review does not adequately focus on the major U.S. in-
terests and policy issues at stake in the Law of the Sea
negotiations. Rather, after a cursory pro and con preamble,
it launches into a detailed discussion of tactical options
to achieve a negotiated treaty. In light of our experience
at the preliminary UN meetings in the Law of the Sea, it
seems essential to me that we focus high level attention
once again at what we expect to achieve at these negotiations,
and only then how we propose to achieve it. I would urge
that the next draft of the overall LOS review take into
account what I perceive to be a need for elucidation and
consideration of these important issues at high levels
within our government. Following such a consideration, I
would think that a tactical paper would be.most appropriate.
In particular, I believe the review should focus on our
objectives at the Conference, the alternatives to a com-
prehensive treaty (either as a policy option or as a fall-
back should the Conference fail to reach agreement), what
type of revenue sharing oo seabed authority we should
pursue, and what type of conditions in the treaty might
render the treaty unacceptable.
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I also understand that Deputy Secretary Simon is sending you
a memorandum suggesting a meeting to discuss the recently
completed economic review of our LOS position. I would
second his suggestion and urge that the meeting be held as
soon as is convenient upon your return.
cc: Secretary of Treasury
Secretary of Defense
Director, OMB
ctor, CIA
Deputy Assistant to the
President for National
Security Affairs
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TAB
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29 March 1974
NOTE FOR THE DIRECTOR
SUBJECT: Draft Instructions for Law
of the Sea Conference
Your comments and/or concurrence
on the instructions for the Law of the Sea
Conference are due to Secretary Rush by
COB Friday, 5 April. We will have a draft
response ready for you by COB 3 April.
This, of course, will not go into the many
problems embraced by the Law of the Sea
negotiations. If your schedule can ac-
commodate, I think it would be worthwhile
for you to have a 30-minute informal
briefing with There
is a possibility that the Under Secretaries
Committee will hold an early meeting to
w.W discuss this paper.
Either Paul or I should represent
you at this meeting to provide continuity.
0
Ed Proctor
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NSC UNDER SECRETARIES COMMITTEE
SECRET
KsC-U7sM-137C
March 27, 1974
TO: The Deputy Secretary of Defense
The Assistant to the President for
National Security Affairs
The Director of Central Intelligence
The Chairman of the Joint Chiefs of
Staff
The
The
The
The
The
Deputy
Secretary
of the Treasury
Deputy
Attorney
General
Under
Secretary
of
Interior
Under
Secretary
of
Commerce
Under
Secretary
of
Transportation
The Director, Federal Energy Office
SUBJECT: Draft Recommended Instructions for the
Law of the Sea Conference
Attached are (1) the Law of the Sea Task
Force Chairman's Summary of the draft recommended
instructions for the US Delegation to the Third
UN Conference on the Law of the Sea, prepared
pursuant to NSDM 225 and NSDM 240 by the Inter-
agency Task Force on the Law of the Sea, and
(2) the draft recommended instructions.
Addressees are requested to submit agency
comments and/or concurrences on the draft recom-
mended instructions in writing by c.o.b. Friday,
April 5, 1974 to Mr. Stuart H. McIntyre, Staff
Director, Interagency Task Force on the Law of
the Sea (D/LOS, Department of State; telephone
632-9514).
UuIL t. 1 -4 Aft "t.
Brandon Grove, Jr.
Staff Director
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cc: The Director, Office of Management
and Budget
The Chairman, Council on Environmental
Quality
The Executive Director, Council on
International Economic Policy
The Director, National Science Foundation
The Chairman, Council of Economic Advisers
The Administrator, Environmental
Protection Agency
The Deputy Director, United States
Information Agency
The Director, Agency for International
Development
The Special Representative of the President`,
for the Law of the Sea Conference
SECRET
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March 25, 1974
Proposed Instructions for the
Third United Nations Conference on
the Law of the sea
Prepared Pursuant to NSDM 240
by the NSC Interagency Task
Force on the Law of the Sea
John Norton Moore
Chairman, the NSC
Interagency Task Force
on the Law..of the Sea
and Deputy Special
Representative of the
President for the Law of
the Sea Conference
SECRET
CLASSIFIED BY r.~..~-C .............
EXTMTT FIFGOM GENERAL DECLASSIFICATION
SC 1i..flt tj (--)F EXFCT rvE C t,131 11652
LFMb'J110 CATL-C'011,
........
AUTOMATICALLY D.ELCLAS,SIFIED ON . '. . l1 CJY~
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NSDM 240: The Third United Nations Conference
on the Law of the Sea
The President directed in NSDM 240 that the Chairman,
NSC Under Secretaries Committee, forward recommended
instructions for the U.S. Delegation to the June-August
1974 session of the Law of the Sea Conference for con-
sideration by the President. The recommended instructions
follow.
Introduction
The first substantive session of the Law of the
Sea Conference is scheduled for Caracas from June 20 to
August 29, 1974. New instructions can be most effectively
implemented if they are approved well in advance of the
Conference, in order to permit pre-Conference consultations
and negotiations with other governments. Accordingly, it
would be most helpful to the delegation to have approved
instructions by April 15, 1974.
Pursuant to NSDM 225 of July 16, 1973, a comprehen-
sive review of U.S. economic policy interests relating to
the law of the sea negotiations has been undertaken by
the NSC Interagency Task Force on the Law of the Sea,
and the findings of that review are taken into considera-
tion in these recommended instructions together with
other important aspects of the U.S. law of the sea position,
including political, strategic, environmental, and
scientific interests.
A summary of existing substantive positions and
negotiating authority is attached at Tab A. This report
contains recommendations for changes or additions thereto.
Accordingly instructions issued pursuant to this report,
together with those portions of earlier instructions not
superseded, would constitute the instructions for the
Conference.
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It is recognized that a large number of detailed
substantive matters will need to be addressed by the
Conference. This paper deals with major issues, parti-
cularly where there are differences of opinion. On
other matters it is contemplated that the delegation
would, as in the past, be able to make substantive and
textual refinements in the U.S. position consistent with
the instructions.
A copy of the Report on the Organizational Session
of the Law of the Sea Conference, held in New York from
December 3-15, 1973, is attached at Tab B.
A. General Objectives
(1) Background of the Third United Nations
Conference on the Lawy of the Sea
The present legal regime for the oceans is largely
embodied in the four 1958 Geneva Conventions concluded
at the First United Nations Conference on the Law of the
Sea as. supplemented by customary international law and
a network of bilateral and limited multilateral fisheries
and pollution control agreements. This legal regime is
inadequate and is likely to become increasingly so in
the absence of a new comprehensive oceans law regime.
There are at least three major reasons for the inadequate
nature of the present legal regime. First, the 1958
Conference failed to agree on the breadth of the terri-
torial sea, a failure repeated at the Second United Nations
Conference on the Law of the Sea held at Geneva in 1960.
Second, the present legal regime is increasingly being
challenged by the large number of new states which have
become independent since World War II. At the time of
the formation of the U.N. system there were only about
50 independent states. Today this number has tripled to
approximately 150, most of which became members of the U.N.
after the First and Second U.N. Conferences on the Law of
the Sea. These states have made increasingly insistent
claims to participate in the formation of a new oceans
law. Many are not signatories of the Geneva Conventions
and have felt free to make broad unilateral claims which
in many cases have been damaging to U.S. interests and in
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violation of international law. This tendency of the
newer states to make sweeping unilateral claims has
been reinforced by their strong concern for their
development and their dependence on a particular
ocean use such as fisheries. Third, there has been
an intensification of old ocean uses and develop-.
ment of new uses and problems largely
associated with an increasing demand for ocean resources,
global modernization, and a burgeoning ocean technology.
The dramatically increased pressure on fisheries during
the last decade is an example of this intensification
with respect to a traditional ocean use. Similarly, it
is now evident that there must be adequate protection for
the ocean environment and that the capacity of the ocean
to absorb pollution is not unlimited. With respect to
development of new ocean uses, the rapidly developing
deep seabed mining industry provides a good example.
In all three cases the U.S. is directly and adversely
affected by the lack of a satisfactory agreed interna-
tional legal regime.
In areas in which there have been major differences
in ocean law, for example problems associated with
fishery differences between the United States and Chile,
Ecuador, and Peru, or navigational disputes between the
U.S. and Canada and Indonesia, it has generally been
politically :.nexpedient for the U.S. to protect its
interests by the use of force. In the highly inter-
dependent world in which we now live this is likely to
continue to be the case except for the most serious
threats affecting vital national interests. It is
also likely that all of the factors making for a break-
down of the present legal regime for the oceans will
continue or intensify in years ahead in the absence of
widespread agreement on a new comprehensive legal regime.
In fact, should there be a breakdown in current efforts
to reach agreement, the expectations raised throughout the
world and the political attention focused on the issue are
likely to accelerate the trend to unilateralism in the
oceans. The combination of increased unilateralism and
persistent U.S. unwillingness to protect its interests
against such unilateralism off foreign nations would be
highly unsatisfactory for protecting U.S. ocean interests
and for promoting a sensible overall ocean regime in the
common interest of all nations. Moreover, it is likely
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that the U.S. may well extend its jurisdiction uni-
laterally as evidenced by the 200-mile fishery bills
currently pending in both Houses of the Congress. Such
a unilateral extension by the U.S. could bring the U.S.
into increasing conflict with foreign nations such as
the U.S.S.R. and Japan off our own shores and make it
more difficult to protect our interests off foreign
shores.
The Third United Nations Conference on the Law of
the Sea takes place against a background of over five
years of preparatory work within the United Nations
system, preparatory work stimulated by the real problems
surrounding the legal regime for the oceans. The last
three years of this work took place within the formal
setting of the U.N. Seabed Committee under a mandate
charging it with preparing for a comprehensive Conference
on the Law of the Sea. The United States participated in
a leadership capacity in this preparatory work and the
U.S. position at the Conference will be carefully appraised
by other nations in light of the President's Ocean Policy
Statement of 1970, United States actions and statements
during the preparatory phase, and Congressional resolu-
tions and statements. As in all areas of U.S. foreign
policy, the stability of the U.S. course and the credi-
bility of U.S. words and actions are of the utmost
importance.
(2) U.S. interests to be served by a comprehensive
ocean law treatX
The United States has a variety of important interests
which would be served by a comprehensive ocean law treaty
and which should be sought at the Conference. Among them
are the following:
(a) protection of navigation in the territorial sea
and areas beyond, particularly the protection of freedom
of navigation and overflight on the high seas and in
areas adjacent to the territorial sea which may be sub-
ject to coastal state resource jurisdiction;
(b) protection of unimpeded transit through and
over straits used for international navigation;
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(c) coastal state resource jurisdiction to explore
and exploit the mineral resources of the adjacent conti-
nental margin areas;
(d) a fisheries regime which will place coastal and
anadromous fisheries under coastal state management with
at least preferential rights in the coastal state, which
will place highly migratory species under regional or
international management and which, to the extent con-
sistent with these goals, will protect traditional
fisheries;
(e) a stable legal regime for deep seabed mining
which will ensure access by U.S. firms to deep seabed
mineral resources under reasonable conditions for
exploitation;
(f) a jurisdictional basis for sound environmental
protection of the world's oceans and appropriate legal
obligations and procedures to protect the marine environ-
ment and the living resources of the oceans;
(g) a regime for marine scientific research which
will encourage rather than discourage the conduct of
research and the dissemination of results;
(h) a regime which will protect high seas uses
including SOSUS which is a vital element in our arms
control equation with the U.S.S.R.;
(i) appropriate international standards applicable
to coastal state resource jurisdiction which will promote
efficient utilization and conservation of the resources
and accommodation with other uses. These include:
1. mineral resources of the
coastal seabed economic area
(a) standards to protect other uses of the area,
particularly to ensure no unreasonable inter-
ference with navigational or other high seas
freedoms;
(b) standards for protection of the marine en-
vironment; and
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(c) protection of the integrity of agreements
and investments made in the area.
2. living resources
(a) standards to ensure adequate conservation
of stocks and dependent species;
(b)
(c)
standards to ensure full utilization of
stocks up to the allowable catch; and
standards to ensure some protection for
traditional fisheries to the extent con-
sistent with overall fishing goals.
(j) a widely accepted and reasonably definite legal
regime coupled with adequate machinery for the compulsory
settlement of disputes in order to minimize conflict and
promote stability of expectations and adherence to treaty
requirements;
(k) a regime which will protect the integrity of
agreements and investment relating to the development
of ocean resources;
(1) an agreement which will implement the concept of
the common heritage by establishing an international legal
regime in the common interest of all nations and by
providing revenues for international community purposes,
particularly assistance to developing nations;
(m) a regime which will establish exclusive coastal
state rights and coastal state duties with respect to the
construction, operation and use of deep water ports and
other structures that affect coastal state economic
interests beyond the territorial sea;
(n) an agreement which will prevent and remove, where
consistent with overall U.S. objectives, present or future
bilateral ocean use problems damaging to U.S. relations
with particular countries, for example, fisheries
disputes and archipelago problems; and
(o) a timely agreement which will promote these
objectives.
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With the possible exception of broadly extending
U.S. resource jurisdiction over continental margin mineral
resources and fish stocks, all of these objectives are
endangered by a continuation of the present trend toward
unilateral action and a breakdown in the existing legal
regime for the oceans. At least with respect to coastal
fishery stocks, since the principal distant water fishing
nations off the U.S. coast are Japan and the USSR and its
allies, any effort by the U.S. to achieve a unilateral
solution without their agreement could be quite costly
even if this were the general trend worldwide. It would
be possible to mine the resources of the deep seabed
without an international agreement. In this area as
well, a good international legal regime would provide
greater certainty and predictability for investment than
would a hodgepodge of national legislation and competing
claims. A good international legal regime would also
provide greater protection for other ocean uses such as
SOSUS.
(3) Some fundamental objectives
It is of course true that a Treaty which institution-
alizes a bad ocean regime may be worse than the present
drift to unilateralism. Accordingly, it is imperative
that the U.S. provide strong leadership toward a good ocean
regime. It also follows that the U.S. should not accept
any Treaty without regard to the substantive content.
in this connection the U.S. Delegation has repeatedly made
it clear that the U.S. will not accept a Treaty which does
not protect unimpeded transit through and over interna-
tional straits or which does not adequately protect
navigational and other high seas freedoms in areas beyond
the territorial sea. Similarly, it has been made clear
that the U.S. will not accept a Treaty that does not pro-
tect U.S. basic resource interests and any deep seabed
regime must provide for access by U.S. firms under reason-
able conditions for exploitation of deep seabed mineral
resources. The U.S. has also made clear the importance
which it attaches to compulsory dispute settlement proce-
dures and to an enduring Treaty which will be widely
adhered to and respected.
The absence of a discussion above or statement by
the delegation that a particular interest is of great
importance does not necessarily indicate that the interest
is of lesser importance. For example, because of a strong
trend in the negotiations toward substantially broadened
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coastal state resource jurisdiction as well as the
probability that a balanced posture on resource issues
will better promote all U.S. objectives, including U.S.
resources objectives, the delegation has not found it
necessary to make similar statements with respect to
ensuring coastal state control of continental margin
mineral and coastal fishery resources. Another example
is that, for security and tactical reasons, we have
avoided statements concerning our interest in the pro-
tection of SOSUS. Any final decision on the acceptability
of an overall treaty must, of course, take into account
not only interests publicly stated to be vital to U.S.
acceptance but also the overall accommodation of all U.S.
objectives. Similarly, any such decisions should realisti-
cally compare the proposed resolution of a particular
issue with the probable resolution of the issue in the
absence of a comprehensive agreement.
(4) Alternative and fallback strategies
The full range of U.S. oceans objectives can be best
served by a timely and satisfactory comprehensive oceans
law treaty. Bilateral and limited multilateral approaches,
which have been the norm in recent years, have not
adequately protected U.S. oceans interests. Many issues
such as the breadth of the territorial sea require clear
resolution if we are to achieve appropriate stability of
expectations. A bilateral or multilateral approach,
however, would require an agreement with a large number
of states and the resulting politically and economically
costly hodgepodge of relationships would be unsatisfactory.
Other issues, such as the protection of coastal fisheries,
may require agreement with states which have little
incentive to agree except in an overall comprehensive
oceans law settlement.
Similarly, a network of individual multilateral
agreements on separate issues, perhaps following the
1958 model, would not adequately protect U.S. oceans
interests. Important U.S. interests extend over a broad
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range of issues and a separate treaty approach risks
excluding some of those issues. Such a separate approach
would also provide less leverage to the U.S. on a number
of important objectives, particularly U.S. navigational
and coastal fishery objectives, than would a comprehensive
single convention. Finally, separate treaties are likely
to create a confusing pattern of legal relations between
parties to the new conventions and the 1958 Geneva
Conventions and could not as satisfactorily contribute
to the needed stability of expectations and avoidance of
conflict in oceans uses.
If, of course, it does not prove possible to conclude
a timely and successful comprehensive oceans law treaty,
the U.S. may wish to pursue alternative strategies for
particular issues, at least until such time as a successful
comprehensive treaty proves feasible. In this connection,
the U.S. has publicly stated that if agreement is not
reached by the end of 1975 it will consider alternative
national legislation as a means of providing a satisfactory
investment climate and environmental regulation for U.S.
firms interested in deep seabed mining. Similarly, we
may need to examine alternative strategies for protection
of U.S. coastal fishery stocks if a timely agreement is
not concluded. Protection of these or other U.S. interests,
if in fact. possible, would require agreement among
interested and like-minded states if there were to be a
complete failure of the Conference.
(5) The role of the Caracas Session of the Conference
The United States should attempt to move the Caracas
session as close as possible to explicit or implicit
agreement compatible with our substantive interests. A
timely Conference is important both because of U.S.
fishery and deep seabed interests in timely agreement and
because of the need to reach agreement before pressures
for unilateral action overtake multilateral opportunities.
As such, it is important that we approach Caracas prepared
to reach final agreement. Informal talk of a 1976 session
may be a self-fulfilling prophecy unless the U.S. takes
vigorous action to promote negotiations in Caracas. In
this respect our overall posture on all issues will be
important in signaling to other nations whether Caracas
will be a meaningful session. At the same time, it
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remains as important as ever to clearly communicate
-vital U.S. interests which must be accommodated if the
Conference is to be successful. Few things would be
More damaging than a failure of other nations to
accurately perceive vital U.S. interests and the U.S.
determination to protect those interests.
13. The Territorial Sea
It is widely accepted that a Law of the Sea Treaty
would include agreement on a twelve-mile maximum limit
for the territorial sea, assuming agreement on other issues
such as straits and coastal state resource jurisdiction.
The U.S. objective is assuring agreement on the minimum
possible breadth of the territorial sea. It is our assess-
ment that agreement on a figure less than twelve miles is
not possible.
The U.S. is opposed to reopening the regime of the
Lerritorial sea, including innocent passage, outside
;traits as defined in the 1958 Convention. There are a
variety of ways of dealing with this issue, including
general language, incorporation by reference of the 1958
Convention and international law to the extent not
inconsistent with the new Treaty, or express inclusion
of the 1958 Convention language.
If a negotiation does occur on the question, we
should work for a more favorable innocent passage regime.
in essence this consists of retaining as much as
possible of the operational flexibility we enjoy under
the present formulation, while at the same time restrict-
ing the opportunities for unfounded allegations of "non-
innocence" by coastal states. Negotiations leading
toward an "objectivized" innocent passage regime carry
serious risks that the U.S. may be outvoted on politi-
cally motivated restrictions. Any list of prohibited
activities suggested for a new innocent passage regime
would be subject to review and approval by the interested
agencies including consultations in Washington as necessary.
C. Straits
The straits neqotiation is an unusually sensitive
one that requires careful control both within the U.S.
Delegation and'in our negotiations with other delegations.
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In addition to the general guidance on conduct of negoti-
ations, the contents of this section of the paper will not,
directly or indirectly, be discussed outside the Executive
Branch, irrespective of security clearance, except as
specifically directed by the Chairman of the Delegation
or the Chairman of the Task Force in consultation with
the senior representatives of the agencies concerned.
Our major opponents on straits are Spain,.Egypt and
other Arab States, Malaysia, Indonesia, the Philippines,
and Tanzania. They are all supporting some type of
regime described as innocent passage, but in many respects
even more restrictive than the 1958 Convention on the
Territorial Sea and the Contiguous Zone. While arguing the
need for navigation safety and pollution control, and its fear
of nuclear weapons, Spain appears to be seeking unrelated con-
cessions such as NATO and EEC membership or British concession
on Gibraltar. Egypt and the Arab States seem principally
concerned with the Strait of Tiran, although there is
some evidence of Egyptian concern over U.S. military use of
Bab-al-Mandab or Gibraltar, and some indication that this
opposition may have been politically related to the U.S.
support for Israel. Malaysia is concerned about pollution
in the Malacca Strait, but also desires notice for warship
transit. Indonesia and the Philippines are principally
concerned with the archipelago issue. Tanzania says its
opposition is a matter of principle although it may also
be concerned to some extent with its two straits in the
Pemba and Zanzibar passages. There is active cooperation
among many of these states on the straits issue.
We continue to believe that, as already authorized,
we should work with states having straits interests
similar to our own with a view to forming a broader
common front. Accordingly the following general recom-
mendation is made.
Recommendation
The U.S. Delegation should be authorized, on specific
approval of the Chairman of the Delegation in consultation
with the Chairman of the Task Force and the senior repre-
sentatives of the agencies concerned, to indicate privately
to the delegations of other countries having interests
and objectives similar to those of the United States a
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willingness to negotiate with them draft treaty acticles
which would be mutually acceptable on straits transit.
Any specific draft treaty language formulated in this
manner would be subject to expeditious review and
approval in Washington prior to public or private
support.
With respect to specific substantive issues, two
separate types of problems are involved. First, the
question of which straits must ultimately remain
covered by a regime more liberal than innocent passage.
Second, the nature of the regime.
(1) Which straits are covered?
The current U.S. proposal applies a free transit
regime to all straits used for international navigation
between one part of the high seas and another part of
the high seas or the territorial sea of a foreign state.
It is exactly the same "definition" as appears in the
1958 Territorial Sea Convention article that prohibits the
suspension of innocent passage.
As a matter of substance, the current or anticipated
U.S. interest in every strait is not the same; indeed it is
impossible to predict the relative importance of a given
strait in the future. For example, Gibraltar is of
obviously vital importance while Messina (between Sicily
and the Italian mainland) is of lesser importance. Some
of the factors that affect the present and known future
relative importance are: nature and extent of antici-
pated U.S. use (insofar as this can be predicted); avail-
ability of a secure alternative route; cost of using
an alternative route or ensuring favorable coastal state
behavior; and tactical and strategic considerations from
possible loss of use. While the U.S. might improve its
ability to achieve its straits objectives if the applica-
bility of the article were narrowed, the risk is that of
encouraging everyone to seek special treatment.
Several countries have submitted straits transit
proposals which exclude certain straits based upon
specified criteria or combinations thereof. These propo-
sals have obviously been advanced in efforts to obtain
an exclusion for straits of particular concern to the
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countries advancing them or to enlist general support
for the concept of unimpeded transit through and over
international straits.
While it is unclear what sort of exclusion formula
is negotiable, the greatest advantages of using such
an approach,-and the greatest risks, are tactical. At
present, there is an increasing tendency by some develop-
ing countries to seek a compromise in terms of the
substance of a straits regime. The U.S. strategy is to
isolate our principal opponents, particularly Spain, and
to neutralize our LDC opponents such as Indonesia by
attempting to resolve issues more important to them.
The attempt to isolate Spain is based on our underlying
assumption that we could not write a straits article at
this time acceptable to both Spain and the United States.
An exclusion approach offers the possibility of furthering
that strategy with some countries while unifying support
among countries having maritime interests similar to
ours. On the other hand, discussion of exclusions can
get out of hand, and must be dealt with very carefully.
Accordingly, we believe such discussion should take place
only when it is determined, by the Chairman of the Dele-
gation in consultation with the Chairman of the Task Force
and the senior representatives of the agencies concerned,
that it would be advantageous to the?.achievement of our
overall straits objectives.
The U.S. would, of course, want unimpeded transit in the
territorial waters of straits wider than twenty-four
miles to'the extent that the high seas route in the
strait is not equally suitable.
West Germany has a unique problem regarding the
entrance to the Baltic from West German ports near the
GDR border. We will work with West Germany to ensure
the route in question through GDR waters is interpreted
to be a strait, but will avoid highlighting the issue
during the negotiations.
The types of exclusions discussed below to some
extent cover the same straits, (e.g. the Strait of Tiran
is covered by two of the formulas). The discussion below
accordingly refers to the precise situations in which
authority regarding exclusions is authorized; the choice
of formulas will be made within the scope of that authority
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on the basis of the tactical situation. The regime of
nonsuspendable innocent passage would apply in excluded
straits. However, in accordance with authority set out
in the marine pollution section, coastal states could
not prescribe or enforce construction standards for
vessel pollution control in any strait including those
covered by these exclusions.
a) Exception for straits that are narrower
than 6 miles or that do not connect two
parts of the high seas.
An exception for straits 6 miles wide or narrower
involves no change trom the current U.S. juridical position,
and is acceptable if the current rule of nonsuspendable
innocent passage continues to apply. Moreover, such an
exception could gain complete support from those straits
states (e.g., Italy) which have indicated concern for
their particular straits. Additionally, it might resolve
the Greek concerns stemming from the treatment of all
their waters as being subject to unimpeded transit.
The USSR'straits proposal applies only to straits
connecting two parts of the high seas, thus excluding
the Strait of Tiran, the mouth of the Gulf of Fonseca
(often considered "historic"), and the entrance to the
Gulf of Honduras. The most politically significant of
these, of course, is Tiran, which would also be excluded
under a 6-mile exception. There is a basis in customary
law for making the distinction because there are
currently no high seas in Tiran in anyone's view. More
importantly, it offers the hope of reducing Arab opposi-
tion to free transit, since many Arab States themselves
have an interest in free transit of other straits.
Accordingly, we will continue to pursue means of excluding
Tiran from tree transit without prejudicing the applica-
tion of the current rule of nonsuspendable innocent passage
and in full coordination with our Middle East policy.
Recommendation
The U.S. Delegation should be authorized., on specific
approval of the Chairman of the Delegation in consulta-
tion with the Chairman of the Task Force and senior
representatives of the agencies concerned, to indicate
a willingness to accept certain specified modifications
of substance which do not affect the critical elements of
the U.S. straits proposals. Such indication should
initially be made privately to selected countries whose
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attitudes might be expected to be affected by such
modifications. Should the reactions of these countries
indicate that U.S. negotiating efforts with respect
to its straits objectives would be enhanced thereby,
the delegation should be authorized to support one or
both of the following modifications.
The present international law regime of non-
suspendable innocent passage, as codified in the 1958
Convention on the Territorial Sea and Contiguous Zone,
would be continued for passage through the territorial
sea in those international straits which are:
-- 6 miles wide or narrower, or
-- although wider than 6 miles, do not connect
two parts of the high seas.
b) Islands off the coast
The Italian proposal refers to an exclusion for
straits where a suitable alternative route is nearby,
although in the context of a six-mile exclusion. The
USSR, in its oral interventions, has implied a similar
exception regardless of the width of a strait by con-
sistently addressing itself to "major straits." The USSR
specifically referred to the straits off Tanzania,
caused by the existence of islands; in such cases there
are high seas routes on the other side of the islands
and accordingly the straits are not considered "major"
by the USSR. It is our assessment that the islands
situation may be responsible, at least in part, for
opposition to free transit from Tanzania as well as other
states such as Yugoslavia and the PRC, and for difficul-
ties with U.S. allies such as South Korea.
Recommendation
That the delegation be authorized, if the Chairman
of the Delegation in consultation with the Chairman of
the Task Force and the senior representatives of the
agencies concerned determines after appropriate explora-
tion that it would be advantageous to our straits
negotiating objectives, to indicate support for the
exclusion of straits formed by islands within 24
miles of the coast of the same state where, and only to
the extent that, a nearby and equally suitable high seas
route is available on the seaward side of the islands.
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As with other exclusions, nonsuspendable innocent
passage would continue to apply in the excluded straits.
Because of ice and dangerous navigation conditions, the
high seas routes to the north of certain Soviet offshore
Arctic islands within 24 miles of the coast are not
equally suitable. This exclusion would be drafted to ensure
that such Soviet Arctic straits are not excluded and that
our freedoms of the high seas and right of free transit
in the Arctic north of the USSR are not affected. However,
we will handle the Soviet issue quietly, as the USSR does
not admit that the straits in question are "used for
international navigation", or that there are high seas
in the Arctic; accordingly, the USSR itself is unlikely
to discuss the exclusion in the context of the Arctic
because any such discussion would prejudice its Arctic
sector position. Moreover, in connection with any such
exclusion, at the appropriate time we would create a
record regarding the straits covered by the exclusion.
(2) Substance of the regime in straits
The U.S. has proposed that vessels and aircraft,
in transit through and over international straits, enjoy
the same freedom of navigation and overflight, for the
purpose of transit, as they enjoy on the high seas. In
all other respects, the status of the waters would be
territorial and under the sovereignty of the coastal
state. Our support for including all vessels and air-
craft, military and commercial, in a straits transit regime
continues unchanged.
The U.S. Delegation should continue to insist on
retention of the critical elements of the transit right
required in straits (except to the extent the authority
to exclude certain straits is exercised). These critical
elements include unimpeded transit through and over
international straits by surface vessels (including war-
ships and tankers), submerged and surfaced submarines,
and military aircraft without a requirement for notification
to, or authorization from, the coastal state.
As a matter of substance, most states have at least
commercial interests in free transit of straits similar
to our own. On the other hand, developing countries are
fearful of dissipating their negotiating strength by
dividing among themselves, and thus may be unduly influenced
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by our opponents such as Indonesia and Malaysia. For
our part, we must continue,to make it clear that we
cannot be expected to become a party to a treaty that
does not accommodate our straits objectives; we must
persuade the majority that the substance of our position
is reasonable, and that we have negotiated in good faith;
we must try to accommodate the needs of as many straits
states as possible; and we must build as wide support as
possible for the essential elements of our proposals.
Recommendations
The U.S. Delegation should continue to emphasize the
critical elements of the U.S. straits transit proposals
while, at the same time, playing down and discouraging
use of the term "free transit". These elements of the
U.S. proposals must continue to be presented as essential
objectives of the United States but not necessarily in
the specific formulation of the U.S. draft straits
article.
Consistent with the above recommendation and those
relating to which straits are covered, the U.S. Delegation
should be prepared, on specific approval of the Chairman
of the Delegation in consultation with the Chairman of the
Task Force and senior representatives of agencies con-
cerned, to negotiate privately with other countries draft
treaty articles on straits transit which would be mutually
acceptable. Any specific draft treaty language formulated
in this manner would be subject to review and approval
in Washington prior to public or private support.
The recommendations shall be carried out in accordance
with the following instructions on specific items.
(a)
Submarines
Our assessment is that most of the opposition to
submerged transit is psychological and political. However,
some straits are very shallow, and would be hazardous for
submerged navigation, raising the danger of collision
between a submerged submarine and a surface vessel. We
have, of course, pointed out that it is hardly in the
interests of a commander of a submerged submarine to risk
collision.
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Since the question of shallowness has only been
raised regarding the Danish straits and the Malacca
Straits, we believe the best way to handle the issue
if it continues to be a problem is to give private
assurances to states bordering those straits that we
do not and will not navigate submerged there because it
is clear that this cannot be done safely, and if neces-
sary and appropriate, we will suggest to the Soviets and
certain U.S. allies that they give similar private
assurances.
A further objection to submerged transit relates to
the coastal state's desire to know of submerged transit
by a submarine and its identity. This question has been
pressed by Indonesia in connection with archipelagic
waters, and will be addressed in that context.
(b) The problem of coastal state security
The U.S.-proposed articles have no provisions dealing
with coastal state security. The straits states deal
with this problem by the use of "innocent passage."
The problem with the requirement that passage be innocent
is not that of substantive compliance by the flag state
but rather that the coastal state may claim the right to
arbitrarily stop passage-on the grounds that it is not
innocent, or can adopt regulations designed to ensure
innocence. The original International Law Commission
draft for the 1958 Conference provided a more objective
test, namely that passage is innocent so long as the
ship does not use the territorial sea to commit acts
prejudicial to the peace, good order, or security of the
coastal state. The U.S.--concerned about Soviet activi-
ties off its coast--supported the change in 1958 to the
more subjective criterion that passage is innocent so
long as it is not prejudicial. to the peace, good order,
or security of the coastal state.
The Soviet approach, publicly introduced, and
supported by the UK in a privately circulated proposal,
is to place obligations on the flag state to avoid speci-
fic actions--such as conducting maneuvers, launching air-
craft, etc. Thus, while the coastal state has recourse
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against the flag state, the vessel's right of transit
itself is not subject to interference. We believe the
concept of general flag state obligations is helpful,
but that the Soviet approach of a detailed list of
prohibited activities raises serious negotiating dangers,
(e.g. regarding attempts to add nuclear weapons or other
unacceptable limitations to the prohibitions). We are
working with the USSR and the UK to develop a mutually
acceptable straits article, for which we intend to seek
NATO, EEC, and other support, in which the concept of
general flag state obligations is the key element.
Conceptually, most if not all of the concerns regard-
ing "innocence" relate to actions that are not in fact
"transit." The U.S.-proposed right applies to vessels
and aircraft "in transit-for the purposes of transit."
We have made it clear that we are only seeking a transit
right, not a right to conduct any other activities. A
reasonable interpretation of our article and our own
statements in fact prohibits most if not all of the
activities on the Soviet list. Since we in fact have
explained our article as if the transit right exists
"only" for the purposes of transit, we should be able to
accept flag state obligations at least generally.
Another step would be to meet psychological concerns
regarding security by a reference to the UN Charter.
Since UN Charter obligations apply irrespective of what
a Law of the Sea Treaty may say, this approach involves no
new legal obligations on our part. Several formulas are
possible. (None of these formulas would affect the right
of individual and collective self-defense under the
Charter.)
(c) Regulation
i) Safety of navigation
There is enormous, and constantly increasing traffic
through the major straits of the world. As a major mari-
time nation, the US has as much of an interest in ensuring
traffic safety as do the states bordering straits.
Because of the dramatically increasing volume of
shipping, and the size of ships, there have been increased
international efforts to regulate traffic in heavily used
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sealanes, including straits. IMCO has established traffic
separation schemes, which we have already proposed be
made mandatory by the LOS treaty. As traffic increases,
more sophisticated vessel traffic control systems in
straits analogous to air traffic control systems may
become necessary, and are already being discussed. The
fact that a ship captain does not desire a collision does
not obviate the need for rules and traffic control in a
strait any more than it does on a highway or in the air.
The key questions are: What additional regulations
beyond those already existing are necessary and desirable,
and who should make them?
From the U.S. perspective, we are far better off if
regulations are made internationally. This permits us to
participate in making them, and reduces the chances for
coastal state arbitrariness (even assuming a prohibition
on discrimination in form or in fact by the coastal state).
It also permits us to obtain necessary warship exemptions
in the regulations themselves, rather than seeking a
blanket exemption which would be difficult to negotiate.
Straits states, particularly Malaysia and Indonesia,
are strongly pressing for coastal state regulation. The
reasons are partly political (regulatory powers are
inherent in "sovereignty" in the territorial sea) and
partly substantive: the international process can be
slow and difficult, and may not in their view adequately
protect coastal state interests.
The UK--itself both a maritime and straits state--
suggested an interesting solution in the safety and
pollution context largely designed to meet the political
problem. Stated generally, the idea is that straits
states would implement the international regulations. This
idea might be elaborated in terms of a coastal state right
and duty. The proposal would be that a vessel traffic
control system for an international strait could be
designed by the coastal states, in consultation with major
user states, and-then submitted to the Inter-Governmental
Maritime Consultative Organization (IMCO) for approval.
The coastal states would then have the right and obligation
to implement the system if approved by IMCO. The major
user states would be obligated, if requested by the
coastal states, to agree with the coastal states on an
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equitable method of joint financing for the IMCO approved
system, preferably in line with general cost-sharing
guidelines provided by IMCO. The costs would include
buoys, lights, other navigational aids, dredging, etc.
This approach would have the distinct advantage of placing
the financing obligation on the flag state rather than on
individual vessels, thus undercutting a still nascent
and undesirable trend toward the idea of individual
vessel tolls "for services" in straits, an idea that
unfortunately is not completely without precedent in
ports and the territorial sea. It also gives us and
other users a strong basis for involvement in the design,
development, and implementation of any coastal state
system. There is precedent for such arrangements in the
case of the Red Sea lights north of Bab-al-Mandab which
are administered by the UK through a fund constituted by
several user states; we and Japan favor an international
cost-sharing system for Malacca. Of course, as a practical
matter, the coastal state would have a major role in
implementing any vessel traffic control system in any
event.
Some developing straits states, and perhaps more
importantly developing countries generally, should regard
the proposal as quite forthcoming. Indonesia, one of the
most sophisticated straits states, could be expected to
discern our real objective of participation in control,
and accordingly object. It is possible that the develop-
ment implications for Lombok and Sunda straits might
soften the Indonesian position somewhat. Finally, and by
no means least importantly, because this approach parallels
the Japanese strategy in the Malacca Straits, and appears
forthcoming to the developing.countri.es, it would be helpful
in bringing Japan into a more active role of support of
our straits position than has thus far been the case.
Recommendation
We recommend that the Chairman of the Dele-
gation, in consultation with the Chairman of the Task
Force and senior representatives of the agencies con-
cerned, be authorized to support a system whereby the
coastal state could design a surface traffic control
system for international straits which should be imple-
mented only after approval by IMCO, and that, further,
major user States would be obligated to agree with straits
states on an equitable method of joint financing for such
systems.
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ii) Pollution
The U.S. is in a difficult negotiating situation
on pollution regulations in straits. The underlying basis
for our straits proposal is that the high seas between 3
and 12 miles from the coast would be eliminated. However,
the U.S. currently asserts pollution control jurisdiction
over ships to the 12-mile limit of our contiguous zone.
Thus, our own legislation could be cited as the precedent
for coastal state pollution regulation in precisely those
straits where we are seeking free transit.
Nevertheless, consistent with the purposes of free
transit, we believe we are justified in seeking the same
regime for vessel-source pollution in the territorial sea
in straits as on the high seas adjacent to the territorial
sea. As a practical matter, it is useless to seek lesser
coastal state rights in straits than the coastal state
enjoys in the high seas areas beyond. Accordingly, our
position on coastal state rights with respect to pollution
control in straits will be the same as that approved for
high seas areas adjacent to a 12-mile territorial sea.
Both the standards and enforcement aspects of this matter
are addressed in a subsequent section of this paper.
(d) Overflight
Historically, vessels have had an international legal
right to pass through the territorial sea without coastal
state consent, and this right cannot be suspended in straits.
overflight of the territorial sea, however, requires consent.
Thus, while states claiming more than a 3-mile territorial
sea can regard the negotiation on vessels as one of defining
the parameters of a right unquestioned in principle, they
are less likely to regard the overflight negotiation in the
same way. The U.S. has based its overflight rights on high
seas rights in areas beyond three miles. However, the USSR,
and possibly France, assert historic rights to transit
certain straits. (It is unclear whether France applies this
to aircraft.) The U.S. has not opposed this assertion and
it may be advantageous for us to begin to espouse this
concept as well.
Our straits overflight problem relates mainly to
military overflight. Much of the concern regarding aircraft
may be psychological, perhaps because they are capable of
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penetrating the air space over land at high speeds. Some
of our opponents have pointed out that the U.S. itself has
established an Air Defense Identification Zone extending far
out to sea in which all civil aircraft flying toward the U.S.
must identify themselves, although the establishment of entry
conditions is lawful under the Convention on International
Civil Aviation.
It is argued that the chances of an accident affecting
the coastal state increase as the aircraft gets closer to
land. Our straits proposal applies to civil aircraft as well
as military aircraft, and requires that civil aircraft respect
ICAO standards. However, under the U.S. proposal, state
(including military) aircraft, to which ICAO standards are not
applicable, will normally respect those standards while in
transit and will, at all times, operate with due regard for
the safety of navigation of civil aircraft. (The "due regard"
obligation is included in the ICAO Convention, to which the
U.S. is a party.) A state would be strictly liable for
damages caused by failure of its state (including military)
aircraft to abide by the regulations.
A major concern and overflight problem is access to
the Mediterranean through the Strait of Gibraltar. Under
certain circumstances, such as the resupply of Israel, nuclear
overflights, and other flights which require secrecy, routes
over land are not available. During the recent Middle East
War, Spain denied us overflight of its territory and also
sent us a note questioning our overflight of the Strait of
Gilbraltar.
The U.S. has a fundamental security interest in
maintaining its ability to overfly a number of other straits,
and the maintenance of secrecy of overflight may in some
instances be an essential ingredient of the U.S. operational
objectives. In such instances, the filing of routine flight
plans, initiation of communications with air traffic control,
position reporting, and restrictions on altitude, speed,
cargo, and similar matters would be tantamount to a degree
of control which could delay or interfere with the military
objective and defeat the requirement for secrecy.
On the other hand, a basic aspect of air traffic control
is communications with ground controllers. The Soviet (and
private UK) straits articles provide for on-the-spot radio
communications with the ground. They do not call for advance
notification, such as the usual filing of a flight plan.
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We are very reluctant to agree to a communications
requirement for state aircraft because of the problem of
secret overflights. Secrecy is not a basic part of the
normal operations of most military flights which--in the
vicinity of a strait--could be picked up on radar. A
majority of operational overflight needs do not require
secrecy, although sensitive operations do, and indeed
military aircraft usually comply fully with air traffic
control regulations. Since we believe overflight rights
are probably not attainable without additional accommodation
on air traffic safety issues, we should at the appropriate
time be prepared to accept a requirement of monitoring
certain published frequencies for the purpose of receiving
ground communications on safety matters.
Recommendation
If the Chairman of the Delegation, in consultation with
the Chairman of the Task Force and senior representatives of
the agencies concerned, determines that further substantive
flexibility is needed, the Delegation is authorized to accept
a duty for state aircraft to respond while in the strait to
ground communications from the appropriate international air
traffic controller on applicable international frequencies
for the purpose of verifying course, speed and altitude.
Information regarding origin or destination outside
the strait is not necessary for safety purposes in the strait
and would not be required under this approach. Moreover, the
right of transit is completely independent of any obligation
for communication. There is no obligation to obey air traffic
control instructions, nor is there any change in our instruc-
tions regarding air traffic safety, including the duty to
operate with due regard for the safety of navigation of civil
aircraft. In the unusual case where secrecy or radio silence
is necessary, we may in some instances be able to justify
this on grounds of reasonable self-defense precautions.
(e) Liabilit1
The underlying U.S. approach to traffic safety and
pollution in straits is that it is preferable to be liable
to the coastal state for damage caused by an accident during
transit than to give the coastal state broad regulatory
authority, or to accept too many international restrictions
regarding traffic safety, pollution, and similar matters.
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We have already proposed strict liability with respect to
damages resulting from failure to adhere to IMCO traffic
separation schemes and ICAO air traffic regulations. If
liability is only incurred when a regulation is violated,
we are to some extent encouraging more regulation than may
be necessary. Moreover, there is no reason why the coastal
state should bear any burden regarding damage it suffers
from activities which--in a fundamental sense--it cannot
and should not control. If two or more vessels or aircraft
are involved, damages could be apportioned between them.
We should, however, be careful that forthcoming liability
provisions are tactically sound in attracting more coastal
state support without losing maritime state support.
i) State aircraft and government non-commercial
shiers (Including warships
The flag State is of course already liable for
damages caused by government non-commercial vessels and
state aircraft. Moreover, for political and security
reasons, we have consistently taken a liberal approach on
this matter when an accident occurs. Futhermore, these
vessels and aircraft enjoy immunity from coastal state
arrest, and we do not want them to be subject to certain
regulations (e.g., pollution). Accordingly, the assumption
of strict liability is unlikely in practice to make a
significant difference, and could significantly enhance our
negotiation posture. It will also provide us with a strong
argument that the remedy against our public vessels and
state aircraft for violating the regulations is flag state
liability in the event of damage, not coastal state inter-
ference with transit.
Recommendation
That we be authorized to support liability up to and
including a rule that the flag state be subject to strict
liability for personal injury or property damage to the
coastal state or its inhabitants caused by an act of or
accident involving a vessel or aircraft entitled to
sovereign immunity under international law while exer-
cising the right of transit in the strait.
ii) Commercial vessels and aircraft
Although the fear of supertankers is substantial,
the problem is not as great because commercial vessels
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and aircraft, and their owners and operators, are subject
to suit in national courts. Moreover, liability for pollution
damage from oil tankers--the greatest concern--is already the
subject of international agreements. Nevertheless, it could
be helpful to deal with this problem in a straits article.
Since several developing countries have large or growing
fleets, we do not believe the negotiation of this issue is
likely to have very substantial risk; accordingly the U.S.
can afford to appear forthcoming. In any case, many
petroleum companies have established one-tanker corporations
intended to limit the possible amount of liability. In fact,
in both the commercial navigation and civil aviation fields,
the U.S. has been far in advance of others on this question.
Recommendations
1) That we be authorized to support,. if necessary,
liability of the owner or operator up to and including a rule
that the owner or operator of a commercial vessel or aircraft
is subject to strict liability (liability as circumscribed
in Article III in the 1969 Convention on Civil Liability
for Oil Pollution Damage) for personal injury or property
damage to the coastal state or its inhabitants caused by
an act of or accident involving the vessel or aircraft
while exercising the right of transit in the strait.
2) That we be authorized to support flag state
responsibility to require that its flag vessels have insurance
or other financial security to ensure their financial responsi-
bility in accordance with generally accepted international
standards.
We will consult in advance with U.S. industry and the
maritime countries before taking a public stand on these
questions.
As in pollution questions, we should also provide for
quick release of non-military vessels under a bonding
procedure.
iii) Coastal state liability
In addition to quick release and bonding require-
ments, other protection should be provided against possible
arbitrary coastal state action. Consequently, we should
propose, in conjunction with coastal state rights in straits,
that the coastal state be liable for violations of the
treaty, including unreasonable actions taken in implement-
ation of its treaty rights.
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D. ARCHIPELAGOS
Archipelago claimants have become a complicating factor
in the negotiations disproportionate to their number or world
power base. They have formed a coalition with hardline straits
states (although the issues are disparate) and have obtained
support on an ideological basis from blocs such as the OAU,
even though most of the supporters have no real parallel in-
terests. The archipelago issue is interfering with progress
in other areas of the negotiations to the extent that the other
members of the Group of 5 are strongly urging us to take steps
to resolve the issue. Efforts of members of that group have
been less than helpful. The U.K. has tabled archipelago
articles, and the USSR has made statements sympathetic to the
claimants. We believe that our ability to prevent this issue
from furter disrupting our ability to achieve our overall
objectives will be in large measure determined by the percep-
tion of archipelago supporters of the reasonableness of our
efforts to reach an accommodation.
(1) The problem of an accommodation.
a. The claimants. Archipelago claims have been
presented in the Seabeds Committee by Indonesia, the Phili-
ppines, Fiji, and Mauritius. The Bahamas and our own
Trust Territory are also seeking archipelago status.
The resource interests of these claimants could be
effectively satisfied by whatever economic zone is
finally developed by the Conference, and at least some
of the claimants might be content with merely a resource
regime. The Philippines and Indonesia, however,have a
political interest in achieving recognition of a "concept,"
and both have perceived security interests in achieving
control of navigation. They seek this control purportedly
because of the threat of infiltration and subversion.
Thus, any proposed solution must address these political
and security considerations.
b. Risks. A major difficulty from the U.S. per-
spective is that any conceivable accommodation which
would satisfy the major claimants would require us to
relinquish the right of many high seas navigational and
other uses. As a practical matter, this means that we
would lose the right to conduct operations in the areas
which would become archipelagic waters. This is not
merely a loss of space to conduct training exercises. At
best, it creates vast areas which would be "off limits"
to us which would be available havens for submarines of
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the USSR or any other power which might clandestinely
violate the treaty. A worse result is the potential for
agreement between an archipelago state and a power un-
friendly to us for the use of such waters for tactical
or strategic purposes. In addition, we would almost
certainly lose the right to conduct scientific research
in archipelagic waters. Finally, efforts to negotiate
on the issue carry some risk of rendering us vulnerable
to weakening our juridical position on high seas and
straits issues in general. Also, we should take care
to insulate any discussion of the pollution regime in
archipelagos from the general pollution negotiations.
(2) Possibilities for accommodation
If we can remove or minimize the exacerbation of the
archipelago controversy from the negotiations, and at the
same time advance our efforts towards achieving our straits
and other navigational objectives, both for military and
commercial vessels and aircraft, we can accept a certain
amount of the risks involved. On balance, we believe it is
in our interests to intensify our exploratory efforts to
determine whether or not it is possible to reach a solution
which will be acceptable to the claimants, while preserving
a sufficient quantum. of usage rights for military and com-
mercial vessels (including tankers) and aircraft to meet
our minimum requirements. We view Indonesia as the key to
any possible solution, and would initially concentrate our
efforts there. At the same time we recognize that no
accommodation may be possible with the Philippines, regard-
less of the outcome of our efforts with Indonesia.
Recommendation
That the delegation intensify exploratory efforts to
determine whether a solution embodying the following points
is possible:
(1) An archipelago concept could be applied only
by island states; not by states with both island and
continental territory.
(2) Lines designed to delimit the area of
"archipelagic waters" could be drawn from land point
to land point. These lines may be called "archipelagic
construction lines," or some term other than "baselines."
Length of archipelagic construction lines may not exceed
90 (fallback to 120) miles.
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(3) All waters enclosed by archipelagic construc-
tion lines would be "archipelagic waters." These waters
are not, nor are they analogous to, internal waters,
territorial sea, or economic zone. They are sui generis
--unique.
.(4) The maximum permissible ratio of water to land
is 5:1. Waters in bays, reefs, rivers, atolls would be
counted as land for determining the ratio.
(5) The archipelagic state would have exclusive
jurisdiction over activities within the archipelagic
waters other than overflight and navigation (navigation
includes vessel-source pollution).
(6) The territorial sea--outside archipelagic
construction lines--would be measured only from land and
any applicable baselines other than archipelagic construc-
tion lines.
(7) We would prefer that any coastal zone beyond
the territorial sea (e.g., an economic zone) agreed to
in the Treaty--outside archipelagic construction lines
--be measured from the same land or baselines along it
from which the territorial sea is measured. This may,
however, cause a shelf boundary delimitation problem
for Indonesia. Accordingly, we would accept measurement
of the economic zone outward from the construction lines.
(8) The navigational and overflight. right to be
confirmed in this part of the LOS Treaty is the right
to transit the archipelago. (A term different from
that.used in connection with straits would be used to
avoid confusion between the two concepts--e.g.,
archipelagic passage).
(9) Transiting vessels and aircraft shall utilize
a route through or over archipelagic waters which
reasonably conforms to their destination outside the
archipelago.
(10) Transit shall be accomplished without
unreasonable delay. All vessels and aircraft in transit,
however, may take such measures as are normal for their
safety and self-defense.
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(11) While we would prefer the archipelagic transit
right to apply to the entire transit, we could accept
the treaty regime agreed for international straits for
the straits portion of the transit provided that the
regime shall apply whether the straits lead to high seas,
territorial seas, or archipelagic waters.
(12) Vessels and aircraft entitled to sovereign
immunity would be exempt from pollution standards and
enforcement whether international or coastal. The
archipelago state could not establish or enforce vessel
construction standards. The archipelago state could
establish and enforce discharge and dumping standards
including international standards in archipelagic
waters, provided discrimination between ships of different
nationalities (including ships of the archipelago state),
and standards that have the practical effect of denying
passage, are prohibited.
(13) The obligations of the transiting vessels
and aircraft, and the archipelagic state, are mutual
and reciprocal. Whereas the vessels and aircraft
will transit without unreasonable delay, so too the
archipelagic state shall not hamper the passage.
(14) There will be no notification of transit.
(15) Any willingness on our part to reach and
support this accommodation is contingent on receiving
active support for our straits and other navigational
objectives from Indonesia both before and during the
LOS Conference. Our ultimate acceptance of the concept
will, of course, be contingent upon the coming into force
of a LOS Treaty acceptable to us.
(16) Our preferred position is that the passage
or transit area should not be limited further than as
specified in the foregoing points, and we will attempt
to obtain that result. If, however, it is necessary
to accept some type of additional restriction on the
passage area to achieve an overall resolution of the
archipelago issue, we could accept a passage area (which
might ultimately be called a corridor if tactically
advantageous) conforming to the sinuosity of the land
areas, provided that the passage area is not restricted
to less than 75% of the area between the nearest points
of land, or 100 miles, whichever is lesser, of the
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waters between main islands; i.e., not drying rocks or
shoals. Such transit areas must be constructed so as
to include the maximum amount of navigable waters avail-
able, including all normal shipping channels. Transit-
ing vessels and aircraft may depart from the passage
area for the purpose of safety of life, self-defense,
or as a result of force majeure, or in innocent passage
as in the regime of the territorial sea.
(3) Position in event of failure of accommodation
A fair possibility exists that it may not be possible
to reach an accommodation which will protect our minimum
interests. If we should reach a point in.our explorations
where such an outcome becomes apparent, it will be necessary
to adopt a different approach to protect our interests. We
believe, nevertheless, that our exploratory efforts will
have served a beneficial purpose in having demonstrated our
reasonableness in seeking a solution, which we can cite as
necessary in the negotiations.
Recommendation
Early in any exploratory discussions we will inform
the archipelago claimant or claimants that a failure to reach
a mutually satisfactory accommodation will require us to nego-
tiate in the-Conference in a manner designed to protect our
own interests; i.e., to seek to have no archipelago concept
at all in the Treaty, and in any event to refuse to accept
any archipelago concept that is inimical to our navigation
and security interests. We will make it clear that our offer
is nor necessarily a continuing one. In the case of Indonesia,
we may advise that the preservation of our juridical position
may involve a reconsideration of the informal notification
procedures which we have been following. Our position in the
ensuing Conference will be to isolate the claimants and
achieve a Treaty that is silent on the archipelago issue.
(4) Additional considerations
To the extent that acceptance of our offer of accom-
modation would create security or other practical problems
for Indonesia, we intend to explore potential practical means
for helping Indonesia to deal with those problems.
(5) The problem of cluster archipelagos
Our initial explorations will be limited to seeking
accommodation with those states who qualify as a single-unit
archipelago under the criteria set forth in this section.
Should our efforts prove fruitful, and should it further
appear that our overall interests (including the maintenance
of a limited definition of archipelagic waters) would be
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furthered by agreeing to accept extension of the concept to
archipelago claimants who would be divided into clusters by
its application, we will study the possible effects on our
interests and give a recommendation.
E. Coastal Resources and an Economic Zone
The large majority of coastal nations, including some
developed coastal nations, favor broad coastal state economic
jurisdiction over living and mineral resources beyond a 12-
mile territorial sea, extending at least 200 miles from shore.
The major issues are coastal state jurisdiction beyond 200
miles over continental margin seabed resources and coastal
and anadromous fisheries, an exception for highly migratory
species, limitations and standards governing the exercise of
coastal state jurisdiction, including protection of non-
resource uses, and compulsory dispute settlement procedures.
We can support coastal state jurisdiction over resources in
a 200-mile economic zone in the context of satisfactory
resolution of these major issues and an overall satisfactory
settlement.
A further issue of considerable importance concerns
the rules applicable to delimitation of areas of coastal
state juridiction between neighboring coastal states; this
is a complex and contentious bilateral issue for many
coastal states.
Moreover, although the issue arises largely in the
context of delimitation between neighboring coastal states,
questions have been raised as to whether small islands,
particularly if uninhabited, should be entitled to the same
broad economic jurisdiction (or even the same territorial
sea) as other areas. In this regard, some African states
have proposed excluding areas under foreign domination or
control from economic zone provisions.
1. Seabed resources of the continental margin
There is virtually no opposition to the idea that
coastal state jurisdiction over seabed resources of the
continental margin should be exclusive. The U.S. has a
direct interest in control of the seabed resources of its
continental margins. While the USSR has proposed a limit
of 100 miles from shore or 500 meters depth, whichever is further
seaward, most countries, including landlocked and shelf locked,
if their interests are accommodated, are prepared to support
the idea that this jurisdiction should extend no less than
200 miles from shore.
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Many Latin American countries, particularly those on
the east coast, as well as Canada, the UK, and New Zealand,
believe coastal state jurisdiction should extend beyond 200
miles to the edge of the continental margin. Australia and
the PRC also support this position, although at least with
respect to the PRC, the problem probably is perceived
essentially as one of bilateral delimitation with neighboring
coastal states.
The African states do not support coastal state juris-
diction beyond 200 miles, although Nigeria and possibly
others do not appear to have substantive objections to the
idea. Japan takes the same position as the African states,
largely because of bilateral delimitation problems with the
PRC. The landlocked and shelflocked countries--many of which
are African--tend to favor the African position.
The original U.S. proposal for a coastal state trustee-
ship zone specified a limit embracing the entire continental
margin. Since then, we have stated we could also accept an
alternative distance limit. Our new Coastal Seabed Economic
Area proposal does not specify a limit, but in introducing
the articles we noted that the majority favored at least
200 miles, and that a substantial number of states favored
including the continental margin beyond 200 miles. We went
on to urge an accommodation of the interests of those favoring
broader jurisdiction for the seabeds by providing for the
interests of others through such devices as revenue sharing.
In essence, the U.S. posture was one of seeking to facilitate
widespread agreement by accommodating the interests of both
sides in the context of coastal state jurisdiction over the
continental margin beyond 200 miles. We did not indicate a
direct U.S. interest in the substance of the issue.
The following information on geographical areas has
been compiled to assist in evaluating the positions that the
U.S. should take on the outer boundaries of the Coastal Seabed
Economic Area. Such alternatives assume at least a 200-mile
limit alone or in combination with an additional fixed depth,
whichever is further seaward.
Outer Limit
U.S.
Sq. Miles
% U.S. gains
going beyond
200 miles
U.S. absolute
gain in square
nautical miles
1.
200
mi.
2,222,000
--
--
2.
200
mi.
+200
meters
2,224,500
0.1%'
2,500
3.
200
mi.
+2500
meters
2,279,500
2.6%
57,600
4.
200
mi.
+4000
meters
2,608,500
7.4%
386,500*
*Two long 4000 meter, ridges that extend across oceans would
raise serious problems of deep seabed allocations: one from
the Azores to Guyana and another from Mexico to the Antarctic
via French Polynesia.
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Outer Limits
1. 200 mi.
2. 200 mi. +200 meters
3. 200 mi. +2500 meters
4. 200 mi. +4000 meters
U.S. % of area if
limit adopted world-
wide
9.0%
8.8%
6.5%
5.0%
Countries Involved
*
**
***
*Argentina, Canada, Australia, U.S. and USSR
"Argentina, Australia, Canada, U.S., USSR, Chile, Ecuador,
Iceland, India, Ireland, Madagascar, Mauritius, Norway, New
Zealand, Pakistan (?), South Africa, South West Africa and
United Kingdom
***Argentina, Australia, Canada, U.S., USSR, Chile, Ecuador,
Iceland, India, Ireland, Madagascar, Mauritius, Norway, New
Zealand, Pakistan, South Africa, South West Africa, United
Kingdom, Brazil, Costa Rica, El Salvador, France (Pacific),
Guatemala, Indonesia, Mexico, Portugal, Peru, Sri Lanka and
Tanzania
Outer Limits
1. 200 mi.
2. 200 mi. +200 meters
Distribution
of U.S. areas beyond 200 miles
Arctic Ocean 97%
Bering Sea 3%
3. 200 mi. +2500 meters Arctic Ocean 94.53%
Bering Sea 4.25%
Other 1.22%
4. 200 mi. +4000 meters Arctic Ocean 53.69%
Bering Sea 17.41%
Gulf of Alaska**** 8.90%
Pacific Northwest**** 19.02%
Atlantic .74%
Gulf of Mexico .02%
****Not highly prospective areas for hydrocarbons, since mostly
volcanic.
To the extent the U.S. interest in the continental margin
beyond 200 miles relates to Arctic areas off Alaska, it is un-
clear what the actual effect of any general limit (200 miles
or any other) will be in the Arctic. The reason for this is
that virtually all Arctic States (other than the U.S.) including
the USSR and Canada, either have claimed or would like to claim
all of the Arctic north of their coast to the North Pole under
a "sector principle." This Arctic issue has not been raised in
the LOS negotiations, and we strongly suspect that most Arctic
States will not regard any general maritime limits in an LOS
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Treaty--territorial sea or resource jurisdiction--as
precluding a sector claim in the Arctic. Accordingly,
most Arctic states are likely to oppose any express
attempt--before or after a Treaty is negotiated--to
regard any part of the Arctic seabed as international
seabed area. The U.S. is opposed to the sector theory
for navigational reasons, but could join other Arctic
states in an interpretation that extends resource
jurisdiction in the Arctic to the North Pole should the
need arise; if this were done, it would eliminate the
Arctic (where most possible U.S. areas with potential
deep water hydrocarbons may lie) as an incentive to the
U.S. seeking universal jurisdiction beyond 200 miles.
Most of the. deep water portions of the world's
continental margins have not been investigated in any
detail. Consequently we have very limited knowledge of
the mineral and hydrocarbon wealth of these areas.
Although estimates of the recoverable hydrocarbon
potential are very high,they are not precise and vary
widely. Detailed political, technological, and econo-
mic factors relevant to a policy analysis of what is
or is not in the overall interest of the U.S. for an
outer boundary for seabed resources are also not known.
We do know there is increasing commercial risk and an
increase in cost of extraction as water depth increases
which may be offset. by technological improvements and
the increasing economic gains of access to large hydro-
carbon reserves.
In spite of the tentative nature of the data, pre-
liminary estimates of the hydrocarbon potential and
value for various limits for U.S. beyond 200 miles based
on the information available at this time have been
prepared. Since the U.S. continental margin is believed
to be roughly representative of the world-wide configura-
tion, it is assumed that the figures developed for the
U.S. margin approximate the situation world-wide, although
neither the margin nor the resource are evenly distributed
among all coastal states.
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Outer Limit of
U.S. Margin ____
Estimate of
Added
Hydrocarbons
Estimate of
Added Oil
(Billions of
Barrels)
Estimate of
Added Gas
(Trillion
Cu. Ft.)
2. 200 miles +
200 meters
0.2%
.5
2.0
3. 200 miles +
2500 meters
3.0%
11.0
52.0
4. 200 miles +.
4000 meters
15.0%
55.0
250.0
Several comments are necessary on the 200 mile plus
4000 meter outer boundary. The bulk of potential hydro-
carbon resources are believed to be in the deeper reaches
of this area. However, all figures for this area are
particularly rough because of the limited amount of data
available. Secondly, volcanic areas aside, most possible
U.S. areas between 2500 and 4000 meters that may have
some hydrocarbon potential are located under thick ice in
the Arctic, although a significant portion lies in the
Bering Sea where year-round ice is not a problem. An
Arctic Sector Theory would encompass this region for the
U.S. and avoid the problem of possible claims to the
immense 4000 meter ridges that run across the South
Atlantic and South Pacific basins. Development of Arctic
hydrocarbons also raises unique environmental and operat-
ing problems that suggest that it would require a huge
discovery to overcome inherent impediments to exploitation.
Under existing law, coastal states have exclusive
rights to seabed resources out to the 200-meter water
depth and beyond that to adjacent areas that admit of
exploitation. Most boastal states now want to establish
a precise outer limit of 200 miles although a few
influential broad shelf states want jurisdiction beyond
200 miles to the edge of the continental margin. Most
landlocked and shelflocked states will probably recognize
a 200-mile limit in the Treaty and probably coastal state
control beyond if some revenue sharing provisions are
included in the Treaty. The precise modalities of the
accommodation would have to be worked out in the negoti-
ation.
There are costs and benefits to the U.S. from interna-
tional recognition in the Treaty of coastal state seabed
resource jurisdiction beyond 200 miles. The basic cost to
the U.S. will be the possible loss of access, or a sharp
increase in the cost of access (since we have no control
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of coastal state fees) to the potential continental margin
hydrocarbon resources beyond 200 miles off other nations.
We also have no control over concerted attempts by groups
of other nations to cut production or use resources for
political purposes. It is likely that U.S. companies
with their technological lead in deep water hydrocarbon
extraction would benefit the most from nondiscriminatory
access to deep water areas which may not be as likely if
the areas are under coastal state control rather than inter-
national control depending on the nature of the regime.
We also run a greater risk of coastal state interference
with scientific research, if coastal states control the
continental margins beyond 200 miles.
The basic benefit to the U.S. from coastal state
seabed resource jurisdiction beyond 200 miles is that the
U.S. would acquire undisputed control over 5% of the world's
continental margins if the outer limit were 4000 meters.
We would not run the risk of dealing with a possibly unpre-
dictable international arrangement and could deal with indivi-
dual countries or groups of countries on a basis with which
we have more experience. Also, we would be able to apply
our own high environmental standards to a large area directly
adjacent to the U.S. coast. Finally, it should,be easier to
achieve our objectives regarding ISRA if the deep seabed
regime does not cover areas of hydrocarbon potential.
The above factors and various costs and benefits lead
to several conclusions regarding the policies the U.S. should
adopt on the outer limit of the Coastal Seabed Economic Area.
First, the U.S. should not oppose coastal state jurisdiction
beyond 200 miles. The practicalities of the negotiation
are that an overall settlement will probably require an ac-
commodation with the strongly-held position of other broad
shelf states.
Second, even within 200 miles, the U.S. is not proposing
coastal state jurisdiction without accommodation of the interests
of landlocked, shelflocked, and other geographically
disadvantaged states through revenue sharing, or without
other international obligations of the coastal state.
Consistent with this position, we believe the U.S. should not
support coastal state jurisdiction over the continental
margin beyond 200 miles unless it is subject to at least
the same treaty limitations that apply within 200 miles.
The question, therefore, is the degree of coastal state
control over continental-margin resources beyond 200 miles.:
The balance of our economic interests on this matter is not
completely clear. We would like the resources to be avail-
able to U.S. producing interests and consumers. However,
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the effect of exclusive coastal state jurisdiction off our
own coast is to prevent access for our companies off foreign
coasts without foreign state consent. A uniform 200-mile
limit would cover over one-third of the world's ocean floor
and while the U.S. gets more area with 200 miles than any
other state, beyond 200 miles a number of states have considerably
broader and shallower continental margins off their coasts
than we do.
Australian and Canadian representatives urged us in
December to avoid taking a position on this issue, while
relying on our global interests in widespread agreement
as the basis for encouraging a "favorable" compromise.
Tactically, the issue is a delicate one. Under certain
circumstances discussion of U.S. substantive interests
in jurisdiction over the margin beyond 200 miles could
stimulate support for limiting jurisdiction to 200 miles.
Accordingly, while negotiating privately on the issue, we
believe we should generally indicate our interest in seeing
relevant interests accommodated (playing an honest broker role)
and should not (except as directed by the Chairman of the
Delegation in consultation with the Chairman of the Task
Force and senior representatives of the agencies concerned)
discuss the U.S. interest in its continental margin beyond
200 miles with the public or foreign representatives. We
will simultaneously explain privately to interested members
of Congress why evidence of domestic insistence on the
issue could be counter-productive.
Pending resolution of the issue, we will not take any
position inconsistent with the adoption of an Arctic Sector
resource solution to protect our potential interest in
acquiring control over Arctic continental margin regions
beyond 200 miles with hydrocarbon possibilities.
As indicated in earlier instructions, a precise limit
of coastal state jurisdiction over the continental margin
beyond 200 miles will have to be established to define any
such jurisdiction. The U.S. proposal to use a gradient
figure was widely regarded as too complex. While not entirely
accurate in a geological sense, a depth-of-water figure is likely
to be the simplest to negotiate and to find. The NSC
Interagency Task Force will study this issue with a view
to arriving before Caracas at a precise limit that maximizes
the hydrocarbon and mineral resource potential off our coast
without extending unreasonably far elsewhere.
RECOMMENDATION
(1) The U.S. delegation should not oppose proponents
of a 200 mile limit, proponents of a margin limit beyond 200
miles or proponents of an intermediate zone beyond 200 miles,
but should seek to establish a tactical role of honest
broker on the issue.
(2) The US delegation should take no position inconsis-
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39
tent with coastal state jurisdiction over Arctic seabed
resources extending to the North Pole under a sector
approach limited to resource jurisdiction.
(3) Precise figures for defining any continental margin
limits beyond 200 miles will be developed before Caracas.
With respect to the substance of coastal state seabed
jurisdiction beyond the territorial sea, our view is that the
coastal state rights under the Treaty should be limited to
exclusive jurisdiction over exploration and exploitation of
seabed resources, deep drilling for any purpose, and
off-
shore installations affecting its economic interests
(e.g.,
superports). Other activities would be governed by high
seas principles. Scientific research is specifically dealt
with later in the paper.
The international limitations on coastal state behavior
that we have proposed in our Coastal Seabed Economic Area
Articles would continue to be supported, as would compulsory
dispute settlement:
(1) In order to assure an adequate accommodation of uses,
and to prevent resource jurisdiction being used as a basis
for unjustifiably interfering with navigation and other uses,
the coastal states would be obliged to prevent unjustifiable
interference with other uses, and to ensure compliance with
specific international standards in this regard (e.g., regarding
maritime safety standards and the breadth of safety zones).
Conversely, other uses would have to be conducted in accor-
dance with a general obligation of reasonable regard for
coastal state rights under the Treaty. For example, other
users would have to respect the safety zones around installations
established under the Treaty.
(2) The coastal state would ensure compliance with
international standards, and could apply higher standards to
prevent pollution from resource activities, drilling and
installations over which it has exclusive rights under the
Treaty.
(3) The coastal state would be obliged to protect the
integrity of foreign resource investment.
While the relative difficulty of achieving agreement on
each of these points varies, we believe the chances of achieving
agreement on the first substantive point are good. The
practical value of any of these measures depends largely on
agreement on compulsory dispute settlement.
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Revenue sharing aside, which is discussed below, we
believe the U.S. interests are best served, and the negotiation:
simplified, if the standards apply seaward from the territorial
sea and we will seek that result. Nevertheless, we believe that
with respect to the second and third limitations above, if
necessary to achieve agreement on the standards, the Delegation
should continue to have flexibility on the issue of whether
these limitations are applicable seaward from the 12-mile limit
of the territorial sea, or only seaward of the 200-meter depth
curve where it is beyond 12 miles.
We have reached the conclusion that the rate of revenue
sharing by coastal states in the area of coastal state resource
jurisdiction should be uniform for all states and probably
should be computed in the Treaty as a fixed percentage of the
value of production at the wellhead in order to simplify its
application under different economic systems. In this regard,
there are five interrelated variables which determine the
absolute amount of revenue and the relative shares among coastal
states. The variables are: (1) the output potential of the
revenue sharing area; (2) the revenue sharing rate; (3) the
rate of hydrocarbon production; (4) the timing of production; and
(5) the relative distribution of resources with respect to
distance/depth and distribution of resources among coastal
states. We believe the coastal state should be responsible for
collecting and transfering any revenues. (For a discussion of
the allocation of revenues, see page "-2 under section H.)
Specific ranges are being developed now on the basis of the
criteria specified in NSDM 62:
"...a level that will make a substantial contribution
to development, render participation in the Treaty attractive
to the necessary signatories, and at the same time encourage
exploration and exploitation of the seabeds."
It should be noted that the attitudes of the coastal
state majority, as well as that of the landlocked and shelflocked
minority, are relevant to the second criterion.
There is disagreement about revenue sharing. Accordingly,
three options are presented. In general terms they are:
(1) no revenue sharing; (2) revenue sharing up to 1%
starting at 12 miles; (3) revenue sharing up to 5% starting
at 12 miles or 200 meters (or functional equivalent)whichever
is greater. These options are followed by an additional option,
consistent with options 2 and 3 above, for revenue sharing
beyond 200 miles at a higher rate than landward of 200 miles.
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Option 1. The U.S. should withdraw its present support
for revenue sharing with respect to any area of coastal state
seabed jurisdiction.
Pros
(1) Revenue sharing, even at modest rates, involves
large sums that would increase through time. There would
be an undesirable drain on tax revenues and an adverse effect
on the U.S. balance of payments position.
(2) Any form of revenue sharing will face the problem
of verifying that a coastal state has actually complied with
its royalty payment obligations. There will be temptations
to cheat on a common definition of the term "value of production,"
and the U.S. could well be left paying more than its fair share
of the coastal states' obligations.
(3) The financial burden of revenue sharing will be
an additional disincentive for exploitation of critically
needed hydrocarbons and other minerals.
(4) There have been few specific reactions to the revenue
sharing proposals that the U.S. has advanced. Hence, it is
a propitious time to abandon this policy.
(5) Revenue sharing has not proved to be an effective
"bargaining chip"'in the negotiations. In fact, revenue
sharing may be opposed by a significant number of developing
coastal states and thus our revenue sharing proposals may not
only fail to gain us support but may make it more difficult
to obtain other substantive objectives.
(6) Some members of Congress have expressed reservations
about revenue sharing.
(7) Revenue sharing, if based on royalties, would raise
the prices of petroleum products and reduce output. As the
chief consumer of,fuels, the United States would be the
principal country'hurt by this but all nations would be
affected.
(8) Revenue sharing's greatest financial burden in the
short term would fall on the U.S. given our plans to rapidly
develop our OCS hydrocarbon reserves (part of Project Indepen-
dence) and the growing technological capability of U.S. firms
to develop distant continental margin areas.
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CONS
(1) Revenue sharing has been part of the U.S. ocean's policy
since the President's announcement in May, 1970. Resolutions
that have overwhelmingly passed in both the Senate and House
endorsing the President's ocean policy have specifically endorsed
revenue sharing. Private groups and prominent newspapers have
made similar endorsements. To withdraw support for revenue sharing
now would impair our domestic credibility and undermine the
broad support we have been given.
(2) Since 1970, the U.S. has vigorously advocated in the
international negotiations the need for an early Conference.
Most developing countries have come to believe that the U.S.
seriously and sincerely desires to accommodate both their interests
and our own in a new stable agreement on the oceans. Abandonment
of revenue sharing could subject the U.S. to the charge that we
misled developing countries into supporting the need for a
Conference helpful only to our navigational interests when we did
not, in fact, intend to negotiate a settlement that would take
their interests equitably into account. It would also cast doubt
on the seriousness of all other U.S. proposals made in the LOS
negotiations, particularly various offers of cooperation and
assistance, and make the achievement of our basic objectives much
more difficult.
(3) There is little risk that revenue sharing sums will be
excessive. The amount of revenue that would be available is
dependent upon many factors such as the method of computation,
area involved, and the rate of sharing. There is every indication
in the negotiations that the large majority of states are not
eager to commit substantial funds.
(4) The withdrawal of our revenue sharing proposal might be
misunderstood at home and abroad as a gesture to the petroleum
companies. In view of our difficulties on the problem of oil
prices and profits, this is a particularly bad time to run such
a risk.
(5) There is no evidence that revenue sharing would deter
development, particularly in the light of sharply increased prices.
Costs might be passed along to the consumer or to the general
taxpayer in the case of tax credits.
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(6) Revenue sharing is virtually the only benefit that
can be offered to the many states that have little or nothing
to gain by expansion of coastal state jurisdiction over seabed
minerals. These states constitute a blocking third at the
Conference and their interests must be accommodated if we are to
achieve an overall settlement that protects U.S. non-resource
as well as U.S. resource interests.
(7) Revenue sharing obligations would apply to all coastal
states at the same rate. Accordingly, the U.S. share must be
considered in light of that of other states, and the resulting
relative diminution of the need for direct foreign economic
assistance to developing countries. Foreign states are likely
to have about 85% of the total world petroleum from which revenues
would have to be shared.
(8) The U.S. is seeking recognition and confirmation in
international law for broad coastal state jurisdiction over seabed
minerals. Achievement of this objective while protecting our
navigational and other non-resource interests would be welcomed
by the Congress. A variety of acceptable means are available
to deal with the transfer of revenue sharing funds issue.
(9) To withdraw our support for revenue sharing would
jeopardize our efforts to gain support for the President's
Five Conditions on the continental margin. By eliminating one,
we would encourage the elimination of all and this would run
the real risk that economic jurisdiction would evolve into a
zone undistinguishable from a 200-mile territorial sea with
serious consequences for our navigational interests.
(10) Our credibility in international negotiations
generally would be hurt.
(11) We would eliminate one of the principal inducements
for other countries to sign the LOS Convention.
(12) It is economically inconsistent to make the unquali-
fied claim that revenue sharing will be both a disincentive for
exploitation and that revenue sharing will cause higher prices.
(13) Revenue sharing based on the value of hydrocarbon
production will not necessarily raise prices and it will not
cause a reduction in existing output levels. In theory, a royalty
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could slow the rate of output growth; however, in practice,
firms may not be deterred by revenue sharing which raises their
total cost by an extremely small proportion.
Option 2. The U.S. Delegation should be authorized to
support revenue sharing from seabed minerals production seaward of
a 12-mile territorial sea if the Persian Gulf and North Sea are
included. The precise rate that is acceptable would be determined
on the basis of the criteria specified in NSDM-62 in full consul-
tation with the Agencies concerned. In no event would the revenue
rate exceed 1% of the value of the hydrocarbons extracted from
the area.
Pros
(l) While it is likely that revenue sharing is more easily
negotiated if shallow areas close to the coast are excluded, there
is no reason for the U.S. to take the blame for insisting on that
result.
(2) Major oil exploitation off the coast of other countries
is in areas like the Persian Gulf and the North Sea that are at
less than 200-meters depth. Inclusion of revenues from the areas
is likely to significantly increase the total, and is likely to
increase the pressure for lower rates of revenue sharing.
(3) The total financial cost depends on the rate of revenue
sharing: a lower rate for a larger area could be less costly than
a higher rate for a smaller area.
(4) Since deep water technology is likely to be used off the
U.S. first, at the initial stages the U.S. might pay a relatively
higher proportion of the total if revenue sharing does not include
significant shallow areas.
(5) Since the U.S. has only about 8% of the world's
continental margins, over the long run the U.S. percentage of funds
available to international development efforts arising from revenue
sharing is likely to be relatively low and,accordingly, we have
an interest in maximizing the revenue base.
(6) The ability to present this Option has major negotiating
advantages in reaching a satisfactory overall settlement in both
non-resource and resource issues. The good-will votes of the
geographically disadvantaged states are essential for achievement
of our non-resource objectives and our straits position in particular,
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(7) Application of revenue sharing seaward of a 12-mile
limit increases the likelihood that the US will be able to achieve
agreement on application of substantial international standards
to protect our navigation and other nonresource interests seaward
of 12 miles.
(8) The Delegation should have the flexibility to present
a reasonably forthcoming approach on this issue in order to
ensure that we have the latitude to achieve our overall objectives
at the Conference.
(9) A larger revenue sharing area, without a national tax
credit arrangement, allows for a lower revenue sharing rate, which
in turn is less distortionary in terms of investment and production
decisions.
(1) Revenue sharing is designed in part as a device
for accommodating legal differences on the extent of coastal
state jurisdiction beyond 200 meters. A 12-mile inner boundary
does not contribute to resolution of that issue.
(2) Because coastal states clearly have undisputed existing
vested rights within 200 meters, domestic and international
opposition to revenue sharing starting at 12 miles is likely
to be considerably greater.
(3) While it is true that the U.S. has only about 8%
of the world's continental margin, there is likely to be more
production sooner off the U.S. and thus the actual U.S. contribution
(given a set rate) for some time is likely to be higher than our
total resource share.
(4) The U.K., which is our closest supporter on these
issues, is strongly opposed to revenue sharing landward of 200
meters. We might also run some risk of Arab opposition.
(5) It is estimated that 90% of the recoverable hydrocarbon
potential in the U.S. continental margin is located seaward
of 12 miles. Extension of revenue sharing to this area even
at a lower rate could substantially increase the U.S. obligation.
Option 3. The U.S. Delegation should continue to be
authorized to support revenue sharing from seabeds mineral produc-
tion seaward of the territorial sea or the 200 meter depth curve
(or a functional equivalent), whichever is further seaward. The
precise rate that is acceptable would be determined on the basis
of the criteria specified in NSDM-62 in full consultation with the
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Agencies concerned, and would in no event exceed 5% of the value
of the hydrocarbons extracted from the area. (As a tactical
matter, the U.S. would not indicate that the reason for excluding
large areas close to shore relates to its own interests, but
rather explain this in terms of negotiability with the majority of
coastal states.)
1) All current U.S. production is from areas landward of the
.200-meter depth curve, and most substantial production in the near-
Germ would be from such areas. Exclusion of these areas accordingly
will significantly reduce the size of our obligations, and defer
tie timing of its payments, irrespective of the applicable rates
within any likely range.
2) Revenue sharing is designed in part as a device for
accommodating legal differences on the extent of coastal state
jurisdiction beyond 200 meters. There is no doubt as to existing
Yarisdiction within 200 meters.
3) Because coastal states clearly have undisputed existing
vested rights within 200 meters, domestic and international
opposition to revenue sharing from that area is likely to be
considerably greater.
4) The U.K., which is our closest supporter on these issues,
i.:3 strongly opposed to revenue sharing landward of 200 meters.
We should also not run a risk of opposition from Persian Gulf and
or-her Arab States in the negotiation.
5) The economic review revealed that approximately half of
the recoverable hydrocarbon potential on the U.S. continental margin
is located landward of 200 meters. In the absence of significant
differences in revenue sharing rates, exclusion of revenue sharing
in the area landward of 200 meters would substantially reduce the
US obligation.
6) The ability to present this Option has major negotiating
advantages in reaching a satisfactory overall settlement on both
non-resource and resource issues. The good will and votes of the
geographically disadvantaged states are essential for achievement
of our straits position in particular.
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7) The Delegation should have the flexibility to present
a saleable and reasonably forthcoming approach on this issue in
order to ensure that we have the latitude to achieve our overall
objectives at the Conference.
1) While it is likely that revenue sharing is more easily
negotiated if shallow areas close to the coast are excluded, there
is no reason for the U.S. to take the blame for insisting on that
result.
2, Major oil exploitation off the coast of other countries is
in areas like the Persian Gulf and the North Sea that are at less
than 200-meters depth. Inclusion of revenues from the areas is
likely to significantly increase the total, and is likely to
increase the pressure for lower rates of revenue sharing.
3) The total financial cost depends on the rate of revenue
sharing: a lower rate for a larger area could be less costly than
a higher rate for a smaller area.
4) Since deep water technology is likely to be used off
the U.S. first, at the initial stages the U.S. might pay a relatively
higher proportion of the total if revenue sharing only begins at
a depth beyond 200 meters than would be the case if significant
shallow areas are included.
5) Since the U.S. has only about 8% of the world's continental
margins, over the long run the U.S. percentage of funds available
for international development efforts arising from revenue sharing
is likely to be relatively low and,.accordingly, we have an
interest in maximizing the revenue base.
Additional Option. The U.S. Delegation should be authorized
to support a greater rate of revenue sharing for seabed areas
under coastal state control beyond 200 miles than those landward
of 200 miles. While the U.S. Delegation would be authorized
to support the above proposal in principle, there would be no
position taken on specific proposals or rates of revenue sharing
for areas beyond 200 miles until the Chairman of Delegation had
consulted with the Chairman of the Task Force and senior represen-
tatives of the agencies concerned. Specific ranges are presently
being studied.
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') There is a substantial likelihood that the differing
dews in the negotiations on whether coastal state control over
seabed resources should extend beyond 200 miles can only be
reconciled by accepting greater revenue sharing with the inter-
uaational community beyond 200 miles than landward of 200 miles
in exchange for recognition of coastal state resource jurisdiction
Ieyond 200 miles.
2) There is no evidence that higher revenue sharing from
:he area beyond 200 miles would deter development as such costs
alight be passed along to the consumer or to the general taxpayer
in the case of tax credits.
The great majority of states do not gain substantially by
3)
-xtending seabed resource jurisdiction beyond 200 miles. For the
Few that do, however, recognition of their control over such
resources is essential for agreement to the Treaty. Hence the
U.S. Delegation needs the flexibility to find a reasonable solution
:hat will not be opposed by the great majority of the states and
yet will protect our broad shelf interests.
4) The U.S. is seeking recognition and confirmation
.n international law for broad coastal state jurisdiction over
eeabed minerals. Achievement of this objective while protecting
our navigational and other non-resource interests would be
welcomed by the Congress. A variety of acceptable means are
-tvailable to deal with the transfer of the revenue sharing fund issue.
Phe U.S. contribution must be considered in light of that made by
other States and the resulting relative diminution of the need
for direct foreign economic assistance to developing countries.
5) It is possible that the ability to accept a higher
ate of revenue sharing beyond 200 miles will considerably help
.educe the pressure for an unacceptably high rate for the seabed
,area landward of 200 miles.
6) Since the U.S. percentage of seabed area beyond 200 miles
decreases with increases in uniform depths world-wide, the U.S.
Loses less relatively by accepting a higher revenue sharing rate
or such areas than it would if the rate were the same within and
beyond 200 miles.
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7) Since the U.S. has only about 8% of the world's contin-
ental margins, over the long run the U.S. percentage of funds
available for international development efforts arising from
revenue sharing is likely to be relatively low and,accordingly,
we have an interest in maximizing the revenue base.
1) Revenue sharing, even at modest rates, involves large sums
that would increase through time. There would be an undesirable
drain on tax revenues and an adverse effect on the U.S. balance
of payments position.
2) Any form of revenue sharing will face the problem of
verifying that a coastal state has actually complied with its
royalty payment obligations. There will be temptations to cheat
on a common definition of the term "value of production," and the
U.S. could well be left paying more than its fair share of the coastal
states' common heritage obligations.
3) The financial burden of revenue sharing will be an
additional disincentive for exploitation of critically needed
ydrocarbons and other minerals.
4) There have been few specific reactions to the revenue
sharing proposals that the U.S. has advanced. Hence, it is a
propitious time to abandon this policy.
5) Some Members of Congress have expressed reservations about
revenue sharing.
6) Revenue sharing, if based on royalties, would raise the
prices of petroleum products and reduce output. As the chief
consumer of fuels, the United States would be the principal
country hurt by this but all nations would be affected.
7) Revenue sharing's greatest financial burden in the short
term would fall on the U.S. given our plans to rapidly develop
our OCS hydrocarbon reserves (part of Project Independence)
and the growing technological capability of U.S. firms to develop
distant continental margin areas.
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8) While it is true that the U.S. has only about 8% of the
world's continental margins, there is likely to be more production
:.sooner off the U.S. and thus the actual U.S. contribution (given
a set rate) for some time is likely to be higher than our total
resource share.
stimates of revenue sharing
The following is one possible calculation for the annual
payment of revenues to the international community from hydro-
carbon resources recovered from the U.S. continental margin.
IL should be stressed that this is only one possible approach
and that the figures in the table are only illustrative.
This approach follows the depletion rate assumption used in
the Economic Review.
Estimating the magnitude of revenues that will be paid
by producers of deep seabed minerals is a difficult task.
ideally, one would calculate the present value of the net
revenue (total revenue minus total cost) stream that is
expected from all the world's margins. However, in doing such
a calculation it is necessary to predict future demand, future
technology and costs of production, substitute sources of
supply,and the magnitude of the potential reserves.
Some of the basic information has been collected and
is contained in two reports by the U.S. Geologic Survey (Oct-
ober 10, 1973 and January 3, 1974). Presented there are
estimates of the "potential recoverable petroleum resources
of the U.S. continental margins." These are not estimates of
the total resources in place. Instead, they are recoverable
resources estimated at 25 percent and 50 percent respectively
of the total oil and natural gas resources. The implication
is that given prices similar to those prevailing now, then
I.hese magnitudes are the ones expected to be recovered over
the lifetimes of all the fields in the U.S. margins. Such
,.ni estimate has to be converted, of course, into some typical
-c.nnual estimate. Again difficulties arise since the area in
question contains several fields and output in each field
varies over time. One very uncomplicated way of getting at
typical annual output estimate is to divide the total
recoverable resources by some number of years to approximate
the annual rate. The number used in this calculation assumes
a depletion of half the resources in 20 years. It should be
noted that new U.S. Geologic Survey estimates of potential re-
coverable petroleum resources of the margin landward of 200
:peters indicate that the resources may be only 1/3 to 2/3 as
1_arge as the estimates used in the calculations. Thus, the
=_gures in the "One Percent Royalty" table may be significantly
=.7vers-sated.
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The estimates in the following table apply to the area
beyond 12 miles or 200 meters depth, whichever is farther
seaward.
to 2500 meters depth to 4000 meters depth
$10 per bbl &
$.65 per 1000 cu. ft. $2.65 billion per yr. $3.52 billion per yr.
$6 per bbl &
$.55 per 1000 cu. ft. $1.75 billion per yr. $2.32 billion per yr.
Of interest as well, are approximations of the annual
payments to the international community from the United States
when the inner boundary of the CSEA is simply 12 miles.
Using similar assumptions, the results are:
to 2500 meters depth to 4000 meters depth
$10 per bbl &
war$-65 per 1000 cu. ft. $1.01 billion per yr. $1.19 billion per yr.
$6 per bbl &
$.55 per 1000 cu. ft. $.78 billion per yr. $.67 billion per yr.
2. Delimitation and Island Problems
As indicated, the problems of establishing boundaries between
areas under the jurisdiction of neighboring coastal states, including
the related islands problem, are highly complex and divisive.
They concern not only seabeds resources but fisheries. On the
one hand, it would be desirable to achieve agreement on the legal
principles governing delimitation, and even more so on procedures
for peacefully resolving delimitation disputes, since this is a
major area of potential uncertainty and conflict over rights in the
oceans. Such disputes present political problems for the U.S.,
particularly when friendly states are involved. Moreover, explor-
ation and exploitation are usually delayed in disputed areas, thus
conflicting with our goal of increasing global production. On
the other hand, the differences on the issues are essentially
bilateral in character, would not in fact be resolved definitively
by an LOS treaty, and are likely to complicate the negotiations
seriously.
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If the issue is dealt with in detail, we like any other
coastal state would be compelled to seek a result that favors our
position vis-A-vis cur neighbors; this would result in direct
conflict with Canada and potentially with the USSR, Mexico, Cuba,
and the Bahamas.
in this situation, while trying to ensure that our substantive
interests in the issue are not prejudiced and making a strong
attempt to provide procedures -- perhaps regional in character --
Lo deal with future boundary conflicts, our efforts should be
directed toward preventing the issue from disrupting the Conference.
As a matter of substance, a general reference to resolution of
t:he issue in accordance with international law may well be the
best result.
At the same time, we are preparing specific analyses of U.S.
interests in order to deal with the contingency of a specific
~-iegotiation on the issue. The results of these more technical
studies will be employed in a manner consistent with our overall
policy posture on individual issues.
The additional question of whether small isolated islands
should be entitled to full economic jurisdiction at the expense
of the high seas and the international seabed area -- where no
neighboring coastal state is involved -- is likely to be resolved
in favor of such jurisdiction. States with such islands --France,
he UK, Brazil and Chile to name just a few -- are likely to
press harder than the opposition, which would be protecting
i community rather than individual interest. We should be aware
Lhat the effect will be to increase the importance of many isolated
islands and rocks in the Pacific and Indian Ocean in particular,