The United National Convention of the Law of the Sea (UNCLOS) celebrated its 30th anniversary this year. Simultaneously, there has been a push for the U.S. to ratify the Law of the Sea Treaty (LOST). Though signed, the treaty was never ratified by the U.S.; and for good reason. LOST redistributes wealth away from developed states, such as the U.S., and discourages innovation and investment.
LOST replaces hundred-year-old sea boundaries for member states, regardless of being a coastal or land-locked state. This can potentially reduce the extent of sovereign territory of the U.S. For example, Niger, a predominately desert country in Sub-Saharan Africa, at least 400 miles away from the nearest ocean coast-line, is allowed the same relative amount of ocean territory as Greenland, the world’s largest island.
LOST also creates a governing board for the ocean, the self-declared Authority. The area outside of states’ sea-boundaries, known as the Area, is to be mined by the Authority-created Enterprise. The Enterprise is a business organ which excavates for the Authority.
At the Authority’s discretion, developed states are to pay dues, and state and private deep-seabed mining companies are to pay “royalties” towards the creation of the Enterprise.
An application must be submitted for a company to mine in the Area. Each application costs $500,000 regardless of whether a company is already in contract with the Authority. Applications must contain detailed information on two potential sites. The Authority decides which site may be mined and which site may be mined by the Enterprise. The quantity expected to be excavated, any tools and methods, and all other technological knowledge which may be used at both sites must also be included in the application. This lessens incentives to innovate new technologies for mining; new technologies made fair-use for all competing mining companies.
Institutions to teach companies’ technology to both Enterprise employees and developing states are also to be established.
In addition, five years after excavating minerals from a site, a 1 percent “royalty” fee will be imposed. This will increase 1 percent annually up to a maximum of 12 percent. That, or as prescribed in LOST, a USD$1 million annual fee, whichever is greater.
This money helps fund the Authority. The Authority also distributes these royalties to developing states, as well as the Enterprise, based on their “needs.” The Authority can determine whether a developing state is exempt from application and royalty fees. The Authority is mainly composed of members from developing states, thus putting developed states on the hook while developing states are void of all fees.
The outcome to ratifying LOST is the end to private companies’ investment in the Area. Technological advances which may have been used for such mining projects will be stopped. Minerals which could have been excavated will be left untouched and the jobs and wealth created to excavate these materials will never come to exist. Not only has LOST created a governing board for the largest surface area of the world, it drives away from the largest area to which investment looks promising. It’s time for LOST to be buried at sea.