Thursday, January 17, 2008

The Halloween Treaty: Law of the Seas



Today, the Senate will consider a Halloween treat, the United Nations Convention on the Law of the Sea. More than 150 nations have joined the convention, which was signed by President Clinton in 1994, although the Senate has yet to ratify it. Although President Bush and his administration urge ratification, the Senate would do well to reflect before accepting treats — or treaties — from the United Nations.

Of course, parts of the Law of the Sea Treaty, appropriately titled LOST, make sense. LOST grants governance rights of "exclusive economic zones" within 200 nautical miles of shore. With sovereignty over islands throughout the Pacific, America would have strong claims on large swaths of oceans. Indeed, we would have the largest oceanic claims in the world. Thus it is not entirely surprising that the State Department and the Department of the Navy are ardent supporters of LOST.

Clearer boundaries could help American oil and mineral companies explore and develop mineral resources within the 200-mile zone. America's fishing industry could have clearer exclusivity rights. To see a map of these economic zones, visit

At first blush, the treaty seems too good to be true, but there is a catch: the United Nations. The world body, under the treaty, has expansive powers to regulate international waters.

The United Nations has more than a dozen alphabet soup-designated agencies. Some do good deeds; others do not. A great many have served little more purpose than a soapbox for anti-American speeches. LOST already empowers yet another one of these U.N. agencies, this one called the International Seabed Authority, based in Kingston, Jamaica. If the Senate ratifies the treaty, the ISA could become one of the most potent organizations in the world, with the power that eluded the Spanish, the British, and the American navies over the centuries — unquestioned authority over international waters. LOST gives the ISA total jurisdiction over all the international oceans and everything in them, from mineral rights to fishing rights to environmental protection.

Moreover, the ISA's power would not necessarily be limited to international waters. Under LOST, American sovereignty over our exclusive economic zone may be illusory. Article 2(3) says: "... sovereignty over the territorial sea is exercised subject to this Convention and to other rules of international law."

Who would resolve disputes between individual governments such as ours and the ISA over sovereignty? The answer is obvious. The ISA not only has regulatory authority over a large surface area of the globe, but it has the power to raise money — lots of it. The ISA can obtain revenue through fees and royalties on the revenues of companies seeking access to oil, gas, and minerals in international waters. The tax structure begins at 1% in the sixth year of production with a 1% of production increase yearly up to 7%.

Today, U.N. agencies are largely funded through fees paid by member states; they have no legal authority to tax corporations. Although LOST refers to fees and never mentions taxing corporations, the ultimate result is that the ISA would tax corporations. Where the ISA goes today, other U.N. agencies are almost certain to follow tomorrow.

The ISA has the authority not merely to tax and to regulate corporate activities in international waters, but to compete with them as well. The ISA can itself develop mineral and other rights in international waters in competition with private companies.

Through bilateral and multilateral negotiations, nations have reached understandings on environmental concerns of mutual interest. To date, the United Nations has had little direct effect on requiring environmental regulations of member states. That may change with LOST. Part of the power of the ISA is environmental regulation. Whether its power is limited to activities in international waters remains to be seen. As long as there have been boats, people have engaged in commercial activities on the sea. Nations great and small have sought to cross oceans and even to manage and control them. But not even the most audacious state has claimed sovereignty over all oceans, for such sovereignty would be antithetical to the commercial and private interests of individuals around the world. Yet now some seek to hoist the U.N. flag over that which no nation would dare to claim.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He is organizing a seminar series at the Hudson Institute. He can be reached at

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