The Multinational Monitor

WINTER 19878-79 - VOLUME 1 - NUMBER 1

D E E P   S E A   M I N I N G

Who Will Claim Common Heritage?

Corporate interests endanger international agreement on deep seabed minerals

by George Riley

Resting undisturbed on the ocean floor, potato-size mineral nodules, "ferro manganese concretions" to the scientists, have become the subject of a unique attempt at international economic cooperation. In 1970, the UN General Assembly passed a resolution declaring all underwater resources, to be the common heritage of mankind. In 1973, the UN Law of the Sea Conference took up the task of establishing an international regime for the exploitation of deep seabed minerals.

But most of the Conference's sessions to date have exhibited a tension common to international negotiations:. the developed countries are protective of their advanced technology and capital resources while the underdeveloped countries are suspicious of the aims and motives of the industrialized states that are alone capable of deep seabed mineral extraction. Watching the proceedings carefully - and not without a hand in the intrigue that has marked the deliberations - are several multinational corporations, members of international consortia ready to begin mining operations beneath the sea.

Although scientists are not exactly sure how, manganese nodules tend to grow on stable ocean floors. The highest concentrations of nodules exist in the Pacific Ocean between Hawaii and Mexico. The nodules are rich in cobalt, nickel, copper and manganese, but recovery does present major problems because the nodule beds are located at depths of up to 15,000 feet. Two proposed methods of extraction have received limited testing. Apparently the most feasible method, and the most expensive, is the use of a hydraulic pump. However, engineers worry about breakdowns in the components, especially the pipe line and bottom mining device. The other method, the continuous-line-bucket (CLB), consists of a looped chain of mining buckets lowered to the sea floor between two ships. Although less expensive than the hydraulic pump, the CLB gathers only a small portion of the nodules in a given area, while the hydraulic pump recovers about 90 percent.

Because the costs and risks of deep seabed mining are so high, several large multinationals have formed international consortia to explore the ocean floor and share equipment and expertise. Three of these groups are considered the most active: the Kennecott Copper Corporation with Rio Tinto Zinc, Mitsubishi, and Consolidated Gold Fields; Ocean Mining Associated directed by Deepsea Ventures Inc.; and the INCO Consortium, led by International Nickel. Other U.S. firms with interests in nodule mining are Lockheed, U.S. Steel, and Phelps Dodge. All of the major consortia are ready to begin pilot demonstrations in the Pacific Ocean, but, according to a report by the Department of the Interior, political uncertainties both within the U.S. government and the UN Law of the Sea Conference "must be removed before commitments are made " for full-scale 'commercial operations."

Pressured by mining interests or annoyed by the progress of the UN Conference, several members of Congress introduced bills during the 95th Congress providing for U.S. unilateral licensing of deep seabed mining operations. The Carter administration, following a policy established by the two previous administrations, originally opposed measures that might undermine international negotiations. However, in October 1977, Ambassador Elliot Richardson, chief U.S. negotiator at the Conference, announced that the Administration would back a unilateral approach. This reversal came Afterr a particularly frustrating Treaty session where a generally agreed-upon text was changed at the last minute, making it unacceptable to the U.S. Ambassador Richardson told a congressional committee that "there has to be pressure in the sense that the other participants in the Conference have to be aware that deep seabed mining will go forward with or without a treaty."

The mining multinationals geared up to lobby for a key provision in the bill that would ease the "political uncertainties" of deep seabed mining. Under this provision, the U.S. government would compensate companies that suffered losses due to a future Law of the Sea Conference Treaty. The legislative efforts were directed by Leigh Ratiner, the chief lobbyist for Kennecott Copper. Ratiner was particularly qualified for the task; in January 1977, he resigned from the U.S. negotiating team at the Law of the Sea Conference, and the next day he took the job with Kennecott.

The House Committee on Merchant Marine and Fisheries reported out a bill that included a compensation plan. However, the International Relations Committee strongly opposed the plan on the grounds that U.S. taxpayers should not underwrite the investments of huge corporations against U.S. entry into an international treaty that may be prejudicial to corporate interests. On July 28, 1978, the House passed an amended version of the bill that substituted a "grandfather rights" clause for the compensation program. The "grandfather rights" section stated the intention of the U.S. Congress to. protect the interests of U.S. citizens in any seabed treaty.

Even without the investment guarantees, the House version drew harsh criticism from various sectors. Despite disclaimers in the bill, representatives to the UN conference were shocked by what seemed to be a unilateral extension of U.S. sovereignty over the deep seabeds. Observers at the conference feared that the action would break the "good faith" approach and force moderates into extremist positions.

Passage of a Senate version appeared imminent, but opponents were able to stall the bill in com mittee until the the Senate adjorned this fall. The Senate version contained a reciprocating states provision under which the U.S. would recognize, through agreement, the seabed mining rights of other countries. Because only industrial countries have the technology for seabed mining, such a plan could effectively eliminate developing nations from benefiting from the "common heritage of mankind."

In the midst of the debate over the deep seabed, many members of Congress asked why the U.S. should jeopardize chances of reaching a fair and equitable Law of the Sea Treaty. The Department of Defense testified that the United States has large stockpiles of the metals found in the nodules, stockpiles available in the event that trade with supplier nations breaks down. Moreover, the - market for metals such as copper and nickel is flooded due to overproduction, a glut that may continue well into the 1980's. Finally, for the unilateral licenses to have any meaning, the U.S. government would have to be willing to back up American stakes against the claims of other nations. Such backing is tantamount to the assertion of jurisdiction in an area where the U.S. has historically maintained that no country has jurisdiction.

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