- THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

[Senate Hearing 112-654]
[From the U.S. Government Publishing Office]

S. Hrg. 112-654

THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

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HEARINGS

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

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MAY 23, JUNE 14, AND JUNE 28, 2012

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Printed for the use of the Committee on Foreign Relations

Available via the World Wide Web: http://www.gpo.gov/fdsys/
THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

S. Hrg. 112-654

THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

=======================================================================

HEARINGS

BEFORE THE

COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

MAY 23, JUNE 14, AND JUNE 28, 2012

__________

Printed for the use of the Committee on Foreign Relations

Available via the World Wide Web: http://www.gpo.gov/fdsys/
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COMMITTEE ON FOREIGN RELATIONS

JOHN F. KERRY, Massachusetts, Chairman
BARBARA BOXER, California RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania MARCO RUBIO, Florida
JIM WEBB, Virginia JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico MIKE LEE, Utah
William C. Danvers, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director

(ii)

C O N T E N T S

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Wednesday, May 23, 2012
THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39):
THE U.S. NATIONAL SECURITY AND STRATEGIC
IMPERATIVES FOR RATIFICATION

Page

Clinton, Hon. Hillary Rodham, Secretary of State, U.S. Department
of State, Washington, DC....................................... 7
Prepared statement........................................... 12
Responses to questions for the record submitted by Senator
John F. Kerry.............................................. 62
Dempsey, GEN Martin E., Chairman, Joint Chiefs of Staff,
Washington, DC................................................. 22
Prepared statement........................................... 23
Responses to questions for the record submitted by Senator
John F. Kerry.............................................. 72
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening
statement...................................................... 1
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening
statement...................................................... 5
Panetta, Hon. Leon E., Secretary of Defense, U.S. Department of
Defense, Washington, DC........................................ 16
Prepared statement........................................... 19
Responses to questions for the record submitted by Senator
John F. Kerry.............................................. 70

Additional Material Submitted for the Record

Letters submitted by Senator John F. Kerry received from:
Lockheed Martin Corporation, Robert J. Stevens, Chairman and
CEO........................................................ 74
AT&T, Bill Smith, president, AT&T Network Operations......... 76
Director of National Intelligence, James R. Clapper, director 78
United States Northern Command, Gen. Charles H. Jacoby, Jr.,
U.S. Army.................................................. 80
Chamber of Commerce of the United States, R. Bruce Josten,
executive vice president, Government Affairs............... 81
Letters submitted by Secretary of State Hillary Rodham Clinton
received from:
Maritime Trades Department, Michael Sacco, president......... 83
Seafarers International Union of North America, AFL-CIO,
David Heindel, executive vice president/secretary-treasurer 84
American Federation of Labor and Congress of Industrial
Organizations, Richard L. Trumka, president................ 85
Defenders of Wildlife; Environmental Defense Fund;
International Union for Conservation of Nature; Marine
Conservation Institute; Natural Resource Defense Council;
The Nature Conservancy; Oceana; Ocean Conservancy; and
World Wildlife Fund US..................................... 87
American Petroleum Institute, Jack N. Gerard, president and
CEO........................................................ 89

Thursday, June 14, 2012 (a.m.)
THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM
THE U.S. MILITARY

Fraser, GEN William M., III, Commander, U.S. Transportation
Command, Scott Air Force Base, IL.............................. 106
Prepared statement........................................... 107
Responses to questions submitted for the record by Senator
John F. Kerry.............................................. 150
Response of General Fraser, General Jacoby, and Admiral
Locklear to question submitted for the record by Senator
John F. Kerry.............................................. 152
Greenert, ADM Jonathan W., Chief of Naval Operations, U.S. Navy,
Washington, DC................................................. 99
Prepared statement........................................... 100
Responses to questions submitted for the record by Senator
John F. Kerry.............................................. 148
Response to question submitted for the record by Senator
Robert P. Casey, Jr........................................ 154
Jacoby, GEN Charles H., Jr., Commander, U.S. Northern Command,
Peterson Air Force Base, CO.................................... 108
Prepared statement........................................... 109
Response to question submitted for the record by Senator John
F. Kerry................................................... 152
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening
statement...................................................... 91
Locklear, ADM Samuel J., Commander, U.S. Pacific Command, Camp
H.M. Smith, HI................................................. 110
Prepared statement........................................... 111
Responses to questions submitted for the record by Senator
John F. Kerry.............................................. 152
Response to question submitted for the record by Senator
Robert P. Casey, Jr........................................ 154
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening
statement...................................................... 94
Papp, ADM Robert J., Jr., Commandant, U.S. Coast Guard, U.S.
Department of Homeland Security, Washington, DC................ 101
Prepared statement........................................... 103
Responses to questions submitted for the record by Senator
John F. Kerry.............................................. 149
Winnefeld, ADM James A., Jr., Vice Chairman, Joint Chiefs of
Staff, Washington, DC.......................................... 96
Prepared statement........................................... 98
Responses to questions submitted for the record by Senator
John F. Kerry.............................................. 149
Response to question submitted for the record by Senator
Robert P. Casey, Jr........................................ 153

Additional Material Submitted for the Record

Letters submitted for the record by Senator John F. Kerry:
James N. Mattis, General, U.S. Marines....................... 155
Douglas M. Fraser, General, U.S. Air Force, Commander........ 156
J. Stavridis, Admiral, U.S. Navy............................. 157
William H. McRaven, Admiral, U.S. Navy, Commander............ 158
C. Robert Kehler, General, USAF, Commander................... 159
Letters submitted for the record by Senator James M. Inhofe:
Coalition to Preserve American Sovereignty................... 160
Reserve Officers Association................................. 164

Thursday, June 14, 2012 (p.m.)
THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

Bellinger, Hon. John B., III, former Legal Adviser, U.S.
Department of State, Partner, Arnold & Porter, LLP, Washington,
DC............................................................. 181
Prepared statement........................................... 183
Groves, Steven, Bernard and Barbara Lomas Fellow, The Heritage
Foundation, Washington, DC..................................... 189
Prepared statement........................................... 191
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening
statement...................................................... 169
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening
statement...................................................... 171
Negroponte, Hon. John, former U.S. Deputy Secretary of State,
Washington, DC................................................. 176
Prepared statement........................................... 179
Rumsfeld, Hon. Donald, former U.S. Secretary of Defense, the
Rumsfeld Foundation, Washington, DC............................ 173
Prepared statement........................................... 175

Additional Material Submitted for the Record

Letters submitted by Senator John F. Kerry received from:
Lockheed Martin.............................................. 232
AT&T......................................................... 234
Chamber of Commerce of the United States..................... 236
American Petroleum Institute................................. 238
ExxonMobile.................................................. 240
Chamber of Shipping.......................................... 242
Letter from Heritage submitted by Senator James E. Risch......... 244
Paper by Bernie Oxman submitted by Hon. John B. Bellinger III.... 247

Thursday, June 28, 2012
THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM
BUSINESS AND INDUSTRY

Donohue, Thomas J., president and CEO, U.S. Chamber of Commerce,
Washington, DC................................................. 263
Prepared statement........................................... 266
Responses to questions submitted for the record by Senator
James E. Risch............................................. 306
Gerard, Jack N., president and CEO, American Petroleum Institute,
Washington, DC................................................. 270
Prepared statement........................................... 272
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening
statement...................................................... 257
Lugar, Richard G., U.S. Senator from Indiana, opening statement.. 262
McAdam, Lowell C., chairman and CEO, Verizon Communications,
Inc., New York, NY............................................. 279
Prepared statement........................................... 281
Responses to questions submitted for the record by Senator
Jim DeMint................................................. 309
Timmons, Jay, president and CEO, National Association of
Manufacturers, Washington, DC.................................. 275
Prepared statement........................................... 277

Additional Material Submitted for the Record

Marvin E. Odum, president, Shell Oil Company, prepared statement. 259

THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): THE U.S. NATIONAL
SECURITY AND STRATEGIC IMPERATIVES FOR RATIFICATION

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WEDNESDAY, MAY 23, 2012

U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 10:04 a.m., in
room SH-216, Hart Senate Office Building, Hon. John F. Kerry
(chairman of the committee) presiding.
Present: Senators Kerry, Boxer, Menendez, Cardin, Webb,
Shaheen, Coons, Durbin, Udall, Lugar, Corker, Risch, Inhofe,
DeMint, Isakson, Barrasso, and Lee.

OPENING STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS

The Chairman. The hearing will come to order.
Thank you all very much for being here with us today.
Secretary Clinton, Secretary Panetta, and General Dempsey,
welcome. We are particularly privileged to have you here today,
and we thank you for joining us.
It is really a rare occasion, I think, in any committee,
but it is a rare occasion in this committee when we have
simultaneously a panel of witnesses that brings together
America's top diplomat, our country's top defense official, and
our Nation's top military officer. Your presence here all
together powerfully underscores the importance that you put on
this issue.
Our committee shares this sense of importance, which is
why, I hope without respect to party or ideology, we will begin
an open, honest, and comprehensive discussion about whether the
United States of America should join the Law of the Sea
Convention.
I want to underscore the word ``comprehensive.'' I have
heard from countless military and business leaders for some
period of time who believe it is urgent that we ratify this
treaty. And I have also spoken with Senators and some groups
who oppose the treaty.
I intend to make certain that the committee does its job
properly and thoroughly. We will hear from all sides, and we
will ask all the questions as we begin the process of
educational hearings on this issue, the first since 2007.
The Senate has seen a fair number of new members elected
since then from both sides of the aisle, and our committee also
has new members. So I think a thorough examination of the
treaty is especially timely and relevant.
Some of us have had the opportunity in the past to evaluate
this treaty and even to vote on it in this committee. I am
personally deeply supportive of it, and I believe it is now
more urgent than ever that we ratify it because to remain
outside of it is fundamentally directly counter to the best
interests of our country.
I am convinced beyond any doubt that joining the other 160
nations that are party to the treaty will protect America's
economic interests and our strategic security interests. And I
believe the evaluation we make over these next weeks will
document that beyond any doubt.
I promise the committee and the Senate that,
notwithstanding my support, we will conduct exhaustive and fair
hearings to examine all of the arguments, pro and con.
Now some may ask why now? Why consider a treaty that has
been untouched by the Senate for the last 5 years and been
hanging around for more than 25?
Well, I think the real question is why we wouldn't have
this discussion now when, today, we have the worst of all
worlds? We have effectively lived by the terms of the treaty
for 30 years, but as a nonparty, we are on the outside looking
in. We live by the rules, but we don't shape the rules.
It couldn't be more clear. Without joining the Law of the
Sea, we are deprived of critical benefits and protections under
the treaty. A few quick examples.
Ratifying the treaty will lock in the favorable
navigational rights that our military and shipping interests
depend on every single day. It will strengthen our hand against
China and others who stake out claims in the Pacific, the
Arctic, or elsewhere. It will give our oil and gas companies
the certainty that they need to make crucial investments to
secure our energy future. It will put our telecommunications
companies on an equal footing with their foreign competitors,
and it will help secure access to rare earth minerals, which we
need for weapon systems, computers, cell phones, and the like.
It will also address issues of military effectiveness. As
our national security focus shifts toward the Asia-Pacific
region, it is more important than ever that we are part of this
treaty. China and other countries are staking out illegal
claims in the South China Sea and elsewhere. Becoming a party
to the treaty would give an immediate boost to U.S. credibility
as we push back against excessive maritime claims and illegal
restrictions on our warships or commercial vessels.
There is no doubt in my mind it would help resolve maritime
issues to the benefit of the United States and our regional
allies and partners, and we will hear from every single former
Chief of Naval Operations and Commandant of the Coast Guard to
that effect.
The treaty is also about energy security. While we sit on
the sidelines, Russia and other countries are carving up the
Arctic and laying claims to the oil and gas riches in that
region. We, on the other hand, can't even access the treaty
body that provides international legitimacy for these types of
Arctic claims.
Instead of taking every possible step to ensure our stake
in this resource-rich area, we are watching others assert their
claims and doing nothing about it because we have no legal
recourse.
This treaty is also about rare earth minerals. China
currently controls the production of rare earth minerals.
Ninety percent of the world's supply, we are dependent on from
China. There is no way that enhances American security. We need
this for cell phones, computers, weapon systems. U.S. industry
is poised to secure these minerals from the deep seabed, but
they cannot do so through the United States as it is because we
are not a party to the treaty.
Don't take my word for it. Listen to our top companies.
Just last week, Bob Stevens, the CEO of Lockheed Martin, wrote
to me urging that the Senate pass the Law of the Sea Treaty. I
want to just take a minute to read from his letter.
He said, ``The multibillion dollar investments needed to
establish an ocean-based resource development business must be
predicated upon clear legal rights established and protected
under the treaty-based framework of the Law of the Sea
Convention, including the International Seabed Authority. Other
international players recognize this same reality and are
acting upon it. Countries, including China and Russia, are
moving forward aggressively within the treaty framework, and
several of these countries currently hold exploration licenses
from the International Seabed Authority.
``Unfortunately, without ratifying the Convention, the
United States cannot sponsor claims with or shape the deep
seabed rules of the ISA. Yet that is the critical path forward
if the United States intends to expand and ensure access for
both U.S. commercial and Government interests to new sources of
strategic mineral resources.''
And without objection, I will place the full letter into
the record.
I also would just point out quickly that today there is a
full-page ad in the Wall Street Journal, placed by the U.S.
Chamber of Commerce. The U.S. Chamber of Commerce states three
reasons, the first of which is pure economics--jobs. The United
States economy depends on the passage of this.
So whether it is rare earth minerals, the Arctic, or
illegal maritime claims, China is moving the ball over the goal
line while we are sitting on the sidelines. To oppose this
treaty is actually to enable China and Russia to continue to
utilize the treaty to their benefit and to our disadvantage.
How does that make sense for American economic or strategic
security?
And the treaty is also about telecommunications. The treaty
provides a legal framework to lay and protect submarine cables.
I don't need to tell most people about how critical the
Internet is to our economy and national security.
We need to put ourselves on the best footing possible to
protect those cables through which the Internet flows, and the
treaty does that. And that is why AT&T, Verizon, Level 3, and
others support this treaty.
Again, don't take my word for it. In a recent letter, AT&T
explained, ``Submarine cables provide the backbone of
international transmission facilities for the global Internet,
electronic commerce, and other international voice and data
communication services that are major drivers of the 21st
century global information-based economy. It has never been
more important to our U.S. economic infrastructure and our
participation in the global economy to strengthen the
protection and reliability of international submarine cables.
``The Law of the Sea Convention, particularly as assisted by
the enforcement mechanisms available to parties under article
297, is a critical element of this protection.''
I would like to enter this letter into the record as well.
Now let me say a last thing about the process and timing
for consideration of this treaty, and I think that it is
important what I am going to say. Obviously, this is a
Presidential election year, and it is one that has already
proven difficult, if not, at times, toxic.
I do not want this treaty to become a victim to that race
or to the politics of the moment. A number of colleagues on and
off the committee have been very candid and suggested that they
would be more comfortable if we can avoid pushing this
deliberative process into the middle of an election. I would
like to see this treaty stay out of the hurly-burly
Presidential politics.
So heeding that advice and preferring that we encourage the
kind of evaluative and educational process which does justice
to this committee and justice to the United States Senate
ratification process, I announce today that I do not currently
intend to bring the treaty to a vote before the November
elections. We will have extensive hearings. We will do our due
diligence. We will prepare for a vote.
But unless somehow the dynamic were to shift or change, we
will wait until the passions of the election have subsided
before we vote. My hope and expectation is that everyone will
exhaust all avenues of inquiry and carefully consider the
arguments on both sides.
The contentious political season will now give us a chance
to do what this committee has historically done best, which is
not to politicize, but to spend serious, thoughtful time
deliberating and debating all of the questions of substance.
I am pleased to see that the Internet is already beginning
to buzz with some discussion of this. But I will say up front
there
is a lot of misinformation, and there is a certain amount of
mythology.
So I look forward to the process of clearing up that
misinformation and the mythology. As my friend Senator Moynihan
used to say, ``Everyone is entitled to his own opinion, but not
to his own facts.''
There are facts with respect to this treaty, and I look
forward to this committee establishing what they are.
Ultimately, this issue needs to be decided by the members of
the committee asking tough questions of the witnesses and not
by the outside groups.
So I am pleased that we are going to have an opportunity
over the next several weeks, the next couple of months, to hear
from multiple witnesses, and we begin today with our top
national security leaders. They will be followed by military
commanders, including those who are in charge of our
operations; by top business leaders, the Chamber of Commerce,
others; by treaty experts; and by opponents.
Once again, I simply ask that everybody work hard to find
out what is factual and what the realities are with respect to
how this works.
And so, with that, I would like to welcome today's
distinguished witnesses. As Secretary of State, Hillary Clinton
has worked tirelessly to advance our security and economic
interests abroad and, I think everyone agrees, has done a
tremendous job of doing so.
Secretary of Defense Leon Panetta has served with great
distinction across four decades in government. He has earned
broad respect from Democrats and Republicans for his pragmatic
and thoughtful approach to national security.
And General Martin Dempsey, the Chairman of the Joint
Chiefs of Staff, has done a tremendous job in his stewardship
of our military during a time of extraordinary challenge and
transition.
Senator Lugar.

OPENING STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA

Senator Lugar. Mr. Chairman, I join you in welcoming
Secretary Clinton, Secretary Panetta, and General Dempsey. We
are very pleased and honored that you have joined us today.
Nine years ago, the Foreign Relations Committee began
consideration of the Law of the Sea Convention after it was
designated by President George W. Bush as one of five
``urgent'' treaties deserving of ratification. The Foreign
Relations Committee took up all five of those treaties during
the 108th Congress, and all but the Law of the Sea eventually
gained the advice and consent of the Senate.
Our committee held two public hearings and four briefings
to examine the Law of the Sea Convention. Six Bush
administration Cabinet departments participated in the
interagency group that helped write the resolution of advice
and consent accompanying the treaty.
In the private sector, every major ocean industry,
including shipping, fishing, oil and natural gas, drilling
contractors, shipbuilders, and telecommunications companies
that use underwater cables, supported U.S. accession to the Law
of the Sea and lobbied in favor of it.
During the more than 4 months of consideration of this
treaty, the committee received only one negative communication
related to the treaty, and that was from a private individual.
None of the 19 members of the committee requested additional
witnesses or hearings, and the resolution of ratification
passed on February 25, 2004, without a dissenting vote.
Despite the unanimous vote in the Foreign Relations
Committee, Senator Bill Frist, then the majority leader,
declined to bring the Convention up in the Senate. In 2007 the
committee undertook an even lengthier process resulting in a
17-4 vote to refer the Convention to the full Senate. By that
time, Senator Harry Reid had become majority leader, and he,
too, declined to bring Law of the Sea before the full Senate.
In 2009 and 2010, though discussions occurred on Law of the
Sea within the Obama administration, passing the Convention was
not accorded a high priority. There was no concerted effort on
the part of the administration to move Law of the Sea as there
had been under the Bush administration.
The Obama administration's 2009 treaty priority list
indicated no special emphasis on passing Law of the Sea,
listing it among a general group of 17 treaties on which action
was supported. To my knowledge, the only official mention of
Law of the Sea by the President during his first 2 years was
one line in his Executive order covering ocean policy, which
was not issued until July 19, 2010.
Clearly, the enthusiasm for Law of the Sea has increased
within the administration during this Congress. The presence of
the distinguished panel before us today surely underscores
this. The substantive case for Law of the Sea is even stronger
today than it was in 2004 when I brought it up as chairman of
this committee.
Every year that goes by without the United States joining
the Convention results in deepening our country's submission to
ocean laws and practices determined by foreign governments
without U.S. input. Our Navy and our ocean industries operate
every day in a maritime environment that is increasingly
dominated by foreign decisionmaking. In almost any other
context, the Senate would be outraged at subjecting Americans
to foreign controls without U.S. input.
What many observers fail to understand about Law of the Sea
is that the Convention already forms the basis of maritime law
regardless of whether the United States is a party.
International decisions related to resource exploitation,
navigation rights, and other matters will be made in the
context of the Convention whether we join or not. Because of
this, there is virtual unanimity in favor of this treaty among
people who actually deal with oceans on a daily basis and
invest their money in job-creating activities on the oceans.
By not joining the treaty, we are abetting Russian
ambitions in the Arctic. We are making the job of our Navy more
difficult, despite the longstanding and nearly unanimous pleas
of Navy leaders that U.S. participation in Law of the Sea will
help them maintain navigational rights more effectively and
with less risk to the men and women they command.
We are turning our backs on the requests of important
American industries that use the oceans and must abide by rules
established under this Convention. We are diminishing our
chances for energy independence by making U.S. oil and gas
exploration in international waters less likely.
And we will not even be able to participate in the
amendment process to this treaty, which is far more likely to
impose new requirements on our Navy and ocean industries if the
United States is absent. We will feel these costs most keenly
in the Arctic, which is why successive Alaskan Governors and
Senators of both parties have supported this treaty.
In 2007, Mr. Paul Kelly, testifying on behalf of the oil
and gas industry, underscored how much we have to lose in the
Arctic by remaining outside the treaty. He noted that under the
Law of the Sea, the United States would have the opportunity to
expand its economic sovereignty over more than 291,000 square
miles of Extended Continental Shelf. Much of this is in the
Arctic, which holds one quarter of the world's undiscovered oil
and natural gas, according to the U.S. Geological Survey.
Mr. Kelly said, ``By some estimates, in the years ahead we
could see a historic dividing up of many millions of square
kilometers of offshore territory with management rights to all
its living and nonliving marine resources . . . How much longer
can the United States afford to be a laggard in joining this
process?''
Suggestions that somehow our maritime interests can be
asserted solely through robust naval power are not relevant to
the real world. The overwhelming majority of ocean disputes do
not involve enemies or issues that warrant military action.
As ADM Patrick Walsh testified at our first hearing in
2007, ``Many of the partners that we have in the Global War on
Terror who have put life, limb, and national treasure on the
line are some of the same ones where we have disagreements on
what they view as their economic zone or their environmental
laws.
``It does not seem to me to be wise to now conduct Freedom
of Navigation operations against those very partners that . . .
are in our headquarters trying to pursue a more difficult
challenge ahead of us . . . a Global War on Terror.''
Even a mythical 1,000-ship U.S. Navy could not patrol every
strait, protect every economic interest, or assert every
navigational right. Attempting to do so would be prohibitively
expensive and destructively confrontational.
The decision before this committee is whether the Senate
should continue to consign the United States to a position of
self-imposed weakness in our ability to influence ocean
affairs, despite the fact that no other nation has a greater
interest in navigational freedoms, a larger Exclusive Economic
Zone, or a more advanced technological capacity to exploit
ocean resources.
The Senate should enthusiastically affirm the leadership of
the United States in this vital area of international relations
by giving advice and consent to the Law of the Sea Convention.
I thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Lugar. I
appreciate that very much.
Madam Secretary, if you would lead off? Secretary Panetta
second, and General Dempsey, if you would bat cleanup? Thank
you.

STATEMENT OF HON. HILLARY RODHAM CLINTON, SECRETARY OF STATE,
U.S. DEPARTMENT OF STATE, WASHINGTON, DC

Secretary Clinton. Thank you very much, Mr. Chairman,
Senator Lugar.
After both of your opening comments, I think you have made
the case, both eloquently and persuasively, for anyone who is
willing to look at the facts. I am well aware that this treaty
does have determined opposition: Limited, but nevertheless
quite vociferous. And it is unfortunate because it is
opposition based in ideology and mythology, not in facts,
evidence, or the consequences of our continuing failure to
accede to the treaty.
So I think you will hear from both Secretary Panetta and
General Dempsey, as well as myself, further statements and
information that really reinforces the very strong points that
both of you have made.
We believe that it is imperative to act now. No country is
better served by this Convention than the United States. As the
world's foremost maritime power, we benefit from the
Convention's favorable freedom of navigation provisions.
As the country with the world's second-longest coastline,
we benefit from its provisions on offshore natural resources.
As a country with an exceptionally large area of sea floor, we
benefit from the ability to extend our Continental Shelf and
the oil and gas rights on that shelf.
As a global trading power, we benefit from the mobility
that the Convention accords to all commercial ships. And as the
only country under this treaty that was given a permanent seat
on the group that will make decisions about deep seabed mining,
we will be in a unique position to promote our interests.
Now the many benefits of this Convention have attracted a
wide-ranging coalition of supporters. Obviously, as we heard
from both Senator Kerry and Senator Lugar, Republican and
Democratic Presidents have supported U.S. accession. Military
leaders see the benefits for our national security. American
businesses, including strongly the U.S. Chamber of Commerce,
see the economic benefits.
It has the support of every affected industry, including
shipping, fisheries, telecommunications, energy, and
environmental groups as well. We have a coalition of
environmental, conservation, business, industry, and security
groups all in support of this Convention.
And I would ask that my longer written statement, along
with the letters that I have received in support of the treaty
be entered into the record.
The Chairman. Without objection.
Secretary Clinton. Now, one could argue that 20 years ago,
10 years ago, maybe even 5 years ago, joining the Convention
was important, but not urgent. That is no longer the case
today. Four new developments make our participation a matter of
utmost security and economic urgency.
First, for years, American oil and gas companies were not
technologically ready to take advantage of the Convention's
provisions regarding the Extended U.S. Continental Shelf. Now
they are.
The Convention allows countries to claim sovereignty over
their Continental Shelf far out into the ocean beyond 200
nautical miles from shore. The relevant area for the United
States is probably more than 1.5 times the size of Texas. In
fact, we believe it could be considerably larger.
U.S. oil and gas companies are now ready, willing, and able
to explore this area. But they have made it clear to us that
they need the maximum level of international legal certainty
before they will or could make the substantial investments--
and, we believe, create many jobs in doing so--needed to
extract these far-offshore resources.
If we were a party to the Convention, we would gain
international recognition of our sovereign rights, including by
using the Convention's procedures, and therefore be able to
give our oil and gas companies this legal certainty. Staying
outside the Convention, we simply cannot.
The second development concerns deep seabed mining, which
takes place in that part of the ocean floor that is beyond any
country's jurisdiction. Now for years, technological challenges
meant that deep seabed mining was only theoretical. Today's
advances make it very real.
But it is also very expensive. And before any company will
explore a mine site, it will naturally insist on having a
secure title to the site and the minerals that it will recover.
The Convention offers the only effective mechanism for gaining
this title, but only a party to the Convention can use this
mechanism on behalf of its companies.
So as long as the United States is outside the Convention,
our companies are left with two bad choices--either take their
deep sea mining business to another country or give up on the
idea. Meanwhile, as you heard from Senator Kerry and Senator
Lugar, China, Russia, and many other countries are already
securing their licenses under the Convention to begin mining
for valuable metals and rare earth elements.
As you know, rare earth elements are essential for
manufacturing high-tech products like cell phones and flat-
screen televisions. They are currently in tight supply and
produced almost exclusively by China.
So while we are challenging China's export restrictions on
these critical materials, we also need American companies to
develop other sources for these materials. But as it stands
today, they will only do that if they have the secure rights
that can only be provided under this Convention. If we expect
to be able to manage our own energy future and our need for
rare earth minerals, we must be a party to the Law of the Sea
Convention.
The third development that is now urgent is the emerging
opportunities in the Arctic. As the area gets warmer, it is
opening up to new activities, such as fishing, oil and gas
exploration, shipping, and tourism. This Convention provides
the international framework to deal with these new
opportunities. We are the only Arctic nation outside the
Convention.
Russia and the other Arctic States are advancing their
Continental Shelf claims in the Arctic while we are on the
outside looking in. As a party to the Convention, we would have
a much stronger basis to assert our interests throughout the
entire Arctic region.
The fourth development is that the Convention's bodies are
now up and running. The body that makes recommendations
regarding countries' Continental Shelves beyond 200 nautical
miles is actively considering submissions from over 40
countries without the participation of a U.S. commissioner.
The body addressing deep seabed mining is now drawing up
the rules to govern the extraction of minerals of great
interest to the United States and American industry. It simply
should not be acceptable to us that the United States will be
absent from either of those discussions.
Our negotiators obtained a permanent U.S. seat on the key
decisionmaking body for deep seabed mining. I know of no other
international body that accords one country and one country
alone, us, a permanent seat on its decisionmaking body. But
until we join, that reserved seat remains empty.
So those are the stakes for our economy, and you will hear
from Secretary Panetta and General Dempsey that our security
interests are intrinsically linked to freedom of navigation. We
have much more to gain from legal certainty and public order in
the world's oceans than any other country.
U.S. Armed Forces rely on the navigational rights and
freedoms reflected in the Convention for worldwide access to
get to combat areas, sustain our forces during conflict, and
return home safely, all without permission from other
countries.
Now as a nonparty to the Convention, we have to rely on
what is called customary international law as a legal basis for
invoking and enforcing these norms. But in no other situation
in which our security interests are so much at stake do we
consider customary international law good enough to protect
rights that are vital to the operation of the United States
military.
So far, we have been fortunate. But our navigational rights
and our ability to challenge other countries' behavior should
stand on the firmest and most persuasive legal footing
available, including in critical areas such as the South China
Sea.
I am sure you have followed the claims countries are making
in the South China Sea. Although we do not have territory
there, we have vital interests--particularly freedom of
navigation. And I can report from the diplomatic trenches that,
as a party to the Convention, we would have greater credibility
in invoking the Convention's rules and a greater ability to
enforce them.
Now I know a number of you have heard arguments opposing
the Convention, and let me just address those head on. Critics
claim we would surrender U.S. sovereignty under this treaty,
but in fact, it is exactly the opposite. We would secure
sovereign rights over vast new areas and resources, including
our 200-mile Exclusive Economic Zone and vast Continental Shelf
areas extending off our coasts and at least 600 miles off
Alaska.
I know some are concerned that the treaty's provisions for
binding dispute settlement would impinge on our sovereignty. We
are no stranger to similar provisions, including in the World
Trade Organization, which have allowed us to bring trade cases,
many of them currently pending, against abusers around the
world. As with the WTO, the United States has much more to gain
than lose by being able to hold others accountable under clear
and transparent rules.
Some critics invoke the concern we would be submitting to
mandatory technology transfer and cite this and President
Reagan's other initial objections to the treaty. You know,
those concerns might have been relevant decades ago, but today,
they are not.
In 1994, negotiators made modifications specifically to
address each of President Reagan's objections, including
mandatory technology transfer, which is why President Reagan's
own Secretary of State, George Shultz, has since written that
we should join the Convention in light of those modifications
having been made.
Now some continue to assert we do not need to join the
Convention for U.S. companies to drill beyond 200 miles or to
engage in deep seabed mining. That is not what the companies
say. So I find it quite ironic--in fact, somewhat bewildering--
that a group, an organization, an individual would make a claim
that is refuted by every major company in every major sector of
the economy that stands to benefit from this treaty.
Under current circumstances, the companies are very clear.
They will not take on the costs and risk these activities under
uncertain legal frameworks. They need the indisputable,
internationally recognized rights available under the treaty.
So, please, listen to these companies, not to those who have
other reasons or claims that are not based on the facts.
These companies are refuting the critics who say, ``Go
ahead. You will be fine.'' But they are not the ones, the
critics, being asked to invest tens of millions of dollars
without the legal certainty that comes with joining the
Convention.
Now some mischaracterize the payments for benefit of
resource rights beyond 200 miles as ``a U.N. tax''--and this is
my personal favorite of the arguments against the treaty--that
will be used to support state sponsors of terrorism. Honestly,
I don't know where these people make these things up. But
anyway, the Convention does not contain or authorize any such
taxes.
Any royalty fee does not go to the United Nations. It goes
into a fund for distribution to parties of the Convention, and
we, were we actually to join the Convention, would have a
permanent veto power over how the funds are distributed. And we
could prevent them from going anywhere we did not want them to
go.
I just want to underscore this is simple arithmetic. If we
don't join the Convention, our companies will miss out on
opportunities to explore vast areas of Continental Shelf and
deep seabed. If we do join the Convention, we unlock economic
opportunities worth potentially hundreds of billions of dollars
for a small-percentage royalty a few years down the line.
I have also heard we should not join this Convention
because ``it is a U.N. treaty,'' and of course, that means the
black helicopters are on their way. Well, the fact that a
treaty was negotiated under the auspices of the United Nations,
which is, after all, a convenient gathering place for the
countries of the world, has not stopped us from joining
agreements that are in our interests.
We are party to dozens of agreements negotiated under the
U.N. auspices on everything from counterterrorism and law
enforcement to health, commerce, and aviation. And we often pay
fees under those treaties, recognizing the benefits we get
dwarf those minimal fees.
And on the national security front, some argue we would be
handing power over the U.S. Navy to an international body. This
is patently untrue and, obviously, absolutely contrary to any
history or law governing our Navy. None of us would be sitting
here if there were even a chance that you could make the most
absurd argument that could possibly lead to that conclusion.
Disputes concerning U.S. military activities are clearly
excluded from dispute settlement under the Convention. And
neither is it true that the Convention would prohibit
intelligence activities. The intelligence community has once
again in 2012, as it did in 2007, as it did in 2003, confirmed
that is absolutely not true.
So whatever arguments may have existed for delaying U.S.
accession no longer exist and truly cannot be even taken with a
straight face. The benefits of joining have always been
significant. But today, the costs of not joining are
increasing.
So much is at stake, and I, therefore, urge the committee
to listen to the experts, listen to our businesses, listen to
the Chamber of Commerce, listen to our military, and please
give advice and consent to this treaty before the end of this
year.
Thank you, Mr. Chairman.
[The prepared statement of Secretary Clinton follows:]

Prepared Statement of Secretary of State Hillary Rodham Clinton

Mr. Chairman and members of the committee, it is a great pleasure
for me to testify today on the Law of the Sea Convention, which I
regard as critical to the leadership and security of the United States.
Joining the Convention and the 1994 Agreement that modifies its deep
seabed mining provisions is a priority for the Department of State and
for me personally.
U.S. interests are deeply tied to the oceans. No country is in a
position to gain more from the Law of the Sea Convention than the
United States:

As the world's foremost maritime power, the United States
benefits from the Convention's favorable freedom of navigation
provisions. These are the provisions that enable our vessels to
transit the maritime domain--including the high seas,
international straits, and the exclusive economic zones and
territorial seas of other countries.
Our economy depends on international trade, and the United
States benefits from the global mobility that those
navigational provisions accord to commercial ships of all
nations.
We have the world's second-longest coastline, so the United
States benefits greatly from the Convention's favorable
provisions on offshore natural resources. The treaty accords
sovereign rights over natural resources within a 200-mile
Exclusive Economic Zone. The United States is further
advantaged by provisions in the treaty that allow the
Continental Shelf--and oil and gas rights--to extend beyond 200
miles in certain areas. Off the north shore of Alaska, our
Continental Shelf could extend 600 miles into the Arctic.
American companies are equipped and ready to engage in deep
seabed mining. But the United States can only take advantage of
the Convention's provisions that accord security of tenure to
mine sites in areas beyond national jurisdiction as a party to
this treaty. The Convention, which was modified to meet U.S.
demands, accords the United States a guaranteed seat on the key
decisionmaking body.

It is no wonder then that there is such a strong and wide-ranging
coalition supporting U.S. accession. The U.S. military has consistently
and unequivocally supported the Convention for its national security
benefits. Affected U.S. industries, including shipping, fisheries,
telecommunications, and energy, have consistently supported U.S.
accession for its economic benefits. Nongovernmental organizations
concerned with the protection of natural resources have consistently
supported U.S. accession. And both Republican and Democratic Presidents
have supported U.S. accession. I have never seen another treaty with
such intensive and broad support.
Furthermore, no treaty has been as thoroughly scrutinized by the
Senate as the Law of the Sea Convention. This committee has twice
examined it and sent it to the full Senate. Four other committees held
hearings in 2004, including the Senate Armed Services Committee, of
which I was a member. In 2007, the Foreign Relations Committee held two
additional hearings and another favorable vote. Every conceivable
question has been asked and answered.
As President George W. Bush said in 2007, joining the Convention
will serve the national security interests of the United States, secure
U.S. sovereign rights over extensive marine areas, promote U.S.
interests in the health of the oceans, and give the United States a
seat at the table where rights essential to our interests are debated
and interpreted. We need to get off the sidelines and start taking
advantage of the great deal that the Convention offers the United
States and our business community.

HISTORY

By looking at the history that led to the adoption of the
Convention and the 1994 Agreement on deep seabed mining, we can see how
beneficial the Convention is to American interests. The United States
became party to a group of earlier law of the sea treaties in 1958. We
are still bound by them today. A number of the provisions in the 1982
Convention are the same as the provisions in these 1958 treaties. But
the 1958 treaties left some important issues unresolved, and some of
their provisions are outdated and have been supplanted by more
favorable provisions for the United States in the 1982 Convention.
For example, the 1982 Convention established for the first time a
maximum breadth of the territorial sea, an issue of critical importance
to U.S. freedom of navigation. The 1982 Convention provides for
exclusive jurisdiction of coastal States over economic activities out
to 200 miles from shore. It also sets forth a procedure for providing
legal certainty regarding the Continental Shelf. Both of these
additions are critically important to U.S. economic interests in the
oceans.
These and other benefits of the 1982 Convention came about because
the United States played a prominent role in negotiating this treaty,
beginning in the Nixon administration. The Law of the Sea Convention,
as adopted in 1982, represented a victory for U.S. navigational,
economic, and other interests. Only one important issue area was
flawed--deep seabed mining--and that one area is why President Reagan
decided not to sign the 1982 Convention. I will discuss these flaws in
greater depth below.
All the other aspects of the treaty were so favorable that
President Reagan announced in 1983 that the United States accepted, and
would act in accordance with, the Convention's balance of interests
relating to traditional uses of the oceans--everything but deep seabed
mining. He instructed the entire United States Government to abide by
the commitments, to exercise the rights set forth in the Convention and
to encourage other countries to do likewise.
President Reagan believed that the deep seabed mining chapter of
the 1982 Convention would deter future development of deep seabed
mining; establish a decisionmaking process that would not reflect or
protect American interests; allow amendments to enter into force
without U.S. approval; require mandatory transfers of technology; allow
national liberation movements to share in the benefits of deep seabed
mining and not assure access of future qualified miners.
President Reagan's concerns were well placed and shared by many of
our allies. Like the United States, many industrialized countries
declined to become party to the Convention as originally adopted.
President Reagan did not oppose all international regulation of mining
in the portion of the seabed beyond national jurisdiction. Indeed, U.S.
policy extending back to President Nixon has taken the view that such
mining should be subject to international administration, primarily to
enable companies to obtain secure title to mine sites in the deep
ocean. U.S. law, specifically the Deep Seabed Hard Mineral Resources
Act of 1980 (Public Law 96-283), also reflects that approach.
With the end of the cold war, international support grew for a more
efficient and market-oriented system. This spurred an initiative by the
administration of President George H.W. Bush in the early 1990s to
undertake a new round of negotiations with the aim of fundamentally
overhauling the deep seabed mining provisions of the 1982 Convention.
President Bush's efforts succeeded. The Part XI Agreement, adopted
in 1994, modifies the Convention so as to satisfy each of President
Reagan's objections. As a result, the present, modified Convention:

Ensures that market-oriented approaches are taken to the
management of deep seabed minerals (e.g., by eliminating
production controls);
Scales back the structure of the organization that
administers deep seabed mining;
Provides the United States, once it becomes a party, with a
guaranteed, permanent seat on the Seabed Council--which would
ensure that U.S. approval would be necessary for any decision
that would result in a substantive obligation on the United
States, or that would have financial or budgetary implications;
Ensures that the United States, once it becomes a party,
could veto and block the adoption of any amendment to the deep
seabed mining provisions that it opposes;
Deletes the objectionable provisions on mandatory technology
transfer;
Ensures that the United States, once it becomes a party,
would be able to veto any decision relating to the sharing of
benefits; and
Provides assured access for any future qualified U.S. mining
companies.

The United States signed the Agreement on the deep seabed mining
provisions in 1994. As George P. Shultz, Secretary of State to
President Reagan, said in a letter to Senator Lugar in 2007: ``The
treaty has been changed in such a way with respect to the deep sea-beds
that it is now acceptable, in my judgment. Under these circumstances,
and given the many desirable aspects of the treaty on other grounds, I
believe it is time to proceed with ratification.'' Indeed, every former
Secretary of State since Secretary Shultz, Democrat and Republican
alike, has called for the United States to secure and advance our
national interests by joining the Convention.
The Convention, as modified by the 1994 Agreement, came into force
in 1994, and since has been joined by the industrialized countries that
shared U.S. objections to the initial deep seabed mining chapter. There
are now 162 parties to the Convention, including almost all of our
traditional allies.
The administration of George W. Bush strongly supported the
modified Convention in testimony before this committee in 2003 and
2007. Bush administration officials worked closely with the committee
to develop a proposed Resolution of Advice and Consent, which this
administration continues to support.

BENEFITS

What are the benefits to joining the Law of the Sea Convention? To
put it plainly, joining this Convention will bolster U.S. national
security and provide economic benefits, including the creation of
American jobs. U.S. companies, business groups, labor unions, the U.S.
Navy, the U.S. Coast Guard, the Joint Chiefs of Staff, and a host of
others support joining the Convention now.
I'd like to take a few minutes to talk about the national security
benefits. As the world's foremost maritime power, our security
interests are intrinsically linked to freedom of navigation. We have
more to gain from legal certainty and public order in the world's
oceans than any other country. Our forces are deployed throughout the
world and need guaranteed mobility on, over, and under the world's
oceans. U.S. Armed Forces rely on the navigational rights and freedoms
reflected in the Convention for worldwide access to get to combat
areas, sustain our forces during conflict, and return home safely,
without permission from other countries.
In this regard, the Convention secures the rights we need for U.S.
military ships, and the commercial ships that support our forces, to
meet national security requirements in four major ways:

By limiting coastal States' territorial seas to 12 nautical
miles;
By affording our military and commercial vessels and
aircraft necessary passage rights, not requiring permission,
through other countries' territorial seas and archipelagoes, as
well as through straits used for international navigation (such
as the critical right of submarines to transit submerged
through such straits);
By setting forth maximum navigational rights and freedoms
for our vessels and aircraft in the Exclusive Economic Zones of
other countries and in the high seas; and
By affirming the authority of U.S. warships and government
ships to board stateless vessels on the high seas, which is
vital to our maritime security, counternarcotic, and
counterproliferation efforts and operations, including the
Proliferation Security Initiative.

As a nonparty to the Convention, the United States must rely on
customary international law as a legal basis for invoking and enforcing
these norms. But it is risky to assume that customary law will preserve
these norms forever. There are increasing pressures from some coastal
States to augment their control over the activities of other nations'
vessels off their coasts in a manner that would alter the balance of
interests struck in the Convention.
Joining the Convention would secure our navigational rights and our
ability to challenge other countries' behavior on the firmest and most
persuasive legal footing, including in critical areas such as the South
China Sea and the Arctic. Only as a party to the Convention can the
United States best protect the navigational freedoms enshrined in the
Convention and exert the level of influence that reflects our status as
the world's foremost maritime power.
The highest levels of our Nation's military have expressed their
solid and unwavering support for joining this Convention over and over
again.
Now I'd like to focus on economic benefits. Joining the Convention
would advance U.S. economic and resource interests in ocean waters and
seabed. For example,

The Convention is the foundation on which rules for
sustainable international fisheries are based. For that reason,
the U.S. fishing industry supports U.S. accession.
The Convention secures the rights for commercial ships to
export U.S. commodities and protects the tanker routes through
which half of the world's oil moves. For that reason, the U.S.
shipping industry supports accession.
The Convention's provisions protect the laying and
maintaining of fiber optic cables through which the modern
world communicates, for both commercial and military purposes.
For that reason, the U.S. telecommunications industry supports
accession.

There are two additional areas of economic benefits that deserve
special mention: the provisions related to mineral resources in the
seabed of our Continental Shelf and resources in the seabed beyond any
country's Continental Shelf.
The Convention provides for an Extended Continental Shelf, beyond
200 nautical miles from shore, if certain criteria are met. A coastal
State can exercise sovereign rights over its Extended Continental
Shelf, including exploration, exploitation, conservation, and
management of nonliving resources, such as oil, gas, and other energy
and mineral resources, and of living, ``sedentary'' species, such as
clams, crabs, and sponges. The size of the U.S. Continental Shelf--just
the portion beyond 200 miles from shore--is probably more than one and
one-half times the size of Texas, and could be considerably larger than
that. For this reason, the U.S. oil and gas industry, including the
American Petroleum Institute, are in favor of joining the Convention.
Much is at stake in the vast areas of Continental Shelf beyond 200
nautical miles from shore, and the Convention's procedures enable
Parties--and only Parties--to fully secure their sovereign rights
therein.
Unlike the 1958 law of the sea treaty on the Continental Shelf,
this Convention contains a detailed definition of the Continental Shelf
and well-defined procedures for a country to establish the outer limits
of its Continental Shelf. Specifically, Parties to the Convention enjoy
access to the expert body whose technical recommendations provide the
needed international recognition and legal certainty regarding
Continental Shelf areas beyond 200 nautical miles.
The ability to gain international recognition of a coastal State's
sovereignty over the Continental Shelf resources beyond 200 miles from
shore was a major achievement in the 1982 Convention for the United
States and for other coastal States with an Extended Continental Shelf.
International recognition is necessary for the legal certainty that
will allow oil and gas companies to attract the substantial investments
needed--and create the many jobs--to extract these far-offshore
resources.
More than 40 countries have made submissions regarding their
Continental Shelves beyond 200 nautical miles to the expert Commission.
Sixteen States, including Russia, Brazil, Australia, France, Indonesia,
and Mexico, have received recommendations from the Commission and are
proceeding to establish the outer limits of their Continental Shelves.
As a nonparty, the United States is sitting on the sidelines while this
happens.
The second economic benefit I would like to highlight relates to
mining in the deep seabed areas beyond any country's jurisdiction. Only
as a party to the Convention could the United States sponsor U.S.
companies like Lockheed Martin to mine the deep seabed for valuable
metals and rare earth elements.
These rare earth elements--essential for cell phones, flat-screen
televisions, electric car batteries, and other high-tech products--are
currently in tight supply and produced almost exclusively by China.
While we challenge China's export restrictions, we must also make it
possible for U.S. companies to develop other sources of these critical
materials. They can only do this if they can obtain secure rights to
deep seabed mine sites and indisputable title to minerals recovered.
While we sit on the sidelines, companies in China, India, Russia, and
elsewhere are securing their rights, moving ahead with deep seabed
resource exploration, and taking the lead in this emerging market.
I want to make two additional points about deep seabed mining.
First, we cannot rely on customary international law here. For
companies to obtain security of tenure to deep seabed mining sites,
they must be sponsored by a party to the Convention. And without such
security of tenure, industry has told us that it will not risk the
significant investment needed to extract these valuable resources. I
want to be clear that there is no means for the United States to
support its domestic deep seabed mining industry as a nonparty.
Second, once the United States becomes a party, we would have an
unprecedented ability to influence deep seabed mining activities
worldwide. In revising the Convention's deep seabed provisions in the
1994 Agreement, our negotiators obtained a permanent U.S. seat on the
seabed Council. This is the key decisionmaking body established by the
Convention on deep seabed matters. I know of no other international
body that accords one country, and one country only--the United
States--a permanent seat on its decisionmaking body. In this way, the
Convention's institutions provide the United States with a level of
influence commensurate with our interests and global standing.
Until we join, however, our reserved seat remains empty. As a
result, we have limited ability to shape the rules and no ability to
help U.S. companies pursue their job-creating initiatives to exploit
deep seabed resources.
Other Benefits
We should also join the Convention now to steer its implementation.
The Convention's institutions are up and running, and we--the country
with the most to gain or lose on law of the sea issues--are sitting on
the sidelines. As I mentioned, the Commission on the Limits of the
Continental Shelf has received submissions from over 40 countries
without the participation of a U.S. commissioner. Recommendations made
in that body could create precedents, positive and negative, on the
future outer limit of the U.S. shelf. We need to be on the inside to
protect and advance our interests. Moreover, in fora outside the
Convention, the provisions of the Convention are also being actively
applied. Only as a party can we exert the level of influence that
reflects our status as the world's foremost maritime power.
Are there any serious drawbacks to joining this Convention?
Opponents of the treaty believe there are, but they are mistaken.

Some critics assert that joining the Convention would
impinge upon U.S. sovereignty. On the contrary, joining the
Convention will increase and strengthen our sovereignty. The
Convention secures the United States an expansive Exclusive
Economic Zone and Extended Continental Shelf, with vast
resources in each. U.S. accession would lock-in our rights to
all of this maritime space.
Some say that the Convention's dispute resolution provisions
are not in the U.S. interest. On the contrary, these
procedures--which the United States sought--help protect rather
than harm U.S. interests. As in many other treaties, including
free trade agreements, such procedures provide the United
States with
an important tool to help ensure that other countries live up
to their obligations. And U.S. military activities will never
be subject to any form of dispute resolution.
Other critics have suggested that the Convention gives the
United Nations the authority to levy some kind of global tax.
This is also untrue. There are no taxes on any individuals,
corporations, or anyone else under the Convention.

CONCLUSION

As Senator Lugar has said, to oppose this Convention on economic
grounds requires one to believe that U.S. industries as diverse as oil
and gas, fishing, shipping, seabed mining, and telecommunications do
not understand how best to grow their businesses, create jobs, and
protect their bottom lines.
And to oppose this Convention on national security grounds requires
one to believe that the Departments of Defense and Homeland Security do
not understand how best to protect U.S. national security.
The United States is long past due in joining this Convention. Our
global leadership on maritime issues is at stake. I therefore urge the
committee to give its swift approval for U.S. accession to the Law of
the Sea Convention and ratification of the 1994 Agreement, and urge the
Senate to give its advice and consent before the end of this year.

The Chairman. Well, Madam Secretary, thank you for very
important testimony. And I particularly appreciate the detail
that you went into. I think it was very helpful.
Mr. Secretary.

STATEMENT OF HON. LEON E. PANETTA, SECRETARY OF DEFENSE, U.S.
DEPARTMENT OF DEFENSE, WASHINGTON, DC

Secretary Panetta. Chairman Kerry, Senator Lugar,
distinguished members, I want to thank you for the opportunity
to appear here as the first Secretary of Defense to testify in
support of the United States accession to the Law of the Sea
Convention.
I have been involved with ocean issues most of my career,
and I strongly believe that accession to this treaty is
absolutely essential not only to our economic interests, our
diplomatic interests, but I am here to say that it is extremely
important to our national security interests as well.
I join a lot of the military voices of the past and present
that have spoken so strongly in support of this treaty. The
fundamental point is clear. If the United States is to assert
its historical role as a global maritime power--and we have
without question the strongest navy in the world. But if we are
going to continue to assert our role as a maritime power, it is
essential that we accede to this important Convention.
Being here with Secretary Clinton, Chairman Dempsey, their
presence alone is a testament to the conviction of our
diplomatic and military leadership that this Convention is
absolutely essential to strengthening our position in the
world. Let me outline some of the critical arguments with
regards to U.S. national security and why it is time to move
forward with this issue.
First of all, as has been pointed out, as the world's
strongest preeminent maritime power, we are a country that has
one of the longest coastlines and one of the largest Extended
Continental Shelves in the world. We have more to gain by
approving this Convention than almost any other country.
There are 161 countries that have approved. We are the only
industrial power that has failed to do that, and as a result,
we don't have a seat at the table.
If we are sitting at this international table of nations,
we can defend our interests. We can defend our claims. We can
lead the discussion in trying to influence treaty bodies that
develop and interpret the Law of the Sea. We are not there. And
as a result, they are the ones that are developing the
interpretation of this very important treaty.
In that way, we would ensure that our rights are not
whittled away by the excessive claims and erroneous
interpretations of others who would give us the power and
authority to support and promote the peaceful resolution of
disputes within a rules-based order.
Second, we would secure our navigational freedoms and
global access for military and commercial ships, aircraft, and
undersea fiber optic cables. Treaty law remains the firmest
legal foundation upon which to base our global presence, as the
Secretary has pointed out. And it is true on, above, and below
the seas. By joining the Convention, we would help lock in
rules that are favorable to our freedom of navigation in our
global mobility.
Third, accession would help secure a truly massive increase
in our country's resource and economic jurisdiction. Not only
to 200 nautical miles off our coast, but to a broad, Extended
Continental Shelf beyond that zone, adding almost another third
to our Nation in terms of jurisdiction.
Fourth, accession would ensure our ability to reap the
benefits, again as the Secretary has pointed out, of the
opening of the Arctic. Joining the Convention would maximize
international recognition and acceptance of our substantial
Extended Continental Shelf claims in the Arctic. And, as again
pointed out, we are the only Arctic nation that is not a party
to this Convention.
More importantly, from our navigation and military point of
view, accession would secure our freedom of navigation, our
freedom of overflight rights throughout the Arctic. And it
would strengthen the freedom of navigation arguments with
respect to the northern sea route in the Northwest Passage.
And finally, let me say that we at the Defense Department
have gone through an effort to develop a defense strategy for
the future. A defense strategy not only for now, but into the
future as well. And it emphasizes the strategically vital arc
that extends from the Western Pacific and Eastern Asia into the
Indian Ocean region and South Asia on to the Middle East.
By not acceding, we undercut our credibility in a number of
focused multilateral venues that involve that arc I just
defined. We are pushing, for example, for a rules-based order
in the region and the peaceful resolution of maritime and
territorial disputes in the South China Sea, in the Strait of
Hormuz and elsewhere. How can we argue--how can we argue that
other nations must abide by international rules when we haven't
joined the very treaty that codifies those rules?
We would also help strengthen worldwide transit passage
rights under international law, and we would further isolate
Iran as one of the few remaining nonparties to the Convention.
These are the key reasons from a national security point of
view for accession, reasons that are critical to our
sovereignty, critical to our national security.
Again, as the Secretary pointed out, I understand the
arguments that have been made on the other side. But at the
same time, I don't understand the logic of those arguments. The
myth that somehow this would surrender U.S. sovereignty,
nothing could be further from the truth.
Not since we acquired the lands of the American West and
Alaska have we had such an opportunity to expand U.S.
sovereignty. The estimated Extended Continental Shelf is said
to encompass at least 385,000 square miles, 385,000 square
miles of seabed. As the Secretary pointed out, it is 1.5 times
the size of Texas that would be added to our sovereignty, that
would be added to our jurisdiction.
Some claim that joining the Convention would restrict our
military operations and activities or limit our ability to
collect intelligence in territorial seas. Nothing could be
further from the truth.
The Convention in no way harms our intelligence collection
activities. In no way does it constrain our military
operations. On the contrary, U.S. accession to the Convention
secures our freedom of navigation and overflight rights as
bedrock treaty law.
Some allege that the Convention would subject us to the
jurisdiction of international courts and that this represents a
surrendering of our sovereignty. Once again, this is not the
case. The Convention provides that a party may declare it does
not accept any dispute resolution procedures for disputes
concerning military activities, and we would do the same, as so
many other nations have chosen likewise to do. Moreover, it
would be up to the United States to decide precisely what
constitutes a military activity, not others.
Others argue that our maritime interdiction operations
would be constrained, and again, this is simply not the case.
The United States and our partners routinely conduct a range of
interdiction operations based on U.N. Security Council
resolutions.
On treaties, on port state control measures, and on the
inherent right of self-defense, the United States would be able
to continue conducting the full range of maritime interdiction
operations. In short, the Law of the Sea Convention provides a
stable, recognized legal regime that we need in order to
conduct our global operations today and in the future. Frankly,
I don't think this is a close call.
The Law of the Sea Convention is supported, as pointed out,
by major U.S. industries, by the Chamber of Commerce, by our
energy, oil, shipbuilding, shipping, and communications
companies, by our fishing interests, and by environmental
organizations, along with past and present Republican and
Democratic administrations, strong bipartisan majorities of
this committee, and the entire national security leadership.
By finally acceding to the Convention, we help make our
Nation more secure and more prosperous for generations to come.
America is the strongest power in the world. We have the
strongest navy. And make no mistake, we have the ability to
defend our interests anytime, anywhere. But we are strong
precisely because we play by the rules--because we play by the
rules.
For too long, the United States has failed to act on this
treaty. For too long, we have undermined our moral and
diplomatic authority to fight for our rights and our maritime
interests. And for too long, we have allowed our inability to
act to impair our national security.
For that reason the time is now for the Senate to do what
others have failed to do, join the Law of the Sea Convention
and help us remain the strongest maritime power in the world.
Thank you.
[The prepared statement of Secretary Panetta follows:]

Prepared Statement of Secretary of Defense Leon E. Panetta

Chairman Kerry, Senator Lugar, distinguished members. I want to
thank you for the opportunity to testify in support of United States
accession to the Law of the Sea Convention.
I'm pleased to be here with Secretary Clinton and Chairman
Dempsey--their presence here is a testament to the conviction of our
diplomatic and military leadership that accession to this Convention
will greatly strengthen America's position around the world.
As many of you know, I've long been passionate about oceans policy,
and the need to develop and protect our maritime resources for this
country, for ourselves, for our children and for future generations.
One of my proudest accomplishments as a Member of Congress was
establishing the Monterey Bay National Marine Sanctuary. Recently,
before I took the jobs in this administration, I had the honor to chair
the Pew Oceans Commission, and later cochaired a Joint Oceans
Commission Initiative with Adm. Jim Watkins--both commissions confirmed
the importance of our oceans--but more importantly both strongly
supported accession to the Law of the Sea Convention.
For nearly two decades, the Department of Defense's civilian and
military leadership has shown sustained, consistent, unequivocal
support for the Law of the Sea Convention. And I am pleased to be the
first Secretary of Defense to convey such support in hearing testimony.
Today, I join the Department's many voices past and present that have
spoken so strongly in support. The fundamental point is clear: if the
United States is to fully assert its historic role as a global leader,
it must accede to this important Convention.
The Law of the Sea Convention is the bedrock legal instrument
underpinning public order across the maritime domain. We are the only
permanent member of the U.N. Security Council that is not a party to
it. This puts us at a distinct disadvantage when it comes to disputes
over maritime rights and responsibilities with the 162 parties to the
Convention, several of which are rising powers.
The basic idea of the Convention is to establish some basic rules
of the road--to define what can be done, where, in the world's oceans.
More precisely, it provides for:

The legal divisions of maritime space and accompanying
rights of innocent passage through territorial waters;
Transit passage through vital international straits;
High seas freedoms of navigation, and overflight, and other
internationally lawful uses of the sea related to those
freedoms in the Exclusive Economic Zone, and beyond; and
Sovereign immunity to warships, naval auxiliaries and other
government vessels and aircraft.

In other words, it reflects what has been the longstanding practice
of our military and gives the United States the international
foundation to promote, project and protect its global role as the
world's leading maritime power.
Let me further outline why I believe this Convention is critical to
U.S. national security in today's strategic context, why it is time to
move forward, and why the longer we delay, the more we undermine our
national security interests.
The United States is at a strategic turning point after a decade of
war. Yet, even as these wars recede, we face a challenging and complex
global security environment. We confront multiple transnational threats
including violent extremism, the destabilizing behavior of nations like
Iran and North Korea, military modernization across the Asia-Pacific,
and turmoil in the Middle East and North Africa. At the same time, we
are dealing with the changing nature of warfare, the proliferation of
nuclear, biological, and chemical weapons and technology, and the
growing threat of cyber intrusion.
The fact is that these real and growing challenges are beyond the
ability of any single nation to resolve alone. That is why a key part
of our new defense strategy is to meet these challenges by modernizing
our network of defense and security partnerships across the globe, and
supporting a rules-based international order that promotes stability.
And that is also why the United States should be exerting a leadership
role in the development and interpretation of the rules that determine
legal certainty on the world's oceans.
Let me give you five important reasons as to why joining this
Convention would provide enhanced national security.
First, as the world's preeminent maritime power, and the country
with one of the longest coastlines and largest Extended Continental
Shelf, we have more to gain from accession to the Convention than any
other country.
If we are not at the table, then who will defend our interests? Who
will lead the discussion to influence the further development and
interpretation of the Law of the Sea? It is only by being there to
protect our rights that we would ensure that our sovereignty is not
whittled away by the excessive claims and erroneous interpretations of
others. It would give us the power and credibility to support and
promote the peaceful resolution of disputes within a rules-based order.
Second, by joining the Convention, we can secure our navigational
freedoms and global access for military and commercial ships, aircraft,
and undersea fiber optic cables. As it currently stands, we are forced
to assert our rights to freedom of navigation through customary
international law, which can change to our detriment. Treaty law
remains the firmest legal foundation upon which to base our global
presence, on, above, and below the seas. By joining the Convention, we
would help lock in rules favorable to freedom of navigation and our
global mobility.
Third, accession would bring legal certainty to a truly massive
increase in our country's resource and economic jurisdiction, not only
to 200 nautical miles off our coasts, but to a broad Extended
Continental Shelf beyond that zone.
Fourth, accession would ensure our ability to reap the benefits of
the opening of the Arctic--a region of increasingly important maritime
security and economic interest. We already see countries testing new
shipping routes and exploring for natural resources as Arctic ice cover
recedes. Joining the Convention would maximize international
recognition and acceptance of our substantial Extended Continental
Shelf claims in the Arctic. As we are the only Arctic nation that is
not a party to the Convention, we are at a serious disadvantage in this
respect. Accession would also secure our navigation and overflight
rights throughout the Arctic, and strengthen our arguments for freedom
of navigation through the Northwest Passage and Northern Sea Route.
Fifth, and finally, our new defense strategy emphasizes the
strategically vital arc extending from the Western Pacific and East
Asia into the Indian Ocean region and South Asia. Becoming a party to
the Convention would strengthen our position in this key area. For
example, numerous countries sit astride critical trade and supply
routes and propose restrictions on access for military vessels in the
Indian Ocean, Persian Gulf, and the South China Sea. The United States
has long declared our interests and respect for international law,
freedom of navigation, and peaceful resolution of disputes. We have
demonstrated our commitment to those interests through our consistent
presence and engagement in these critical maritime regions.
By not acceding to the Convention, we give up the strongest legal
footing for our actions. We undercut our credibility in a number of
Asia-focused multilateral venues--just as we're pushing for a rules-
based order in the region and the peaceful resolution of maritime and
territorial disputes in the South China Sea and elsewhere. How can we
argue that other nations must abide by international rules when we
haven't joined the treaty that codifies those rules?
At the other end of this arc sits the Strait of Hormuz, a vital sea
lane of communication to us and our partners. We are determined to
preserve freedom of transit there despite Iranian threats to impose a
blockade. U.S. accession to the Convention would help strengthen
worldwide transit passage rights under international law and help to
further isolate Iran as one of the few remaining nonparties to the
Convention.
These are the key reasons for accession, which is critical to our
sovereignty and our national security. That is why I fail to understand
the arguments opposed to the treaty.
First, some have put forward the myth that the Law of the Sea
Convention would force us to surrender U.S. sovereignty. Nothing could
be further from the truth. Not since we acquired the lands of the
American West and Alaska have we had such an opportunity to expand U.S.
sovereignty.
Second, there are some who claim that accession to the Convention
will restrict our military's operations and activities, or limit our
ability to collect intelligence in territorial seas. Quite simply, they
are wrong. The Convention in no way harms our intelligence collection
activities or constrains our military operations. On the contrary, U.S.
accession to the Convention secures our freedom of navigation and over-
flight rights as bedrock treaty law.
Third, some allege that in joining, our military would be subject
to the jurisdiction of international courts--and that this represents a
surrendering of U.S. sovereignty. But once again, this is not the case.
The Convention provides that a party may declare it does not accept any
dispute resolution procedures for disputes concerning military
activities. This election has been made by 20 other nations that have
joined the Convention, and the United States would do the same. The
bottom line is that neither U.S. military activities nor a U.S.
decision as to what constitutes a U.S. military activity would be
subject to review by any international court or tribunal.
Fourth, some argue that certain military activities--specifically,
our ability to conduct maritime interdiction operations--will be
constrained because the Convention only recognizes the right of
warships to board ships suspected of engaging in piracy, the slave
trade or being stateless. Again, this is simply not the case. The
United States and our partners routinely conduct a range of
interdiction operations at sea based on U.N. Security Council
Resolutions, treaties, port state control measures and the inherent
right of self-defense. Further, the Convention expands the range of
interdiction authorities found in the 1958 Law of the Sea Conventions
we've already joined. In short, the United States would be able to
continue conducting the full range of maritime interdiction operations.
In closing, our new defense strategy recognizes our return to our
maritime roots, and the importance to our military of freedom of
navigation and global mobility.
Freedom of navigation is essential for any global power, but
equally applies to all maritime states--everywhere. This Convention
helps ensure that this freedom is preserved and secured through
reasoned, deliberate, international rules which are fully in accord
with the freedom of navigation asserted by the United States around the
world for decades. It provides the stable, recognized legal regime we
need to conduct our global operations today, and in the future.
This Convention is supported by major U.S. industries, the Chamber
of Commerce, our energy, shipbuilding, shipping, and communications
companies, fishing, and environmental organizations--along with past
and present Republican and Democratic administrations, and the entire
national security leadership.
By finally acceding to the Convention, we help make our Nation more
secure and more prosperous for generations to come. America is the
strongest power in the world. We are strong precisely because we play
by the rules. For too long, the United States has failed to act on this
treaty. For too long, we have undermined our moral and diplomatic
authority to fight for our rights and our maritime interests. For too
long, we have allowed our inability to act to impair our national
security. The time is now, for this Senate to do what others have
failed to do: ratify the Law of the Sea Convention.

The Chairman. Mr. Secretary, thank you. Again, also very
important testimony, and we appreciate it very much and respect
the fact you are the first Secretary of Defense to testify in
favor of this treaty.
General Dempsey.

STATEMENT OF GEN MARTIN E. DEMPSEY, CHAIRMAN, JOINT CHIEFS OF
STAFF, WASHINGTON, DC

General Dempsey. Thank you, Mr. Chairman, Senator Lugar,
and other distinguished members of the committee.
I join Secretary Clinton and Secretary Panetta in offering
my support for the Law of the Sea Convention. My voice joins
past and present senior defense leaders to include our Joint
Chiefs of Staff. It echoes every Chairman of the Joint Chiefs
of Staff since the Convention was sent to the Senate in 1994.
This support has been so consistent because of what the
Convention does for our Armed Forces and for our national
security. Joining the Convention would strengthen our ability
to apply sea power. It codifies the navigational rights and
freedoms necessary to project and sustain our military force.
These include the right of transit through international
straits, the right to exercise high seas freedoms in foreign
Exclusive Economic Zones, and the right of innocent passage
through foreign territorial seas. And it reinforces the
sovereign immunity of our warships as they conduct operations.
By contrast, we currently rely on customary international
law and assert it through our physical presence. This plays
into the hands of foreign states that seek to bend the
customary international law to restrict movement on the oceans,
and it puts our warships and aircraft on point to constantly
challenge claims.
We can defend our interests, and we will do that with
military force, if necessary. But the force of arms does not
have to be and should not be our only national security
instrument. Joining the Convention would provide us another way
to stave off conflict with less risk of escalation.
The Convention also offers us an opportunity to exercise
global leadership. Over 160 nations are party to it, as you
have heard, including every permanent member of the U.N.
Security Council and every Arctic nation. Our absence separates
us from our partners and allies. It limits our ability to build
coalitions and work cooperatively to solve these pressing
security problems that face us.
Although the terms of the Convention are favorable to the
United States interests, we are not positioned to further guide
its interpretation nor its implementation. We need to join it
in order to strengthen our leadership role in global maritime
affairs.
To close, America is a maritime nation, both militarily and
economically. Our prosperity and security depend on the bounty
of and access to the world's oceans. By joining the Convention,
our forces would enjoy a firmer legal standing for operations
on, over, and under the world's waters, and it would provide us
an additional tool for navigating an increasingly complex and
competitive security environment.
I look forward to your questions. Thank you.
[The prepared statement of General Dempsey follows:]

Prepared Statement of GEN Martin E. Dempsey

Mr. Chairman, Senator Lugar, and distinguished members of the
committee, I appreciate this opportunity to discuss the military and
security implications of the Law of the Sea Convention.
The United States is a maritime nation--militarily and
economically. We have the world's largest Exclusive Economic Zone and
the world's largest and most capable navy. We stand to benefit from the
additional legal certainty and public order this treaty would provide.
Moreover, this certainty will become increasingly important as the
global security environment becomes more competitive and more complex.
It is with this in mind that I join Secretary Clinton, Secretary
Panetta, the Joint Chiefs, and every Chairman of the Joint Chiefs of
Staff and every Chief of Naval Operations since the Convention was
submitted to the Senate in 1994 in offering my unqualified support for
this treaty.
There are many reasons for this support. I would like to highlight
three.
First, joining the Convention would give our day-to-day maritime
operations a firmer, codified legal foundation. It would enable and
strengthen our military efforts, not limit them.
We currently rely on customary international law and physical
presence to secure global freedom of access. But there is risk in this
approach. Tradition is a shaky basis upon which to rest our national
security and the protection of our forces. Customs can be disputed, and
they can change.
Joining the Convention would provide legal certainty to our
navigational freedoms and legitimacy to our maritime operations that
customary law simply cannot. It would affirm critical navigational
freedoms and reinforce the sovereign immunity of our warships as they
conduct these operations. These include the right of transit through
international straits, the right to exercise high seas freedoms in
foreign Exclusive Economic Zones, and the right of innocent passage
through foreign territorial seas. The Convention would also provide a
stronger legal basis for some important activities such as stopping and
boarding stateless vessels--ships often used by pirates, traffickers,
and terrorists.
Second, joining the Convention would provide a consistent and
effective legal framework for opposing challenges to the rules-based
international order in the maritime domain. Around the globe we are
witnessing nations expanding their naval capabilities. We are also
seeing countries expand their maritime claims--in the direction of
restricting movement on the oceans. Illegitimate expansionism could
become particularly problematic in the Pacific and the Arctic, two
regions whose importance to our security and our economic prosperity
will only increase over the next several decades. The Convention would
provide us an important tool to help stave off jurisdictional creep in
these areas and to resolve future conflicts peacefully and with less
risk of escalation.
Last, being a member of the Convention would better allow the
United States to exercise global security leadership--a critical
component of our global strategy. Our absence from the Convention
separates us from our Partners and allies. It places us in the company
of those who disdain the rule of international law. We are the only
permanent member of the U.N. Security Council and the only Arctic
nation that is not a party to the Convention. As a result, there are
limits to our ability to build coalitions for important international
security efforts.
From the beginning, U.S. negotiators have been involved in the
development of the Convention and have ensured it would both serve and
protect our interests. Not joining the Convention limits our ability to
shape its implementation and interpretation. We will need that
influence if we intend to continue to lead in global maritime affairs.
Now is the time for the United States to join the Convention. We
should not wait. The global security environment is changing. The
Pacific and the Arctic are becoming increasingly important. And some
nations appear increasingly willing to assert themselves and to push
the boundaries of custom and tradition in a negative direction.
This treaty has been thoroughly debated and vetted, and it has
consistently received support from senior defense leaders. We should
become party to the Law of the Sea Convention now and demonstrate our
global maritime leadership.

The Chairman. Thank you very much, General.
As I mentioned earlier, we will be having Chief of Naval
Operations, the Commandant of the Coast Guard, and the
Commanders of the various forces, all of whom are affected by
this, come in and be able to answer questions for Senators.
But General Dempsey, if I could ask you, opponents of the
Convention have argued that U.S. accession is somehow going to
lead to an unacceptable restriction on the U.S. military--
Secretary Panetta addressed this a little bit--suggesting it
would harm our national security. This has been a refrain
repeated in a number of editorials and elsewhere.
I want to ask you some questions about that, if I may?
First of all, do they know something that you don't know?
[Laughter.]
General Dempsey. Well, I can't speak for them, but I know
what I know. And I know that it will not do any of the things
you just suggested.
The Chairman. None?
General Dempsey. None.
The Chairman. And you are certain of that?
General Dempsey. I am certain of that.
The Chairman. And that is shared by every commander of the
various combatant forces?
General Dempsey. It is, sir. You have probably noticed that
I am not exactly dressed exactly as someone who would speak
with authority on the issue of maritime operations. But I am a
student and, in fact, prior to my testimony and even before, I
have made it a point to consult with those who are experts on
this and have become, to the best of my ability, an expert as
well.
The Chairman. President Reagan decided in 1983 that the
Convention's provisions relating to the traditional uses of the
oceans generally confirmed existing maritime law in practice
and fairly balanced the interests of all states. He, therefore,
announced that the United States, including the U.S. military,
will act in accordance with those provisions, notwithstanding
we hadn't ratified it.
Has that policy ever changed since President Reagan first
made the announcement in 1983?
General Dempsey. It has not changed for the United States
military. No, sir.
The Chairman. So in light of the fact, and I ask this of
both the Secretary of Defense and you, as Chairman of the Joint
Chiefs, that we are already following the Convention, would
joining it require the military to make any change in existing
policy or procedure with respect to use of the oceans?
General Dempsey. It would not.
The Chairman. Would it place any restraint whatsoever on
any of our strategic goals?
General Dempsey. It would not.
The Chairman. As Chairman of the Joint Chiefs of Staff, do
you believe that joining the Convention would harm the U.S.
military in any way?
General Dempsey. I believe it would not harm us in any way.
The Chairman. And haven't you expressed, and I think, Mr.
Secretary, you have said that rather than harm us, it would, in
fact, enhance our strategic goals and our interests.
Secretary Panetta. It would. It would give us--it would
give us the opportunity to be able to engage when it comes to
navigational freedoms and navigational rights. We can argue for
those now. We can do what we do. But very frankly, we have
undermined our moral authority by not having a seat at the
table with these nations to make the arguments for these
rights.
The Chairman. I have a letter here from Director of
National
Intelligence Clapper, dated May 16, 2012, in which he confirms
that the Convention would not prohibit intelligence activities
in any way. This is another one of those myths that get thrown
out there.
I want to enter that letter into the record.
But the intelligence community made the same confirmation
to this committee during the Bush administration, did it not,
in 2003 and 2007?
Secretary Panetta. That is correct.
The Chairman. So, General Dempsey and Secretary Panetta, I
ask you each the same question. Do you have any concern or any
belief whatsoever that joining this Convention would harm the
U.S. military's ability to collect intelligence?
Secretary Panetta. Having served in a key intelligence
position and now as Secretary of Defense, this would in no way
inhibit our ability to conduct intelligence operations.
The Chairman. General Dempsey.
General Dempsey. It would not affect our intelligence
operations.
The Chairman. And is it not accurate that the Russians are
about to send their fifth mission up to the Arctic this summer,
and the Chinese are currently laying claims that may, in fact,
impinge on U.S. interests and claims?
Mr. Secretary.
Secretary Panetta. That is correct.
The Chairman. General Dempsey.
General Dempsey. Yes, sir.
The Chairman. And our ability to affect that is, in fact,
enhanced by joining the treaty, is it not?
General Dempsey. As I said, sir, acceding to the Convention
would allow us to have another instrument with which to engage
any nation that would potentially threaten our interests.
The Chairman. Now, Secretary Panetta, we have heard
arguments also that the military doesn't need the treaty
because customary international law gives us the rights we will
need. You addressed this to some degree, the whole issue of
codifying a preference for gunboat diplomacy by not embracing
this treaty.
Can you speak, General Dempsey and Mr. Secretary, since you
are the direct line commanders for sending people into
conflict, how you react to the notion that we should just leave
aside a legal regimen and rely on the fact that we have the
strongest navy and our military force?
Secretary Panetta. Well, look, first and foremost, there is
no question that we have the strongest navy in the world. But
if we are going to engage in gunboat diplomacy everywhere we go
in order to assert our rights, then the end result of that is
going to be conflict, and it could very well jeopardize our
national security if we resort to that as our primary means of
asserting our rights, you know, sending the destroyers in,
sending the carriers in, in order to do that.
The better approach is to have those carriers, have those
destroyers, make very clear the power we have. But then sit
down and engage these other countries in a rules-based format
that allows us to make the kinds of arguments that we have to
make when we engage with 160 other nations as to navigational
rights.
I mean, that is the way we do it. We are strong because we
play by the rules, not because we go against those rules.
The Chairman. And Madam Secretary, I have certainly run
into this in discussions with people, and I think you and I
have discussed. That the lack of our presence in the treaty is,
in fact, thrown at us by various countries today. And they
almost needle us about our inability to assert our rights.
I partly put that in this context. Some opponents of the
Convention say we don't need it in order to get the legal
certainty on the Extended Continental Shelf. We can just get it
by a series of bilateral agreements like Mexico and Russia and
so forth. Could you speak to that?
Secretary Clinton. Well, first, we have not been able to
realize all the potential benefits, because we are not a party
to the treaty. We cannot fully secure our sovereign rights to
the vast resources of our Continental Shelf beyond 200 nautical
miles. We cannot sponsor U.S. companies to mine the deep seabed
for valuable metals and rare earth elements.
We cannot count on what is called customary international
law, that it won't change or it won't be subject to either
being ignored or undermined over time that we cannot control
because we are not taking our seat at the table. We only get
future stability in what the legal framework is if we are a
party to the Convention, and you know, many of the provisions
enshrined in the Convention are very favorable to us.
And finally, to your point directly, Chairman Kerry, we do
find, and I certainly personally find, that when I am, for
example, working on claims in the South China Sea that affect
our treaty allies like the Philippines or Japan or others, the
fact that we are not a party really undermines our position.
And I would bet that there are many in the world who hope
we never are a party, and they can go on and plot the way
forward, set the rules, enforce them as they choose, putting us
further and further at a disadvantage.
The Chairman. Thank you very much.
Senator Lugar.
Senator Lugar. Thank you, Mr. Chairman.
Each of you has been covering the ground that I am about to
cover again. But let me just say that again and again during
testimony in 2004, 2007, we had the thought that the opposition
was not being heard, not being understood. So let me introduce
some of the opposition today so that we have the benefit.
For instance, on the editorial page or B4 of the Washington
Times of Tuesday, May 22, 2012, Frank Gaffney writes about the
situation. He says, ``If, on the other hand, the members of the
U.S. Senate trouble themselves to study, or at least read, the
text of the Law of the Sea Treaty, they would immediately see
it for what it really is: a diplomatic dinosaur, a throwback to
a bygone era when U.N. negotiations were dominated by
Communists of the Soviet Union and their fellow travelers in
the Third World.
``These adversaries' agenda was transparent and wholly
inimical to American equities. They sought to: establish
control over 70 percent of the world's surface; create an
international governing institution that would serve as a model
for bringing national states like ours to heel; and
redistribute the planet's wealth and technology from the
developed world to themselves. LOST codifies such
arrangements--and would subject us to mandatory dispute
resolution to enforce them via stacked-deck adjudication
panels.
``And I would suggest even then Senators will not read the
treaty, nor perhaps other national leaders. So I suggest that
Dick Morris and his wife, Eileen, have just published an
important book that addresses, among other outrages, LOST as a
prime example of the title: `Screwed! How Foreign Countries Are
Ripping Off America and Plundering Our Economy and How Our
Leaders Help Them Do it,' '' and so forth.
Now over on the next page, Ed Feulner writes, ``Without
LOST, we are told, we will not be able to develop the
hydrocarbon resources beneath the Extended Continental Shelf.
Sounds pretty dire at a time of fluctuating prices for gasoline
and other forms of fuel. Fortunately, it is not true. Under
international law and longstanding U.S. policy, we already have
access to these areas.
``Presidents dating back to Harry Truman have issued
proclamations--and Congress has passed laws--establishing
America's maritime laws and boundaries, and no one has
challenged them.''
Now, as you pointed out, we do have a navy, and perhaps
opponents of the treaty would say why get involved in all of
this nonsense? Send the fleet out. Shoot it up. If, in fact,
you have got a problem, what is this navy for?
Now I tried to mention this briefly in my comments, that
even at a 1,000-ship level, the United States cannot cover all
the disputes of the world.
What we ought to have then maybe is an additional hearing
on how many more ships, how much more military spending, and
how much more infrastructure we will need to do it our way and
to say let the rest fly by themselves.
I take your time to listen to all of this because,
essentially, you have presented a very strong case, and people
from industry are going to present a strong case. And they will
be pilloried as capitalists who are looking after their own
stockholders, looking after their own interests once again
without regard to our sovereignty and our ability to address
disputes militarily if pressed to do so.
And I don't know who else will come in. Perhaps we will
have some who will say that peace in the world is important and
that this treaty is an important means to strengthen
international cooperation. But I am afraid they are going to
get short shrift.
How, Secretary Panetta, would you begin to describe the
military problem here? In other words, we do have the Navy, we
are not going to stand by, and we are worried about the South
China Sea. And all of our Asian allies are coming, and we are
placing Marines in Australia, and we are pivoting, as you
described the policy.
But what are the limitations, if there are any, to our
ability to shoot it out?
Secretary Panetta. Well, Senator Lugar, again, I think it
is a question of looking at the facts that we are dealing with.
The fact is that we are dealing with a world in which there are
myriad threats that we confront now. This is--you know, we are
not just dealing with the Soviet Union. We are dealing with
myriad threats.
In the South China Sea with rising powers, in the Pacific
with North Korea, with Iran, with transit in the Strait of
Hormuz, with turmoil in the Middle East, with a whole series of
challenges, not to mention war, not to mention terrorism. All
of those are the threats that we confront.
And the reality is that we are now in a world in which,
frankly, in order to be able to deal with that myriad
challenges, it isn't enough for the United States Navy to go
wandering around the world asserting its strength as a way to
solve that myriad problems and threats I just defined.
The only way we are going to do this in today's world is to
engage in alliances and partnerships, work with other countries
to develop some kind of rules-based approach to dealing with
those threats so that other countries as well understand the
threats they confront and can react to those threats. That is
the kind of world we are part of. That is the kind of world we
live in.
And it is for that reason that the Law of the Seas becomes
important because it is one of those vehicles in which to
engage the world. One hundred sixty nations have acceded to it,
and we say the hell with them, we are not going to participate
in that. Then 160 nations are going to determine what happens
in terms of the Law of the Sea, and we won't be there.
So that is the reason from a national security point of
view, from a very practical point of view, from the point of
view of what is in the best interests of the United States,
that we have to accede to this Convention so that we are part
of a rules-based international order.
We say that every time we go--we argue with Iran. Every
time we argue with North Korea, we argue on the basis that they
are not abiding by international rules. They are not abiding by
the international standards that we have established.
And here we are, trying to make the same argument with
regards to navigation, and we aren't even a member of the
Convention. That is the reason we need to accede to this
Convention.
Senator Lugar. Thank you.
The Chairman. Let me just say, since there are a few
seconds left, Senator Lugar, that neither President Truman's
proclamation nor any act of Congress has ever delineated the
outer edge of the Extended Continental Shelf of the United
States. And currently, other countries can prohibit the United
States from coming into an ECS. We can't because we are not a
party to the treaty.
So the only way to protect that outside of this is to
accede to the treaty. And finally, no company is going to put
millions of dollars into the effort to go out and do the mining
or do the drilling if they don't have the legal certainty
protection of the treaty.
So there are further reasons in answer to Mr. Feulner. But
we will have Mr. Feulner in here, and we will have others who
oppose it and have a chance to explore this.
Senator Menendez.
Senator Menendez. Thank you, Mr. Chairman, for beginning
this series of hearings, which I think are incredibly
important.
A couple of years ago, I chaired the beginning of one of
these on your behalf, and I think it is even more important
today than it was then. And I appreciate all of our
distinguished witnesses and their service to our country.
General Dempsey, when you took an oath as the Chairman of
the Joint Chiefs of Staff and when you took an oath to the
service that you originally joined from which you come, you
took an oath to protect the United States of America. Is that
not correct?
General Dempsey. I did, sir.
Senator Menendez. And is there anything in this treaty that
you believe undermines the oath that you took both in your
service, as well as the Chairman of the Joint Chiefs of Staff?
General Dempsey. There is not.
Senator Menendez. So you believe that the treaty clearly
continues to allow for you, on behalf of all of those of the
different services who serve this country, to protect and
defend the United States of America and doesn't undermine any
of those abilities?
General Dempsey. It protects our ability to do what we need
to do for this country.
Senator Menendez. Thank you very much.
Secretary Panetta, do you have any concerns that this
treaty would impinge on either the rights or ability of you, as
the Secretary of Defense, to protect the air, sea, or land
territory of the United States? Or conversely, would the treaty
impact the ability of the Department of Defense or the service
branches to navigate or engage in freedom of navigation
operations?
Secretary Panetta. No, it would not. It would enhance our
ability to be able to navigate because we would be able to be
at the table to protect our interests and protect our claims.
Senator Menendez. In fact, doesn't this treaty, if we were
to ratify it, give us the wherewithal to extend our reach to a
third more than the territory that we have beyond the 200 miles
Exclusive Economic Zone? Is that a correct statement?
Secretary Panetta. That is absolutely correct.
Senator Menendez. In recent months, as I am sure many of
you know, I have been following Iran with a laser-like focus.
In these past few months, we have heard Iran threaten to close
the Strait of Hormuz in response to United States and European
Union sanctions.
Beyond our own ability to respond in the national interest
and security of the United States, which the administration
made very clear at the time when that threat took place, my
understanding of the treaty is that such an action by Iran
would have violated the treaty because of the treaty's
guarantee of the right of innocent passage even in a nation's
territorial waters and even for United States military
vehicles--vessels, I should say. Is that a correct statement?
Secretary Panetta. That is a correct statement.
Senator Menendez. The other thing that I focus a great deal
on in our subcommittee role is proliferation of narcotics
trafficking, as well as the proliferation of weapons of mass
destruction. What benefits would the United States derive from
joining the treaty with respect to countering and interdicting
narcotics and the proliferation of weapons of mass destruction
to and from state and nonstate actors of proliferation concern,
such as Iran and Syria?
For example, would joining the treaty advance interdiction
efforts under the Proliferation Security Initiative, such as
providing a basis for taking action against vessels suspected
of engaging in proliferation activities?
General Dempsey. Right now, sir, as you know, we use
customary international law to assert our right to visit. This
would be documented in the Convention of the Law of the Sea and
preserve the right of visit, which would enhance our use of the
Proliferation Security Initiative.
Senator Menendez. Do we believe that joining the treaty
would help our efforts to bring countries into the
Proliferation Security Initiative and further undertake our
efforts in needed interdiction efforts?
Secretary Clinton. I believe it would, Senator. I think
joining the Convention would likely strengthen the PSI by
attracting new cooperative partners.
Senator Menendez. Now, finally, this treaty has allowed for
us, on a provisional basis, to participate and influence the
work of various entities, such as the Commission on the Limits
on the Continental Shelf and the International Seabed
Authority, the body that regulates the exploration,
development, exploration of international areas beyond national
jurisdiction, such as oil, gas, and nonliving resources under
the seabed and subsoil.
However, because we have not ratified the treaty, we have
been relegated to observer status on the Commission. What
impact has the failure to ratify had on our ability to
influence the actions on the Continental Shelf Commission and
the international seabed activity?
Secretary Clinton. Well, Senator, first of all, there are a
number of observers who actually view this Convention as a huge
win for the United States. In fact, it is called by some ``the
U.S. land grab'' because of what it would mean for our ability
to extend jurisdiction far beyond our shores.
But unfortunately, our failure to accede to it limits our
capacity to do so. We believe the seabed mining body's action
on rules for mining, coming up in 2013, is something that we
would heavily influence and would certainly influence in favor
of our interests and our companies, if we were to accede by
then.
So the Convention bodies that are determining the rules are
proceeding without us, and we are on the sidelines and do not
have the authority needed to do much more than try to wave our
arms and get attention to make points. But we would have direct
influence and we would have, as I said in my testimony, what
amounts to a veto because of the consensus rules if we were
actually present.
Senator Menendez. So, clearly, because a gift of God allows
us access to the Atlantic, Pacific, Arctic, and gulf
territorial waters, it is in our security interests, our energy
interests and private sector interests to ratify this treaty.
Is that a fair statement?
Secretary Clinton. That is an absolutely fair statement.
Senator Menendez. Thank you very much.
The Chairman. And if I could just augment that by saying,
Senator, that because of Guam, because of the Hawaiian Islands,
because of the Aleutians, we have an extraordinary reach, which
is why there is such a breadth here to what is available to us,
which is unique.
No other country in the world has as significant an
extended zone as we do, and we are not taking advantage of
that.
Senator Corker.
Senator Corker. Thank you, Mr. Chairman.
And thank each of you for your testimony and service to our
country.
And Secretary Clinton, I noticed you enjoyed your testimony
more than most. I don't know if it is because January is just
around the corner or not, but you seem very happy today, and I
am glad to have you here.
You know, I have been around here a while now, and this is
sort of a Lazarus moment. This thing has been around for 30
years. We are in the middle of a pretty contentious
Presidential race, and we have a treaty that is coming up that
both majority leaders on the Democratic side and Republican
side have not wanted to bring to the floor.
So I have my antenna up slightly. I do want everybody to
know that I begin in a neutral place. I, too, want to make my
decision on this treaty based on facts and not myths and
certainly plan to go about learning as much as I can about the
facts of where this treaty places our Nation.
So I listened to the testimony, and again, I enjoyed all
three of you. I am listening to cases being made about oil. And
at the depths of exploration we are talking about, we are
talking about really big oil. And I just find it interesting. I
don't think this is a pejorative comment. The administration
has not particularly been a great fan of big oil.
As a matter of fact, we have restricted our own lands to
their access in many ways. So I just find it an interesting
point that is being made by an administration that has been
anything but ``friendly'' to big oil, why all of a sudden on
this particular treaty, such a big deal is being made out of
that? And if you could just answer me briefly, Secretary
Clinton, I would appreciate it.
Secretary Clinton. Well, Senator Corker, I am always happy
when I am appearing before this committee and back in the
Senate. So thank you for the warm welcome.
You know, I really believe that the United States has an
opportunity in developing our natural resources, which we are
currently doing, particularly with unconventional gas and the
steps and progress that we are making in that arena, which are
extremely important to our future.
Yes, there are discussions and debates over where to do it,
in whose backyard and the like. But we are making progress, and
for the first time in many years, we actually are a net
exporter. And as someone who spends a lot of my time promoting
American jobs around the world and finding how interested
people are in perhaps being able to import from us, I think
that is all to the good.
It is also important that we take advantage--that we have
the opportunity to take advantage of what may be possible in
the future. I don't want to close the door on anything. And
that is what I fear we are doing. It is the opportunity cost of
not acceding to the Convention now.
I am not an expert in oil and gas exploration and drilling.
But what the oil and gas industry tells us is that they are now
in a position to take advantage of this; actually, our majors
are among the very limited number of such companies anywhere in
the world.
And to shut the door on their ability to do that I just
don't think is economically smart. So I think if you look at
the whole picture, we are positioned well, and I want us to
continue to be so in the future.
Senator Corker. So second point, I know the administration
has tried to push legislation relating to carbon, and I know
cap and trade was discussed for a while. And that obviously
didn't pass muster here in the Senate, and so the EPA has taken
steps to, in many ways, make pieces of that happen through
regulation.
One of the things that the treaty does do is regulate
pollution in the ocean from land-based sources, and one of the
things you didn't mention in the comments about some of the
negativity toward the treaty is a lot of people believe--and
again, I am asking the question after reading, and I am not
saying I am one of those. But a lot of people believe that the
administration--my antenna is up--that the administration wants
to use this treaty as a way to get America into a regime
relating to carbon since it has been unsuccessful doing so
domestically. And I wonder if you might respond to that?
And if the treaty, in your opinion, does put us in a
situation either to respond to international regimes or to be
subject to lawsuits from people because of carbon that is
emitted from the United States affecting the ocean bed?
Secretary Clinton. Senator, I know some have been
concerned, and I appreciate your raising it that somehow the
Convention is a backdoor Kyoto protocol. It is our legal
assessment that there is nothing in the Convention that commits
the United States to implement any commitments on greenhouse
gases under any regime.
And it contains no obligations to implement any particular
climate change policies. It doesn't require adherence to any
specific emission policies, and we would be glad to present for
the record a legal analysis to that effect.
Senator Corker. How do we exit this treaty? Is there a way
to--you know, typically treaties have ways of exiting. And
again, briefly, I want to ask one other question. How would one
exit this treaty if we became a party to it?
Secretary Clinton. Again, I will submit it to the record,
but it is my understanding that just as we accede to certain
treaties, we can end our accession or our membership. There is
no continuing obligation to be a member of a treaty that you
freely joined.
[The written response from the State Department follows:]

During Secretary Clinton's May 23, 2012 testimony before the Senate
Committee on Foreign Relations, you asked for more information on the
Law of the Sea Convention's provisions that permit a party to withdraw
from the Convention. You also asked about the relationship between the
Convention and U.S. climate change policy. Please find our analysis
below on both of these issues.
withdrawal from the law of the sea convention
Withdrawal by a State party from the Law of the Sea Convention is
governed by Article 317, entitled ``Denunciation.''
Article 317 provides that a State party may withdraw from the
Convention at any time. It is not necessary to indicate a reason for
denunciation. Denunciation takes effect 1 year after providing written
notification.
Article 317 is similar to withdrawal provisions found in other
treaties to which the United States is a party.

CLIMATE CHANGE

The Law of the Sea Convention is an oceans treaty, not a climate
treaty. Joining the Convention would not require the United States to
implement the Kyoto Protocol or any other particular climate change
laws or policies, and the Convention's provisions could not
legitimately be argued to create such a requirement.
Part XII of the Convention addresses the marine environment.
``Pollution of the marine environment'' is defined in Article 1,
paragraph 4. Even if one assumed, for the sake of argument, that (1)
Part XII applied to the issue of climate change; (2) ``pollution of the
marine environment'' existed within the meaning of Article 1(4); (3)
there was a causal link between a Party's GHG emissions and such
pollution; and (4) other requirements were satisfied, Part XII would
still not require a Party to adopt particular climate laws or policies.
Part XII's arguably relevant provisions are either extremely
general (e.g., Article 194) or expressly do not require a Party to
implement any particular standards.

Articles 207 and 212 call on Parties merely to ``tak[e] into
account internationally agreed rules, standards and recommended
practices and procedures.''
Articles 213 and 222, which are the ``enforcement''
analogues to Articles 207 and 212, would likewise not require
the United States to adopt or enforce particular standards
related to climate change. The ``enforcement'' section of Part
XII allocates responsibilities among flag States, coastal
States, and port States, depending upon the source/type of
marine pollution in question. Adoption and enforcement of laws
in relation to Articles 207 and 212 fall within the domain of
the State concerned. However, even if these articles applied to
climate change, they would not require adoption/enforcement of
Kyoto or other climate rules or standards. There are simply no
such international rules and standards relating to climate
change applicable to the United States.

The Convention would also not provide a forum for challenging U.S.
climate change policies.

Domestically, the Convention could not be invoked in court;
it does not create rights of action or other enforceable
individual legal rights in U.S. courts. (See declaration 24 of
the draft resolution of advice and consent and the Committee
Report of December 19, 2007, at page 18.)
Internationally, dispute resolution is not open to
individuals or groups, only States Parties. Were a State Party
to seek to challenge U.S. climate policies under the guise of a
``marine environment'' dispute, the Convention's dispute
settlement procedures would not be available.

Because of the sensitivities of coastal States concerning
their land-based (and certain other) activities, the
Convention sets forth limitations on the obligations
related to marine pollution that could be subject to
dispute resolution.
Specifically, Article 297(1)(c) sets out the exclusive
bases upon which a coastal State would be subject to
dispute resolution for pollution of the marine environment.
Among other things, there would need to be a ``specified''
international rule or standard ``applicable'' to the
coastal State. As noted, no provision of the Convention
``applies'' international rules or standards to the United
States in this area, much less a ``specified'' one. As
such, it would not be possible to invoke the dispute
resolution procedures to challenge the United States in
relation to climate change.
Were a State Party to seek to invoke the Framework
Convention on Climate Change (to which the United States is
a Party) as the basis for a challenge under the LOS
Convention, Articles 280 and 281 of the Convention would
further preclude recourse to the Law of the Sea
Convention's dispute resolution procedures. (These Articles
provide that Parties can choose to resolve disputes by
means of their own choosing, including through other
agreements. The Framework Convention on Climate Change
already contains provisions for dispute settlement, and
those provisions do not entail any legally binding
procedures between Parties unless the Parties agree on such
procedures.)

Thus, the Convention would not obligate the United States to have
in place any particular climate laws or policies, and it would not
subject U.S. climate change approaches to dispute resolution.
U.S. agencies, including the Coast Guard, EPA, and the Justice
Department, have been acting in accordance with Part XII of the
Convention since President Reagan directed the U.S. Government to abide
by the bulk of the Convention's provisions. Were the United States to
become a Party to the Convention, U.S. agencies would implement Part
XII under existing laws, regulations, and practices. This was confirmed
in a March 1, 2004, letter to Chairman Lugar from William H. Taft IV,
the State Department's Legal Adviser during the Bush administration.
The letter provided, in pertinent part: ``The United States, as a
Party, would be able to implement the Convention through existing laws,
regulations, and practices (including enforcement practices), which are
consistent with the Convention and which would not need to change in
order for the United States to meet its Convention obligations.''
We stand by the Taft letter.

Senator Corker. And then, last, is this treaty subject to
the typical resolution of ratification that happens in the
Senate when treaties are--that is correct?
Secretary Clinton. Yes, that is correct.
Senator Corker. There is some language that stipulates no
changes. But you are saying the Senate has the ability to put
stipulations upon our entrance?
Secretary Clinton. We always have a resolution for
ratification that is prepared. I think there was one prepared
in past times when it didn't get to the floor, but it was
certainly part of the preparation work leading up to a
potential vote.
Senator Corker. OK. And on that note, and this is not
directed at you in any way. We did have a resolution of
ratification under the START Treaty, and I know we have had
some conversations about this in the past. And I know that
there are pieces of this that are outside the jurisdiction of
the State Department.
But I will say that I think the gentlemen on either side of
you, I know the gentleman to your left, mentioned many times
that the modernization of our nuclear armaments is very
important to our Nation, especially if we are going to be
reducing the numbers of those. And I want to say one more time
in every public setting that I can, and I know this is not the
State Department, but that resolution has not been honored.
And for what it is worth, it is not a really good way to
build trust with folks on future treaty resolution. So, again,
none of this is directed at you, but the types of
modernizations at Sandia and Los Alamos and Pantex and other
places have been waiting for, and military leaders and civilian
military leaders have said is very important, has not occurred,
per the resolution of ratification.
Not directed at you, but just to say that it is not the
kind of thing that builds a lot of faith in those resolutions.
Secretary Clinton. If I could respond, Senator, because I
know this is a continuing concern of yours. And for the record,
I just want to state that in FY12, the administration did live
up to the obligations that we agreed on by requesting $7.629
billion for NNSA weapons activities.
Congress did not appropriate that full amount, instead
appropriating only $7.214 billion. That did create a shortfall.
So, in FY 2013, we continued to honor our commitments by
requesting $7.6 billion. That is $363 million, or 5 percent,
above the amount appropriated by Congress for FY12.
It is one of the very few accounts in the entire Government
to receive an increase of this size. And we would like to work
with Congress to be able to have everybody on the same page
concerning this.
Senator Corker. Well, I will close with that if it is OK. I
appreciate that. And yet, this year, that request was not made.
And I want to say that the resolution states that if those
funding requirements are not met, it is incumbent upon the
administration to come forth with a report showing how that
affects the overall process.
That has not happened. And again, none of that is directed
at you. It is directed overall at the administration. But it
does creation problems as it relates to overall trust issues.
I thank you all for your testimony and look forward to the
future hearings.
Secretary Clinton. And Senator, I take very seriously this
concern of yours. We will be submitting the 9(b) report
shortly.
The Chairman. Thank you, Senator Corker.
Senator Cardin.
Senator Cardin. Well, Mr. Chairman, let me thank all of our
witnesses. I found your presentations to be as comprehensive a
presentation that I have ever received on the treaty, and I
thank you for that. I thank you for particularly addressing the
criticisms that have been made about this treaty, but of
course, it is typical of any treaty that we hear some of these
complaints.
I want to go into an issue that I think, Secretary Clinton,
you alluded to. And that is that this is not a static
situation. It is changing, changing all the time. And there are
now groups that are meeting that will affect U.S. interests
that we are not a party to. We don't have our representative
there.
The Law of the Sea is changing because of the treaty. And
there is now discussion as to what should be the appropriate
use of sea-lanes, and where should the mineral rights in the
future go, what should be the international regime for dealing
with some of these issues? And the United States, of course, is
perhaps the most significant player in these issues, and yet
our interests are not being represented as these types of
changes are being debated.
Can you just elaborate a little bit more as to what type of
discussions are currently taking place that we truly are not
part of, we are not involved, as far as having our
representative at the table during these discussions, that
could very much affect U.S. companies, could affect the
commercial operations, could affect all the interests that you
have mentioned?
Secretary Clinton. Well, Senator, you are absolutely right
with respect to demarcating, claiming, and asserting sovereign
jurisdiction over the Continental Shelf, that is ongoing.
Countries are doing that. As has been already said, we stand to
gain more than any country in the world, and we have not done
so.
Going beyond the Extended Continental Shelf, which is of
great importance to us, are the rules on deep seabed mining
that will influence whether a number of the supporters of the
treaty--Senator Kerry mentioned one, Lockheed Martin--who are
interested in the rare earth minerals, can participate. Because
in the absence of setting the right rules and then being a
party to the treaty, it may or may not be as advantageous to us
as it should be.
We have a seat on that body, and we are not filling it.
So we will really only have ourselves to hold responsible
if the bodies that are now gearing up and working under this
Convention begin to make decisions that are not in our
interest.
And I think Secretary Panetta made a great comment. You
know, we like to use our military power to promote our national
security. We have a lot of economic interests at stake here
that will be very hard for us to exercise, even with the
largest, most professional military in the world, if we don't
get in under the Convention's rules. And we have a chance still
to shape those rules.
Senator Cardin. Normally, on these international treaties
and organizations, the U.S. participation is looked upon
internationally with great importance, because it adds to the
comprehensive nature of the organization. You mentioned the
Arctic area. Without having the United States, you're missing
one of the key players in the Arctic. So I know that there are
strong international interests for us to become a party to the
treaty.
But I would expect that there is some interest in other
countries that are saying, we hope you don't ratify this
treaty. After all, it gives our companies a better edge on some
of these issues and puts us in a stronger position on some of
the economic and legal issues, as it affects U.S. operations.
Am I correct? I assume that there is strong international
support for U.S. interests, but in some respects, they may be
saying, if you don't want to take advantage of it, we will fill
the void.
Secretary Clinton. Well, the United States was certainly
among the relatively small group of nations that drove the
treaty in the first place, and then led the modifications in
1994 to make sure that nothing in the treaty would be adverse
to our interests.
And so we have a lot at stake. We have already invested a
lot in it. I think most of the world wants to see us accede,
because they know that with the United States as the principal
driver of a rules-based international system, our being inside,
helping to devise and execute those rules, is in their
interests as well.
But I have to agree with you, Senator, that there are
nations who would be perfectly happy to be in the driver's seat
instead of us, and we're letting them be in the driver's seat,
by our failure to be party to the Convention.
Senator Cardin. We just had the NATO summit in Chicago, and
one of the issues that was raised pretty vocally by this
committee is that we want our NATO partners to carry out their
responsibility. The responsibility for international security
should rest with all of our partners, not just principally with
one country, the United States.
And, Secretary Panetta, it seems to me that our allies have
to have some concern about the U.S. participation in this
treaty, as it relates to the coordination of our security
issues, as it relates to the sea.
Secretary Panetta. That's absolutely correct. We sit down
with these countries. We develop strategies. We develop plans.
We develop military operations. We develop naval operations,
working with them as well.
And if we are not operating based on the same rules, it
puts us at a disadvantage.
I am sure this is true for Secretary Clinton, but I can't
tell you--I've been in meetings with both those that are
considered our allies as well as those that are considered our
competitors, and make the argument with regards to navigational
rights, make the argument with regards to our ability to
exercise rights in the open seas.
And they have said in these meetings, how can you even
assert that when you are not even--have acceded to the Law of
the Seas Convention? That has been thrown right in our face.
And I am sure they would love to continue to have that
argument. That is the concern.
Senator Cardin. It does make our arguments for parity that
much more difficult, particularly when there really is, as you
have all pointed out, it is hard to defend an argument as to
why we have taken so long and why we have not, in fact,
ratified the treaty.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator.
Senator Risch.
Senator Risch. Thank you, Mr. Chairman.
Secretary Clinton, in your opening statement, you addressed
the people who oppose the ratification of the treaty, and
particularly spoke to the ideology and the philosophical
opposition that some people have to this. And I hope you
weren't scoffing at us. I am one of those who fall into that
category, because I have some deep-seated reservations on that
basis.
Indeed, most wars we have fought have been fought over
ideology and philosophy. Indeed, our country was founded on
that, because we had a difference with Great Britain over that.
So I consider that an important point. And to get this down
even narrower, my problem is with sovereignty. There are 288
pages here. And as you read it, there is some good stuff in
here. But if we give up one scintilla of sovereignty that this
country has fought, has bled for, have given up our treasure,
and the best that America has, I can't vote for it.
So I want to talk about a couple of those, and focus on
those, if we can.
First of all, with all due respect, you defended the
opposition, or you challenged the opposition. You said that
there is nothing in here that requires that we do certain
things regarding the Kyoto protocols and environmental-type
things. If you look at article 222, and I am going to quote
from that article, which says that signatories to this treaty,
``shall adopt laws and regulations, and take other measures
necessary, to implement applicable international rules and
standards established to competent international organizations
or diplomatic conference to prevent, reduce, and control
pollution of the marine environment from or through the
atmosphere.''
That has got Kyoto written all over it.
And what it's got written all over it is any time the U.N.
calls a conference or what have you, they all get together,
they all sign onto it, and even though we disagree, by adopting
this treaty, we have said that we will adopt it, even though we
don't agree with that particular treaty.
So with all due respect to the legal interpretations you
say you have, and I have read thousands of pieces of
legislation, this is written in plain English. And I don't know
how you can argue that, after this is adopted by Congress or by
the Senate, if it is, how we're going to get around the fact
that we have agreed that we will adopt these laws and
regulations.
Secretary Clinton. Well, Senator, I join you in being
absolutely, 100 percent, supportive and protective of American
sovereignty. I've spent much of my adult life, in whatever role
I have found myself in, defending and arguing on behalf of our
country and our rights, and I will continue to do so.
But I would strongly argue that, No. 1, our sovereignty
will be considerably enhanced by joining this treaty. And No.
2, with the specific to the question you asked, our reading of
that, and the information about the meaning of it goes back to
the very beginning of the treaty, because we have had American
negotiators at the table from the very beginning, is that there
is nothing in what you read that requires any particular
standards. There is nothing that requires this subject to be
put to dispute settlement. It calls on parties to participate
in discussions, conferences, and the like, concerning
environmental issues that might come to impact the oceans.
And for the record, I will give you a longer written
response, because I really do want to put your mind at ease, as
much as I am able to, because I believe so vehemently that
acceding to this treaty is in America's sovereign interests, or
I would not be sitting here.
[The written response from the State Department follows:]

During Secretary Clinton's May 23, 2012, testimony before the
Senate Committee on Foreign Relations, you discussed the relationship
between the Law of the Sea Convention and climate change. Please find
our analysis below on this issue.

CLIMATE CHANGE

The Convention would also not provide a forum for challenging U.S.
climate change policies.

Because of the sensitivities of coastal States concerning
their land-based (and certain other) activities, the
Convention sets forth limitations on the obligations
related to marine pollution that could be subject to
dispute resolution.
Specifically, Article 297(l)(c) sets out the exclusive
bases upon which a coastal State would be subject to
dispute resolution for pollution of the marine environment.
Among other things, there would need to be a ``specified''
international rule or standard ``applicable'' to the
coastal State. As noted, no provision of the Convention
``applies'' international rules or standards to the United
States in this area, much less a ``specified'' one. As
such, it would not be possible to invoke the dispute
resolution procedures to challenge the United States in
relation to climate change.
Were a State Party to seek to invoke the Framework
Convention on Climate Change (to which the United States is
a Party) as the basis for a challenge under the LOS
Convention, Articles 280 and 281 of the Convention would
further preclude recourse to the Law of the Sea
Convention's dispute resolution procedures. (These Articles
provide that Parties can choose to resolve disputes by
means of their own choosing, including through other
agreements. The Framework Convention on Climate Change
already contains provisions for dispute settlement, and
those provisions do not entail any legally binding
procedures between Parties unless the Parties agree on such
procedures.)

Thus, the Convention would not obligate the United States to have
in place any particular climate laws or policies, and it would not
subject U.S. climate change approaches to dispute resolution.
U.S. agencies, including the Coast Guard, EPA, and the Justice
Department, have been acting in accordance with Part XII of the
Convention since President Reagan directed the U.S. Government to abide
by the bulk of the Convention's provisions. Were the United States to
become a Party to the Convention, U.S. agencies would implement Part
XII under existing laws, regulations, and practices. This was confirmed
in a March I, 2004, letter to Chairman Lugar from William H. Taft IV,
the State Department's Legal Adviser during the Bush Administration.
The letter provided, in pertinent part: ``The United States, as a
Party, would be able to implement the Convention through existing laws,
regulations, and practices (including enforcement practices), which are
consistent with the Convention and which would not need to change in
order for the United States to meet its Convention obligations.''
We stand by the Taft letter.

Senator Risch. Thank you, and I want to see the additional
explanation. I am open-minded on it.
But I tell you, this language is just so black and white
and so straightforward that says America shall adopt laws and
regulations that are in conformance with anything adopted by a
competent international organization.
Well, let's turn to another provision that I have real
difficulty with. As I understand it, since 1776, we have never
ceded our authority, as far as taxing American people or
American companies are concerned. If you read article 82,
subsection 4, it talks about--well, start with article 82. It
talks about us taxing or us requiring a tax of these companies
that operate out in the waters, mining or pumping or what have
you.
Section 4 says the payments or contributions shall be made
through the authority, which shall distribute them to states
parties to this Convention on the basis of equitable sharing
criteria, taking into account the interests and needs of
developing states, particularly the least-developed and
landlocked among them.
Why oh why oh why, as we as Americans, give up our taxing
authority, handing money over to the United Nations to develop
some kind of a formula that we have no idea what it is going to
say, and allowing them to distribute our tax money according to
some formula that is very vaguely set out here? Why would we do
that?
Secretary Clinton. Well, Senator, we're not doing it. And I
can tell you that without fear of contradiction. The Convention
does not provide for or authorize taxation of individuals,
corporations, or otherwise.
There is a royalty arrangement that kicks in after 5 years
of drilling and extraction from the ocean. Payments that would
be related to the Continental Shelf beyond 200 nautical miles
go through, not to, one of the Convention bodies, the Seabed
Authority. They are held there until agreement is reached on
disbursement of the funds, if agreement is ever reached.
The distribution formula has to be agreed to. The United
States, with its permanent seat, would have to agree to it. And
the payments would mean that we were actually extracting
valuable resources from the Extended Continental Shelf. This is
supported by the American oil and gas industry, because it only
applies to such areas beyond 200 nautical miles.
And I would note, too, Senator, there is nothing
unprecedented about payment being made under treaties for
various benefits, because here the benefit is being absolutely,
legally assured of sovereign rights over a vast area of common
ocean, and the legal certainty that comes with that.
And we already make payments to the International
Telecommunications Union, for example, because it helps to
regulate the use of spectrum and associated orbital slots to
protect U.S. radio communications from harmful interference.
So there are precedents that demonstrate why this is in our
interest. Nothing is agreed to, unless everybody in the
Convention agrees to it.
Now standing on the outside, there may be something agreed
to which will later be something we don't like, but we will not
have been able to veto it, which we could if we were on the
inside.
Senator Risch. My time is up. Thank you, Mr. Chairman.
I would just say that I find very little comfort in taking
this seat, as Secretary Panetta talks about, in a group of 160
countries, most of whom don't like us, many of whom hate us.
And us having one vote amongst 160, I think we're going have a
really tough time.
Secretary Clinton. But, Senator, it is a consensus, which
means it has to be unanimous, so our 1 vote counts as much as
159 other votes. And not every country will be represented on
this body, but the United States will be.
Senator Risch. On this particular provision, but there are
others in here that there is not--we don't have a veto
throughout everything that the conference does.
The Chairman. But the point, Senator, is that there is a
veto with respect to the distribution of any money whatsoever.
And I think, as we go forward in this, we will have the legal
experts in who will define precisely how that works. But I
think you will come to see----
Senator Risch. I look forward to that.
The Chairman. We have protected that.
But the other thing I was going to say is the application
of the section that you raised with respect to the ``shall
apply'' is only with respect to if you have already signed up
to an international law that applies with respect to that.
So, in fact, it's not an ad hoc provision that says you
have to go out and adopt this. It is if you have already signed
an international agreement, and we haven't.
Senator Risch. That's not what it says, Mr. Chairman.
The Chairman. Again, I will have a panel of experts who
will come in and clearly define that, because it's very
important.
Senator Risch. No question about that.
The Chairman. And we obviously want you to understand that.
And we want you to be satisfied with respect to that, and I
believe you will be.
But I think it's important to have that done that way.
Senator Boxer is back.
Thank you.
Senator Boxer. Thank you. Forgive me, please, I had to go
deal with the transportation bill, and that's moving ahead very
well, I will tell my colleagues on both sides.
Well, Mr. Chairman and Senator Lugar, thank you so much for
this important hearing.
And I want to say to the panel what an honor it is to be in
the same room with you all. You give every day to your country,

24/7, and we all appreciate it so much.
This is a very important issue, and I thanked the chairman
privately, because we're just late in the game with this, so we
need to make up for lost time.
And Senator Lugar went through the history. I well remember
in 2007, when we voted 17-to-4 to report the Convention to the
full Senate. And as rightly pointed out, it wasn't taken up
because there were threats of filibusters and everything else.
And when you are the majority leader, you want to go to
something you can get done.
So I am hopeful this time we are going to get it done,
because of everything that was said.
The Convention has the unequivocal support of our national
security community, the business community, the tech community,
the oil and gas companies, and environmental groups.
Now, I tell you, it's tough to find that kind of coalition,
but we've got it here.
And here's the puzzling part to me, I say to my colleagues,
that this Convention should bring us together, not tear us
apart.
My chairman has said it's his best opinion that we go for
this after the election. So be it. But I find that kind of
shocking, since, again, I'm confounded that with so much
support, Senators consider this so controversial.
U.S. accession would help give the U.S. Navy maximum
navigational rights in a dangerous world, help protect U.S.
rights in the Arctic, afford greater flexibility to U.S. tech
companies to lay their fiber optic cables under the sea. The
Convention provides mechanisms for peaceful resolution of
disputes.
So the Law of the Sea protects U.S. national interests, and
joining is the right thing to do.
And it brings me to my question for you, Madam Secretary,
and it has to do with China. And we have a little map here, if
people will bear with me. It tells the story.
China has made aggressive claims to a massive portion of
the South China Sea, one of the world's busiest shipping lanes.
The blue lines show a 200-nautical-mile maritime area that
each respective country, such as Vietnam or the Philippines, is
entitled to under the Law of the Sea Convention. It is called,
as was referred to, the Exclusive Economic Zone.
The red line shows what China is claiming for itself. As
you see, it goes far beyond China's own 200-mile Exclusive
Economic Zone. It reaches far into other nation's zones, a
significant territorial grab that comes very close to the land
borders of countries in the region.
Now this dispute has already led to confrontation on more
than one occasion. In fact, just last month, the Chinese Navy
sent surveillance ships to block the efforts of a Philippine
Coast Guard cutter that was trying to stop activities of
Chinese fishermen who were within 200 miles of the Philippine
coastline.
Now, Secretary Clinton, I understand that you have been
personally involved in trying to help resolve territorial
disputes within the South China Sea. And I would ask you this
question: Has the United States failure to join the Convention
had an impact on your efforts to resolve disputes in the South
China Sea? And if you could explain to us why and how.
And I thank you. You did a great job up there.
Secretary Clinton. Well, thank you very much, Senator
Boxer, for raising this issue, because you are right. I am
personally engaged in many bilateral and multilateral
discussions on South China Sea issues.
And the claims that China has made, and I'm not saying
anything other than what I have said repeatedly to the Chinese
themselves, are, in our view, beyond what is permitted under
the Law of the Sea. We are working to try to help to resolve
these disputes peacefully, and particularly to give support to
the countries that are being threatened by these claims.
Yet, as a nonparty to the Convention, we are forced to
advance our interests from a position of weakness, not
strength. As a nonparty, we cede the legal high ground to
China. We put ourselves on the defensive. We're not as strong
an advocate for our friends and allies in the region as I would
like us to be. And I don't think that's anyplace for the
world's preeminent maritime power to find ourselves.
So the common thread, and this is something that Secretary
Panetta stressed, is when I make an argument to the Chinese
about resolving these disputes, I premise it on a rules-based
order in the region, that they cannot have a Chinese rule, they
have to be bound by the treaty obligations and the legal
framework set forth in the Convention. And our credibility and
our strategic position would be strengthened were we a member.
Senator Boxer. Thank you.
My last question I would give to Secretary Panetta. And I
know you spoke about Iranian threats to close the Strait of
Hormuz. You alluded to that. But I have a specific question.
According to the U.S. Energy Information Administration,
they said, ``Hormuz is by far the world's most important
chokepoint due to its daily oil flow with approximately 20
percent of the world's oil traveling through the strait.''
Furthermore, energy analysts say that, ``even a partial
blockage of the strait could raise the world price of oil by
$50 a barrel within days.''
So would you elaborate more on how U.S. accession to the
Law of the Sea Convention could help us address such threats
from Iran?
Secretary Panetta. Senator, for those that have not had a
chance to look at the Strait of Hormuz, it is a very tight area
that is located there. And it is under the Law of the Sea,
there is an international passageway that is allowed, so that
ships can carry oil through the strait.
And it gives us the argument that we absolutely have to
have, which is that we need, in order to protect the world's
oil supply, which goes through the Strait of Hormuz, we have to
do it based on the international rules provided through the Law
of the Sea that allows for transit in that area.
And if Iran were to engage in efforts to block the Strait
of Hormuz, that is the very reason we have made clear that that
is a redline that we would not tolerate. We have to keep that
strait open.
Senator Boxer. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Boxer.
As I recognize Senator Inhofe, let me just say, Senator
Risch, we are already working on and will work, and we want to
work closely with Senators, Senator Inhofe and others, who may
have questions about this, or reservations about it, to
specifically adopt in the resolution of ratification
appropriate reservations and/or understandings and
declarations, and we're working on some of them now.
And I think as this hearing process goes on, and things are
fleshed out where there may be those issues, we are ready to
work with you to do that.
Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
And also, thank you for our conversation we had on the
floor a couple days ago, where you did agree to hold a hearing
with those who are in opposition to the ratification of the Law
of the Sea Treaty, which I am. So I appreciate that very much.
And I remember so well back in 2004, when this committee
passed out the ratification. I believe it was 16 to nothing. It
was unanimous. We looked at it, and at that time, and still
today, I'm a senior member of both the Armed Service Committee
and the Environment and Public Works Committee, and so we had
hearings. And in these hearings, we had witnesses that totally
changed this around, so I really believe that's important. And
I appreciate the fact that you're going to be doing that.
Now in the limited time that we have, I'm going to really
quickly go over two items, then I have a question for Secretary
Panetta and General Dempsey.
First of all, I know you talked about this in my absence
before I came in, because I was watching part of it. If the
United States approves the Law of the Sea Treaty, it would be
forced to transfer billions of dollars in royalties generated
from oil and gas production on the U.S. Extended Continental
Shelf to the U.N. International Seabed Authority for
redistribution to the developing world.
Now, I grant you, in terms of the EEZ, the Exclusive
Economic Zone, this treaty doesn't affect that. And that would
be something we could continue to do.
But outside the 200 nautical miles, allows the ECS--over
which the United States currently enjoys total sovereignty and
has been for as long as I can remember, and, thus, has the
right to exploit all of its natural resources. So the problem
isn't there.
The problem is outside of the 200-nautical-mile radius. We
have appointed, and I have read the work of the U.S.
Interagency Extended Continental Shelf Task Force, that the
resources there may be--talking about how to quantify the
amount of money that we would be losing, whether we say it is
an arrangement or a tax. I think it's a tax if it costs money.
And they have said it would be somewhere between billions
and trillions of dollars that we would not have in the United
States and would be transferred in accordance with the U.N.
International Seabed Authority.
Now the way we arrive at this, and to put this in context,
I would say that between 12 and 18 percent of royalties is
about as much as they are going to allow and still continue to
develop those resources. So the United States would receive in
that area, according to this task force, somewhere between 12.5
percent and 18.75 percent in royalties.
Now the problem with this is, under article 82, the Law of
the Sea Treaty would require the United State to give up, after
a period of time, between 7 and 12 years, about 7 percent of
this. And so if we take the conservative side of what the task
force has said and say just $1 trillion, $1 trillion would
equate to $70 billion that would be royalties that would be
paid to the ISA as opposed to the United States. And of course,
they would go to the organization in Kingston, Jamaica, for
redistribution to the developing world.
And this is the first time in history that an international
organization, the U.N. in this case, would possess taxing
authority over this country.
Now, I've heard the veto argument. And I think that was
discussed by one of the other members here. I think it Senator
Risch.
It is really not too important to discuss that, because
there are two entities that would make that determination. You
have the Council, the 36-member Council. You have the Assembly
that would ultimately make these decisions.
But the point is, under article 160, it is going to cost
us--well, let's see--yes, under article 82, the payments and
contributions shall be made annually with respect to all
production at a site after this period of time. So what we're
saying is, it is going to be paid regardless of where you think
it should go or where you think it is going to go.
The second thing that I want to cover is the environmental
end. You know, we, for 10 years now, have rejected in both the
House and the Senate, but primarily in the Senate, because it
started with the Kyoto treaty, rejecting the cap and trade that
would amount to a tax on the American people of somewhere
between $300 billion and $400 billion. We have rejected this
over and over and over again. There may be, at most, 25
Senators who would vote for a cap-and-trade bill now.
So what they are attempting to do is to do what they
couldn't do through legislation under this treaty. Under this
treaty, any country could sue the United States in the
international tribunal Law of the Sea, not in the United States
courts, I might add, or take the United State before binding
arbitration.
I only say this because already people are out there
planning their lawsuits, and I would also quote from article
212, ``adopt laws and regulations to prevent, reduce, and
control pollution of the maritime environment from or through
the atmosphere,'' if applicable.
Now, what we're talking about there is what they would use
as the basis for the lawsuit. Under the treaty, it says,
``States are responsible for the fulfillment of their
international obligations.''
Well, we know what would happen. In fact, we have
statements by lawyers, trial lawyers around the country, saying
that one of them here is from William C.G. Burns, citing that
the lawsuits would come forth. He named the United States as
the, ``the most logical state to bring action against,''
given--to us.
Now with that, it's understandable why groups such as
Greenpeace and the Natural Resources Defense Council,
Environmental Defense Fund, all have this as their top
priority.
So let's get back to the $70 billion. And the question I
would have would be for Secretary Panetta and for General
Dempsey.
If we are talking about $70 billion, would it be better to
have the $70 billion go to Kingston, Jamaica, to bail out some
of the developing nations, or the following list: The Ohio-
class ballistic missile submarine, which they have been
wanting, that's $3 billion; to maintain the Navy's ship and
aircraft and ground modernization program is $12 billion;
eliminate the Navy's gap by providing 240 F-35 fighters, that's
$3 billion; eliminate the gap in the Ford-class carrier, $11
billion. And again, I say all five of these meet the Navy's
request for six more Aegis ships, that's $12 billion. It adds
up to $70 billion.
General Dempsey, do you think it serves our national
defense better to give that $70 billion to the ISA in Kingston,
Jamaica, or to accomplish these programs?
General Dempsey. Senator, I'm not going to comment on the
hypothetical use of money we don't have. I will tell you that
the budget we submitted supports the strategy we have
developed.
Senator Inhofe. No, what I'm saying is, this is money that
I've documented pretty well, General Dempsey, that would be
there and would be lost through this process.
Now, on these five issues, you are very familiar with all
of them. You know that they have been requested. You know that
there is a gap.
And my question again, is fulfilling those five gaps in the
best interest of our national defense, or sending the money to
Kingston, Jamaica?
General Dempsey. Senator, I will only comment that I
support this Convention on the Law of the Sea because it
enhances my ability to provide security of the maritime domain.
Senator Inhofe. Secretary Panetta.
Secretary Panetta. You know, I share, obviously, the
chairman's viewpoint with regard to why we consider this
important.
But I guess what I would ask, Senator, I know you've come
up with the $70 million.
Senator Inhofe. It's billion.
Secretary Panetta. Or billion. But what about the literally
billions of dollars in economic benefit that would flow from
these companies providing energy and being able to go at our
seabed and provide that part of the economic benefit.
I mean, that's what you have to focus on, is that, yes,
there may be $70 billion that may be paid in royalties, but
what about the economic benefit that these companies would
render to the United States?
Senator Inhofe. The economic benefit, in answer to your
question, Mr. Secretary, would be coming from companies that
are already in this area, the controversial area that I
described, I think in a very exact way.
So if we've been doing it before, but with bilateral
treaties with China, bilateral treaties with Russia, we can
continue to do it, and there would be no loss there. The loss
would be $7 billion, and that would affect our national
security.
And I'm looking forward, Mr. Chairman, to the hearing where
we have those in opposition.
The Chairman. Well, I promised you that, and we'll have
plenty of people here to do that.
But let me just say to you, Senator, with all due respect,
there is no way to contemplate what you just contemplated in
terms of the number, because, first of all, there is no
drilling in the extended shelf.
The royalties only come from extended shelf. They only come
after a certain period of time, and they are in a range of 1
percent up to the high-end, depending on how much you extract.
And there's no way to tell today how much has been extracted.
Senator Inhofe. But the task force has come up with a
figure, and I'm using their figure.
The Chairman. I understand, and we will examine the premise
of it and the nature of the task force and the interests of the
task force and all of those kinds of things. We will look at
all of that.
But the fundamental premise here still remains this: Ronald
Reagan renegotiated this with the oil companies and gas
companies at the table, and they signed on to these royalties,
which are far less than the royalties that they pay today to us
in the Gulf of Mexico or elsewhere. And they pay them into an
international entity that we will have a veto over as to where
or how it may be spent.
Senator Inhofe. And Ronald Reagan opposed this in this last
effort, as you well know.
The Chairman. Well, we'll hear from George Schultz, we'll
hear from some of these people. But I think what is important
here is to recognize you're here protecting companies from
paying a royalty that they want to pay. You're here protecting
companies from being able to drill where they can't drill
without this. So they'd rather have 93 percent of something
than 0 percent of nothing.
Senator Inhofe. But they currently are producing and
they're currently able to do that through bilateral treaties.
Anyway, this will be a subject at the next hearing.
The Chairman. We're going to go through this. They can't do
it, because there is no bilateral treaty that can apply to the
extended shelf. It is only through the international rules that
come through the Law of the Sea that you can do that.
So unless you have this in place, no company is going to
drill. And you will sit here and say why are we importing it
from other places, why are we buying it from other countries
and not drilling it ourselves?
So we are going to have this thoroughly vetted in the
course of the next 2 months. This will be coming out of
everybody's ears and people will be tired of it, and they will
understand it. But we will look at every aspect of that, I
promise you.
And those companies will come in here and themselves tell
you why they are not prepared to invest millions of dollars and
put it at risk without the certainty of the claims that come
through this treaty.
So we'll look forward to that debate.
Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman.
And thank you for holding this hearing, you and Ranking
Member Lugar.
And thank you all for being here.
General Dempsey, at an Atlantic Council forum earlier this
month, you said that the Convention, ``gives us the framework
to counter excessive claims by states seeking to illegally
restrict movement of vessels and aircraft.''
I wonder if you could elaborate a little bit on that and
tell us specifically where we've seen these excessive claims
and how they affect our ability to freely move around in our
seas?
General Dempsey. If I could, Senator, if we were here 20
years ago, we would have all been predicting that growing world
population, the rise of regional powers like China and India,
would place extraordinarily challenging demands for resources,
and that that could become destabilizing. And here we are, 20
years later, and it's playing out.
So the reason I'm supportive of the Convention on Law of
the Sea is that it provides clarity on the definition of
maritime zones, it provides clarity on navigational rights. And
from that clarity comes stability.
And as we now begin to rebalance our security interest into
the Pacific, this becomes very important.
Senator Shaheen. So I appreciate that it's a sensitive
topic to speak to some of those excessive claims, and Senator
Boxer had an interesting map to show what China is looking at
versus other countries in the region, but are we seeing, in
fact, those kinds of claims from China and other countries in
the Pacific that are affecting our freedom of movement in those
areas or that we are concerned might in the future?
General Dempsey. Let me go to ``might in the future,'' as I
said, the demand on resources or the competition for resources
is becoming far more pronounced and could potentially become
far more dangerous. And that is true not just in the South
China Sea, but it's also true in the Arctic.
And I think that being part of a Convention that would help
manage that as another instrument for our use, recognizing we
always have sovereign interests and a military, and a Navy in
particular, that will protect those, I do think that is wise at
this point.
Senator Shaheen. You know, I know we have heard some
objections from some of our colleagues, and I'm sure we are all
getting letters reflecting different perspectives on the
treaty. But I want to read to you something from a letter that
I got from a constituent, and ask you if you could respond to
it.
It says, and I'm quoting from the letter, ``Even the
freedom of navigation provisions add nothing to the existing
customary international law of the sea that seafaring nations,
including United States, have observed for centuries.''
Given that we haven't to date had any major disruptions at
sea, can you respond to that and talk about why the sense now
is that it's imperative to ratify the treaty?
General Dempsey. I can. The customary international law
evolves, and I can give you an example of something on the land
domain in a moment, but it evolves, and it is subject to
individual interpretations.
So threading this back to my earlier answer, the rise of
new nations competing for resources, Brazil, Russia, India,
China, and the list goes on and on, puts us in a position
where, unless we have this Convention with which to form a
basis to have the conversation about resources of the sort you
are talking about, does cause us to be increasingly at risk to
instability.
Now that's my job, instability. The Secretary can speak
eloquently about the economic issues, but I'm speaking about
the security issues.
And so that is what has changed. And I'll give you the
example of the land domain made that I mentioned. We are party
to the Geneva Convention from which we derive our law of armed
conflict. There were plenty of customary international laws
related to the use of force, but we consciously and
deliberately signed on to the Geneva Convention as a mechanism
by which to have this conversation among a community of
nations.
And that is what's different today than was different 20
years ago, this competition for resources, which is migrating
increasingly into the maritime domain.
Senator Shaheen. And thank you, General Dempsey.
As you pointed out, Secretary Clinton, you were very
eloquent in talking about the economic urgency of ratifying the
treaty. And one of the areas you mentioned was the Arctic,
we're the only Arctic nation that hasn't ratified the treaty.
I would point out that there were a lot of people when we
acquired Alaska, which gives us access to the Arctic, there
were a lot of people in this country who thought that was
folly, Seward's Folly, as we remember. And history has shown
very differently.
But can you talk about where we are with respect to the
other countries who have ratified the treaty, who border the
Arctic, and where they are in terms of exploration and any
other activities they may be doing in the Arctic? And how we
compare to that and how much, to what extent we might be left
behind if we don't ratify the treaty?
Secretary Clinton. Well, thank you for that, Senator,
because I actually think that the Arctic is one of these areas
where potential instability as well as economic competition are
going to be played out. The largest single portion of the U.S.
Extended Continental Shelf is in the Arctic, and other Arctic
coastal nations--Russia, Canada, Norway, Denmark/Greenland--are
all in the process of establishing the outer limits of their
Continental Shelves in the Arctic, using the provisions of the
Convention.
I think we all remember Russia going down and planting a
flag under the water, claiming the Arctic. You know, we don't
think that has any force of law, certainly, but it demonstrates
the intense interests in staking a claim in the Arctic.
Further, as the Arctic warms and frees up shipping routes,
it is more important that we put our navigational rights on a
treaty footing and have a larger voice in the interpretation
and development of the rules, because it won't just be the five
Arctic nations.
You'll see China, India, Brazil, you name it, all vying for
navigational rights and routes through the Arctic. And the
framework that we should establish and support is the one based
in the Convention that will help us deal with expanding human
activity in the Arctic, which is why I think that the time is
so pressing for us to make this decision.
Senator Shaheen. Thank you.
Secretary Panetta, did you want to add to that at all?
Secretary Panetta. No, she did it.
Senator Shaheen. OK, thank you, Mr. Chairman.
The Chairman. Thank you, Senator Shaheen.
I think it's an appropriate moment to place in the record,
since we're putting a record together here, a letter from the
commander of the United States Northern Command, General
Jacoby, to Senator Lugar and myself.
And the commander states: ``National security is dependent
on cooperative partnerships, and peaceful opening of Arctic
waters is in the interests of the community of Arctic nations.
The United States is the only Arctic nation that has not
acceded to the Convention. Consequently, the Nation risks being
excluded from strategic discussions for advancing the
Convention with our maritime partners and for resolving
sovereignty, sea boundary, and natural resource issues. Future
defense and civil support scenarios in the maritime domain will
require closely coordinated, multinational military operations
to include the formation of coalition task forces. Our Nation's
accession to the Convention will set the conditions for
partnership and cooperation.''
It goes on and says further things, but I place that in the
record.
Senator DeMint.
Senator DeMint. Thank you, Mr. Chairman.
And thank you for beginning a process of hearings. I
appreciate the panelists and their testimony today.
The fact is that most of the testimony today dealt with
navigation issues and things that affect the Navy on the waters
around the world. That is about 10 pages of the treaty.
And certainly, we need to deal with this. There are a lot
of theoretical advantages that I think that have been
discussed. As has been mentioned, I think by the General, the
United States plays by the rules, and the idea that we get into
a rules-based system with other nations that establish some
international rules of engagement, theoretically, I think we
could have some honest debate on how we come out on that. It
doesn't always come out OK.
I know we brought China into the WTO, because we thought if
we could get them in a rules-based system, then we would have a
fairer system. It hasn't worked out that way.
Only a few months ago, a lot of us here on the panel were
squealing about China manipulating their currency and not
playing by the rules. We know when we try to deal with the U.N.
on sanctions against Iran, not all of the members play by the
rules. They're not always that effective.
And of course, we have a history of arms treaties, when we
go back and find that the other players are not playing by the
rules.
So we could have a reasonable debate that there is a
possibility that when we enter into an agreement with other
nations that don't play by the rules, we could put ourselves at
a disadvantage. We could talk about that later.
The concern I have is almost 300 other pages of the treaty
that has really not been dealt with much today. And just for a
few clarifications, we don't have a veto in the Assembly of
this Convention. We can have a veto in the Council, just a
Sudan has, one of the world's leading sponsors of terror, but
we cannot have a veto in what the Assembly decides as a whole.
And also, the oil companies don't pay the royalties. The
United States does. The treaty specifically says that the State
Members pay that, and the taxpayer will ultimately pay it.
I just want to make a few points, ask a short question.
Of course, 160 other nations want us in this thing. We need
to think that through, because as has been said, maybe we have
a lot to gain, but we will pay more than any other nation that
is part of this agreement, because of the royalties that have
been discussed.
Of course, they want us in this. They also get to help
define the rules of engagement for the U.S. Navy all over the
world. And that may be, theoretically, a good idea, but there's
been a lot of testimony that the international rules of
engagement on the ground for our troops in Afghanistan have put
our folks in harm's way. So we do need to debate that.
And we do know from the treaty that it very clearly
subjects our states, our electric utilities, our businesses, to
environmental lawsuits that will be arbitrated by panels that
could be slanted against us. Because it's very clear from the
treaty, if we have a dispute with another nation, we appoint
two arbitrators, they appoint two arbitrators, and the
Secretary General of the United Nations appoints the fifth.
Those aren't odds I want to deal with when it comes to doing
business in America.
And I would just ask, and we talked about this already, and
it may be directed to the General, because I certainly respect
his advocacy for what he feels like is important to the Navy,
but this treaty is much bigger than that, involves a lot of
other things. And given the fact American oil companies already
leased a lot of land 200 miles out in the gulf to begin
development of that, and we've done that without the Law of the
Sea Treaty.
And we can keep the strait open, and we have committed to
do that whether we are in this treaty or not.
But, General, how is it in the interests of the United
States to turn the royalties over to an unaccountable
international bureaucracy?
And I know Senator Inhofe asked this, but given the fact
that we are facing billions of dollars in shortfalls and cuts
in our military, and this is something that is real money, that
is going to be paid to an international body at a time our
country is almost hopelessly in debt, and it will be
distributed to countries that may be our enemies, like Sudan,
again, I respect your advocacy for the naval aspect of this,
the navigation aspect, but what we're trying to deal with is
the whole treaty, and what it might do as far as cost to the
American taxpayer, cost to American business, and just our
ability to operate freely around the world.
And I know that's a loaded question, but maybe you have an
opinion you would like to swing back at me.
General Dempsey. Well, what I would like to say, sir, is
that the economics of it, I will leave to the economic experts.
But from the security perspective, I would want to have a
further conversation about where in the treaty you see our
rules of engagement or our activities limited, because they're
not limited in any way.
And by the way, sir, we never cede the rules of engagement
on the ground, to include in Afghanistan, to any other nation
on the face of the Earth or any other international
organization.
Senator DeMint. Well, I appreciate that answer, because, on
one hand, I think we're arguing that, hey, we need this for our
military to operate freely around the world in a rules-based
system, and then I hear the treaty allows us, on a military or
defense front, to completely opt out of this thing anytime we
want.
So why do we need to get into all of this in order to be
able to operate our Navy as we have for years around the world?
General Dempsey. Well, I will take a shot at it and maybe
pass it off to either of the Secretaries.
But right now our freedoms of navigation, right now the
description of maritime zones and the freedoms of navigation,
or the rights of navigation, are codified in international
customary law. I'm not comfortable with that any longer,
because of the reasons that I gave to Senator Shaheen, on the
way that the security in the maritime domain is being
challenged by some of the rising powers, by the opening of the
Arctic and other areas around the world, where that customary
international law is now being subjected to individual's
interpretation. So I think it is in our benefit to become part
of that conversation.
Senator DeMint. General, just as a followup, some of those
countries that are interpreting the law are already parties to
the Law of the Sea Treaty. They're not following the rules, or
at least they are arbitrarily interpreting them.
What is going to be different that we are in it? Are they
going to now abide by the rules the way we see them?
My concern is we will abide, but they're already violating
the rules that they have ascribed to. I don't know how this
creates a system of rules that we can count on.
General Dempsey. Go ahead, sir.
Secretary Panetta. Senator, I think the question you have
to ask yourself is whether or not acceding to this Convention
gives us the best of both worlds. It gives us the ability to
protect or military activities. It gives us the ability to
conduct what we have to do in terms of our ability to operate
in the seas. It gives us the ability to avoid any kind of
dispute resolution with regards to military activities.
So it does give us the ability to opt out of that with
which we don't want to participate in.
But at the same time, it gives us the ability to engage
when we have to engage. I mean, better to have a seat at the
table than not at the table, when they're dealing with issues
that affect our claims, that affect our economy, that affect
our rights. That is the key here.
Senator DeMint. Mr. Secretary, is there any table in the
world that we're not sitting at right now?
Secretary Clinton. Well, yes, we're not sitting in the seat
that's reserved for us at the deep seabed mining table.
And to be clear, Senator, any Assembly decision, because
you referenced that, has to go through the Council. We have a
permanent seat on the Council; other members rotate.
But I really want to do everything I can, and I know my
colleagues feel the same way, to try to explain over the next
months, in the process that Chairman Kerry has started, why we
do think, as Secretary Panetta said, this is in our interests,
and it is, for us, the best of all worlds. Because otherwise,
we will put our economic interests and our economic players in
a disadvantageous, uncompetitive position.
And I think what you're hearing from both General Dempsey
and Secretary Panetta is that when we are now facing new
threats that largely arise out of the incredible race for
natural resources that will be primarily based in the oceans,
we need to be able to play any card at our disposal. And we
think we will have more cards if we are member than if we are
not a member.
Senator DeMint. Thank you. Thanks to you all.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And I'd just point out to the Senator, we'll go into this
further, but the veto, you are correct, is not within the
Assembly. But there is a restriction specifically defined
within the treaty as to what can go to the Assembly. And the
royalties are specifically reserved to the Council to send, and
that has to be by consensus.
Consensus is specifically defined as requiring, any form of
objection.
Senator DeMint. I'd like to get into that, because it begs
two questions. First of all, Sudan is on the Council. If we
have a veto, they have a veto. Their interest is very different
than ours.
Is there a question about whether they are on the Council
or not?
Secretary Clinton. They are a member. They have acceded to
the Convention.
Senator DeMint. And they are on the Council of
International Seabed.
Secretary Clinton. Well, you know, a lot of Member States,
over 160 of them, are technically within an all-member body,
but all the important decisions are made by the Council, and
there's absolutely nothing in this Convention which says that--
--
Senator DeMint. I'm speaking of the Council. I'm looking at
the list of members right now, and Sudan is on it.
And so if we have a veto, they have a veto. And so it's
just something we need to look into.
Again, the devil is in the details. We talked about some
theoretical advantages that might address some navigation
issues, but that only assumes if other countries are playing by
the rules. There's very little indication within the Treaty
Convention of the members already that that is happening or
that we can count on it in the international community as we go
forward.
But again, I want to thank all of the----
The Chairman. Let me just say to the Senator, for the
period of time that Sudan is on the Council, it is possible,
hypothetically, that they could veto something, and therefore,
you could wind up with gridlock and they would look like the
United States Senate or Congress. [Laughter.]
But the fact is, they're not a permanent member of the
Council. We are.
In fact, I think we are the only permanent member. So we
stand in a very special status that we are not currently able
to exercise.
And I think with respect to the Senator's fears, and other
fears, what you're trying to protect is something that would go
against the interests of our country. That's what we need to be
able to protect. If Sudan votes to do something or blocks us
from doing something that we're interested in doing, then there
are plenty of other avenues of recourse for that, too.
But if you're dealing with the oceans and dealing with this
question of royalties and other things, the fact that we would
preserve the right to protect our interests, I think what the
Senator and others have raised as an issue is they don't want
money going to dictators, they don't want money going to bad-
actor countries. We can block that. We can block that until the
cows come home.
And so I think we can be protected.
So again, we will go into that. And while the veto word is
not used, it's also not used, incidentally, in the Constitution
of the United States, but no one doubts the President has it.
So we have the ability to be able to do it through the
language that is there. That will become, I think, more clear
as we go forward.
Senator Coons.
Senator Coons. Thank you, Chairman Kerry. I'm very glad
that we're having this hearing today, and I appreciate all of
you for being here.
Senator Webb and I sent Chairman Kerry and Ranking Member
Lugar a letter back in April, urging that we move forward to
consideration of the Law of the Sea Treaty, and I'm grateful to
your broad and searching and supportive testimony here today.
When I was brand new to the Senate, one of the earlier
meetings I took was with the then-outgoing Chief of Naval
Operations, Adm. Gary Roughead. And when I asked him, what is
the single most important thing we can do to help the Navy over
the next decade, he said, without hesitation, ratify the Law of
the Sea Treaty. I was taken aback by that, given very urgent
shipbuilding needs, other budgetary priorities, other staffing
issues, operational issues.
As it turned out, Admiral Roughead's estimation, his
assessment of the importance of this treaty, is shared, as I
understand,
by every living Chief of Naval Operations, not to mention every
living Secretary of State and Secretary of Defense, and, of
course, strongly supported by both and by Chairman Dempsey here
today.
I note that Senator Warner, former Senator Warner, a former
chairman of the Armed Services Committee, former Secretary of
the Navy, is with us here today. And I have a copy of a letter
that he submitted to then-Chairman Biden and Ranking Member
Lugar, commenting on incoming Chief of Naval Operations Admiral
Roughead and how he had given very strong testimony in support
of this treaty in 2007.
My concern, Mr. Chairman, members of the panel, is that
this is the treaty that time forgot, that we are locked in a
debate that is literally decades out of date.
And I understand some of the concerns raised by members of
this committee. There were some flaws and some issues in this
treaty when first negotiated in 1982. Many of them hammered
out, resolved by 1994, by amendments, certainly by the time
this was previously considered several times by this committee
during your service here, Senator, now Secretary.
I believe it is well past the time when the questions and
concerns raised here today were compelling. And if I have to
face questions about whether this is a critical firefight in
the defense of American sovereignty, or a self-inflicted wound
in a rapidly emerging global theater where our competitors are
taking advantage of our absence, that empty seat at the table,
then I would rather take my naval strategic advice from the
Chief of Naval Operations, and the Chairman of the Joint Chiefs
of Staff, and the Secretary of the Navy, than from the
editorial pages of the Washington Times.
So frankly, if I could, I have a few questions I would like
to ask you. But I think what you've laid out here today is an
overwhelming response to the question, Is the ratification of
this treaty in the best interests of the United States?
Senator Menendez before me asked, in sort of rapid-fire
succession, a series of questions. Does this in any way put the
security of the United States at threat? Does this in any way
compromise the sovereignty of the United States? Does this in
any way compromise our intelligence-gathering ability? And my
recollection was, you all said no.
Let me put it in the opposite: Does failure to ratify this
treaty, General Dempsey, in any way compromise the ability of
the United States to project force around the world, to support
and sustain our allies, and to meet the threats within the
constraints that we have, in a balanced and responsible way?
Are we at risk as a result of failure to ratify this treaty?
General Dempsey. Based on our current application of
customary international law, we will, of course, assert our
sovereignty and our ability to navigate.
However, what it does do--and, therefore, it won't
deteriorate, our ability to project force will not deteriorate.
What it could cause, if we do not ratify over time, what
could happen is that we put ourselves at risk of confrontation
with others who are interpreting customary international law to
their benefit. So the risk of confrontation goes up. Our
ability to project power is unaffected.
Senator Coons. So failure to ratify puts us at some greater
risk of conflict. You are confident we continue to have the
resources to meet that, but we are, as it were, unilaterally
choosing not to use one potential tool for our national
defense.
General Dempsey. I would agree with that phraseology.
The Chairman. Secretary Panetta, do you want to----
Senator Coons. If I might, Secretary Panetta, I have the
same question for you.
Secretary Panetta. Senator, let me just make the point, it
does put us at risk, and the risk is this, that if we face a
situation that involves navigational rights, if we are not a
party to this treaty and can't deal with it at the table, then
we have to deal with it at sea with our naval power. And once
that happens, we clearly increase the risk of confrontation.
Senator Coons. And if I might, Secretary Panetta, given the

Pacific pivot, given the aggressive, expansive actions that
others have referred to in the South China Sea by China and
others, in your view, does this put our allies at any risk, in
terms of their confidence about our willingness and ability to
fight for their territorial issues, to fight for their freedom
of navigation of the seas?
Secretary Panetta. Well, the majority of our allies are
signatories. They have acceded to this Convention. They are
part of it. And they have a difficult time understanding why we
aren't there at the table alongside of them, making the
arguments we need to make.
Sure, they know we are a strong naval power. They know that
we can exert ourselves militarily wherever we want to. But they
also know that, in today's world, they are dealing at the table
trying to negotiate resolutions to conflicts in a rules-based
manner. That is the way to deal with issues like that.
And somehow, they are concerned, and I think rightly so,
that a great power like the United States is not there
alongside of them.
Senator Coons. Secretary Clinton, if I might, in 2007,
during a previous consideration or debate over this treaty,
Senator Murkowski voted for the Convention. Then-Governor Sarah
Palin endorsed the Convention. You referenced earlier that this
would extend our reach from 200 miles to 600 miles, and provide
some predictability for investment for oil and gas extraction,
for transoceanic cables, for seabed mining, a whole variety of
things that are newly emergent opportunities.
And in the Arctic, if we remain the only Arctic nation not
to accede to the treaty, not ratify the treaty, puts us at some
risk, both in terms defending shipping lanes and commercial
opportunities for our own country.
What challenges is the State Department facing in
protecting U.S. interests in the Northwest Passage in the
Arctic? And in your view, are we at some risk if we fail to
ratify this treaty?
Secretary Clinton. Well, I think one of the reasons there
has been such strong bipartisan support coming from Alaska over
the last decades is because they are truly on the front lines.
We know there are natural resources there that are likely to be
exploitable if we have the opportunity to do so.
And so, I think, Senator, the fact that we are an Arctic
nation, we are the only Arctic nation that has not taken the
step of acceding to the Convention and, thereby, being able to
demarcate our Continental Shelf and our Extended Continental
Shelf, is seen in Alaska as a missed opportunity and a
strategic disadvantage that is increasingly going to make us
vulnerable as the waters and the weather warms. And there are
going to be ships from all over the world exploring,
exploiting, fishing--taking advantage of what rightly should be
American sovereign territory. And nobody wants to see that
happen.
Senator Coons. Well, Madam Secretary, Mr. Secretary, Mr.
Chairman of the Joint Chiefs, I am grateful for your testimony
today.
I'm struck, Mr. Chairman, in listening to this testimony,
in reading the background materials and reflecting on it, how a
fight over some of the details of this treaty that was largely
resolved in our favor in 1994, remains frozen in time. And I
conclude, from what I've heard so far today, that the real risk
we face is that we are letting others draw boundaries, we are
letting others set rules, we are leaving our economic interests
out of the fight, and we are putting our national security
interests at risk by failing to ratify this treaty.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator. I appreciate
it.
Senator Lee.
Senator Lee. Thank you, Mr. Chairman. I thank each of the
witnesses for joining us today.
I am one of the people who have some concerns with this
treaty, and I assure you that my concerns are rooted in
something more than mythology. They're rooted in something more
than an editorial page. They are rooted, first and foremost, in
America's national sovereignty. And I think that is not
something that is to be discounted here.
One of the exchanges that I have appreciated during the
course of our discussion this morning has surrounded what has
been described at times as a veto on the Council. I want to
drill down on that issue a little bit and make sure I
understand it correctly.
My reading of article 158 of the treaty is that it creates
three basic bodies. It creates the Assembly, it creates the
Council, and it creates the Secretariat, as outlined in section
1 of article 158.
Now in article 160, we have a basic definition of the
purpose of the Assembly, and it describes that purpose as
follows, it says that the Assembly shall be considered the
supreme organ of the authority, meaning the International
Seabed Authority based in Kingston, Jamaica.
Then we move to article 162, which describes the purpose of
the Council. This is the 36-member body, not to be confused
with the 160-plus-member body that is the Assembly.
The Council, as I understand it, is empowered to do a
number of things, including to exercise the power outlined in
section 2 of article 162, subsection o(i), which is to
recommend to the Assembly rules, regulations, and procedures on
the equitable sharing of financial and other economic benefits
derived from activities in the area, and the payments and
contributions made pursuant to article 82.
So these are the royalties we are talking about, the
escalating royalties that begin at 1 percent 5 years into the
operation of the treaty, escalate gradually up until they get
to 7 percent, where they remain thereafter, once they achieve
that level.
It appears to me, based on my reading of article 162, that
the power of the Council, this body on which the United States
has a seat and has what you described as veto power, is a
recommending body.
And it appears also to me, as I look back at 160, section
160, subsection 2(g), that it is up to the Assembly and not to
the Council to decide upon the equitable sharing of financial
and other economic benefits from activities in the area.
So, Secretary Clinton, I was wondering if you could help me
understand, is my reading correct or am I missing something?
Secretary Clinton. Senator, the Assembly cannot take up an
issue unless recommended by the Council. Any decision that
would impose any obligations on the United States or otherwise
deal with substance must go through the Council. The
Secretariat has no decisionmaking authority.
So in effect, the practical consequences of this is that
the United States would have the right to reject or, in our
parlance, veto any decision that would result in a substantive
obligation on the United States or that would have financial
and budgetary implications. And that is due to the fact that
the United States is unique in having a permanent seat on the
Council of the International Seabed Authority, which is its
main decisionmaking body, and that important decisions must be
made by consensus.
So it is our very strong conviction that, as a party, the
United States would have an unprecedented ability to influence
deep seabed mining activities worldwide.
There is no other international organization that gives one
country, and one country only, a permanent membership on a key
decisionmaking body.
So as examples of decisions subject to U.S. approval would
be any rules, regulations, or procedures implementing the
seabed mining regime or amendments thereto; any decisions
relating to the distribution of payments for oil and gas
production on the Continental Shelf beyond 200 nautical miles;
adoption of any amendments to the seabed mining regime.
And just, finally, I think it is worth saying, and this
really echoes something that the chairman said: royalties under
this Convention are not a net loss to the United States, but a
net gain, because companies will not drill that far out, so
there is no money that would be coming to the Treasury or to
the profit of the companies. And if we are a party, we gain
from both domestic royalties and oil production.
So I know that there is, with any written document, and I
am a recovering lawyer, so I have been in this position in my
past life, there is a way to, you know, raise questions about
where the comma is placed or where the parenthesis occurs, but
this debate over this Convention has now gone on for 20 years.
And when you look at the people from Jim Baker to Condi Rice to
George Schultz to Michael Chertoff to Stephen Hadley, who have
supported this in both administrations, Republican and
Democratic, I just don't think we are all missing something,
Senator.
I think that we are trying our best to make a case that the
United States will be advantaged and that, in fact, our
sovereignty will be advanced.
Senator Lee. Thank you, Secretary Clinton. And I appreciate
your analysis on that. I appreciate the fact that that is your
position, that it is the position of the administration.
As I read, as I, too, am a recovering lawyer, we have to
call ourselves recovering rather than cured or ex-lawyer.
As I read this, I see the fact that the Assembly shall be
considered the supreme organ, and I also see that the Assembly
and not the Council has ultimate power to decide upon the
equitable sharing of financial and other benefits.
And so, that causes me to ask the question, what if those
who serve on the Assembly disagree with your interpretation? I
understand it is your interpretation and that of the
administration. I also understand that it is your
interpretation of that of the administration, that of the
United States of America, I suppose you could say, that the
treaty does not, as you point out, adopt any framework to tie
the United States into a climate change control regime or any
kind of system that could limit the emission of greenhouse
gases.
But in that context, the climate change context, and in
this context, what happens if the Assembly takes a different
position? And in the climate change context, could not the
Assembly reach a different conclusion and read several
provisions of the treaty, including articles 207 and 212,
coupled with the dispute resolution provisions of annex VI,
could it not take that interpretation and conclude differently
from the conclusions that you have reached today?
Secretary Clinton. We do not believe that that they could,
on
either the plain reading or the intent of the Convention. But
we also believe, Senator, that concerns such as these are not
only going to be properly vetted in this series of hearings,
but certainly can be taken into account with the resolution of
ratification.
You know, there is no obligation that the United States, in
the area of climate change, would be forced to accept or adopt
anything done by the Assembly under the Convention of the Law
of the Sea.
But, as an abundance of caution, that could certainly be
clarified and insisted upon in ratification resolution
language.
Senator Lee. I see my time has expired, Mr. Chairman.
As I close, I would just like to point out that there is
not just the Assembly. We could get hauled into a tribunal
called for under the annex. And at that point, if this is a
ratified treaty, arguably, our courts would be bound to enforce
the judgments of an international tribunal convened under the
authority.
Thank you.
The Chairman. Senator Lee, I'm just checking in on that,
and it's my understanding that we would not be subject to that,
because we would be able to choose arbitration, and arbitration
is actually limited.
But I see you're ready to leap.
Senator Lee. Yes, so arbitration, so we get to choose two
arbitrators, and the other side gets to choose two. And if we
can't come to an agreement as to the fifth, then that person is
chosen, I believe, by the Secretary General.
The Chairman. But it's limited as to what it is.
We will go through this. We're going to go through this. We
will clarify it.
And as the Secretary just said, this exercise is not to
diminish our sovereignty. It's to grow our sovereignty. And we
believe this treaty, in its whole, will grow the sovereignty.
And we hope we can persuade you of that in the end.
And so we have the ability, through the ratification
process, to be able to clarify some of that.
But second, I believe it will be clarified. If you look at,
I think it's 160(g) that you referred to, about the rules and
regulations, they are only able to make that decision in the
Assembly, ``consistent with the Convention and the rules and
regulations and procedures of the authority.'' The rules and
regulations and procedures of authority are specifically set by
the Council. And that is how it has worked, and that is how it
does work.
So in the end, the Assembly is simply implementing what has
been put forward. And we have a veto over what that rule or
regulation will be that they are implementing.
So again, this will be clarified appropriately, and we will
have the experts here who can make that clear.
In fact, I would like to ask, I think it would be helpful,
Madam Secretary and Mr. Secretary, if your legal teams would
put their heads together, and I'm going to leave the record
open for a week, if you could submit your formal legal
understanding of that, to answer the Senator's question, I
think that would be particularly helpful to the record.
Secretary Panetta. We would be happy to, Senator.
[The written response from the State Department follows:]

During Secretary Clinton's May 23, 2012, testimony before the
Senate Committee on Foreign Relations, you discussed whether the United
States, as a party to the Law of the Sea Convention, would be able to
veto decisions on distribution of royalty payments. You also discussed
the relationship between the Convention and climate change. Please find
herein further information on both of these issues.
legal basis for u.s.veto over international seabed authority decisions

ON DISTRIBUTION OF ROYALTY PAYMENTS

As a party to the Law the Sea Convention, as modified by the 1994
Agreement, the United States would have the ability to veto any
decision related to the distribution of payments resulting from
production on the Continental Shelf beyond 200 nautical miles (Article
82).
Summary:

Decisions on the distribution of any payments resulting from
production on the Continental Shelf beyond 200 nautical miles
are made by the Assembly of the Seabed Authority.
However, the Assembly can only make such decisions ``upon
the recommendation of the Council'' of the Seabed Authority.
Any Council recommendation on this matter would need to be
by consensus, which is defined as the absence of any formal
objection.
As a Party, the United States--and no other country--is
guaranteed a permanent seat on the Council.
Thus, as a Party and member of the Council, the United
States could formally object to (and thereby block consensus)
any Council recommendation on this matter.
There would then be no Council recommendation, which would
preclude any decision by the Assembly.

Detailed explanation:

Royalty payments are made ``through''--not ``to''--the
International Seabed Authority. They are held there for
distribution to States Parties to the Convention. Article
82(4).
The rules and procedures for distributing royalty payments
are to be decided by the International Seabed Authority's
Assembly (comprising all States Parties) only upon the
recommendation of the Seabed Authority's Council (comprising 36
States Parties).

Article 162(2)(o)(i) provides that the Council ``shall . .
. recommend to the Assembly rules, regulations and
procedures on the equitable sharing of . . . the payments
and contributions made pursuant to article 82 . . . .''
Article 160(2)(f)(i) provides that the Assembly ``shall .
. . consider and approve, upon the recommendation of the
Council, the rules, regulations and procedures on the
equitable sharing of payments and contributions made
pursuant to article 82.''
Thus, the Council is not a merely a ``recommending body''
in the sense that its recommendations are merely advisory.
Assembly decisions must be ``upon the recommendation'' of
the Council.
Article 160(2)(f)(i) provides further that ``If the
Assembly does not approve the recommendations of the
Council, the Assembly shall return them to
the Council for reconsideration in light of the views
expressed by the Assembly.''

Any Council recommendation to the Assembly on this matter
must be taken by consensus.

Article 161(8)(d) provides that decisions arising under
Article 162(2)(o) ``shall be taken by consensus.'' As noted
above, Article 162(2)(o) pertains to Council
recommendations on benefit sharing.
Article 161(8)(e) provides that `` `consensus' means the
absence of any formal objection.''

The 1994 Agreement guarantees the United States, and only
the United States, a permanent seat on the Council.

Section 3, paragraph 15 of the Annex to the 1994 Agreement
provides that ``The Council shall consist of 36 members
[including]: (a) Four members from among those States
Parties which, during the last five years for which
statistics are available, have either [met certain
consumption/imports criteria for seabed minerals], provided
that the four members shall include . . . the State, on the
date of entry into force of the Convention, having the
largest economy in terms of gross domestic product, if such
States wish to be represented in this group'' (emphasis
added);
The United States had the largest economy in terms of GDP
at the time of entry into force in 1994.

Thus, as a Party and member of the Council, any formal objection by
the United States would preclude consensus and therefore block any
Council recommendation to the Assembly on this matter. Without a
recommendation, the Assembly has no authority to take a decision on the
matter.
Furthermore, if the United States were to agree to a Council
recommendation but the Assembly did not support it, the matter would
have to be returned to the Council for reconsideration. Therefore, the
Assembly could not change a recommendation of the Council without the
Council's approval.
Finally, as a Party, the United States would have a veto over far
more deep seabed mining matters than just those on the distribution of
royalty payments. The Convention, as modified by the 1994 Agreement, is
structured to ensure consensus decisionmaking not just for distributing
royalty payments but for any decision that would result in a
substantive obligation on the United States or that would have
financial and budgetary implications. For instance, the United States
could block a decision on any rules, regulations and procedures
implementing the seabed mining regime or amendments thereto.

CLIMATE CHANGE

The Convention would also not provide a forum for challenging U.S.
climate change policies.

The Chairman. Senator Lugar, do you have additional
questions?
On that basis, let me just thank all of you. I think this
has been a terrific opening engagement. I appreciate,
obviously, the focus of everybody on it.
I'm confident that these questions are going to be answered
as we go forward. There is going to be plenty of opportunity.
We will have more of the active commanders of each of the
areas of concern, who will speak to their experience in the
field. We will have the businesses themselves come forward. We
will have some other groups and entities who are concerned. And
we'll have plenty of opportunity to be able to vet this as we
go forward.
I think your testimony today was excellent and a terrific
beginning to this process. We're going to build the most
extensive, exhaustive record that has yet been on this, and I
think provide our colleagues in the Senate with ample
opportunity to be able to make a sound decision.
So with that, we thank you very, very much for joining us
today. And we thank you for the jobs you are doing, all of you.
Appreciate it very much.
We stand adjourned.
[Whereupon, at 12:55 p.m., the hearing was adjourned.]
----------

Letters and Additional Material Submitted for the Record

Responses of Secretary of State Hillary Rodham Clinton to Questions
Submitted by Senator John F. Kerry

Questions 1a-1g. Some have expressed concerns that the Law of the
Sea Convention would require the United States to accede to, or
otherwise comply, with international climate change agreements, such as
the Kyoto protocol. Among other things, they point to article 212 of
the Convention, which provides, inter alia, that states parties shall
``adopt laws and regulations to prevent, reduce, and control pollution
of the marine environment from or through the atmosphere, applicable to
the air space under their sovereignty and to vessels flying their flag
or vessels or aircraft of their registry, taking into account
internationally agreed rules, standards and recommended practices and
procedures and the safety of air navigation.'' They also point to
article 222 of the Convention, which provides, inter alia, that states
parties to the Convention ``shall adopt laws and regulations and take
measures necessary to implement applicable international rules and
standards established through competent international organizations or
diplomatic conferences to prevent, reduce, and control pollution of the
marine environment from or through the atmosphere, in conformity with
all relevant international rules and standards concerning the safety of
air navigation.''

(1a). Would United States accession to the Law of the Sea
Convention require the United States to sign or accede to the
Kyoto protocol or to sign, ratify, or accede to any other
international agreement, legally binding or otherwise,
concerning climate change?

Answer. No. The Law of the Sea Convention is an oceans treaty, not
a climate treaty. Joining the Convention would not require the United
States to implement the Kyoto Protocol or any other particular climate
change laws or policies, and the Convention's provisions could not
legitimately be argued to create such a requirement.

(1b). Would United States accession to the Law of the Sea
Convention require the United States to adopt any new laws or
regulations to implement rules or standards related to climate
change established by international organizations or at
diplomatic conferences?

Answer. No. The Convention would not obligate the United States to
adopt any such laws or regulations.

(1c). If your response to questions 1(a) and/or 1(b) is
``no,'' please explain in detail why the Convention, including
Articles 207, 212 or 222, would not require such action by the
United States.

Answer. These articles appear in Part XII of the Convention, which
addresses the marine environment. ``Pollution of the marine
environment'' is defined in Article 1, paragraph 4. Even if one
assumed, for the sake of argument, that (1) Part XII applied to the
issue of climate change; (2) ``pollution of the marine environment''
existed within the meaning of Article 1(4); (3) there was a causal link
between a Party's GHG emissions and such pollution; and (4) other
requirements were satisfied, Part XII would still not require a Party
to adopt particular climate laws or policies.
Part XII's arguably relevant provisions are either extremely
general (e.g., Article 194) or expressly do not require a Party to
implement any particular standards.

Articles 207 and 212 call on Parties merely to ``tak[e] into
account internationally agreed rules, standards and
recommended practices and procedures.''
Articles 213 and 222, which are the ``enforcement'' analogues
to Articles 207 and 212, would likewise not require the
United States to adopt or enforce particular standards
related to climate change. The ``enforcement'' section of
Part XII allocates responsibilities among flag States,
coastal States, and port States, depending upon the source/
type of marine pollution in question. Adoption and
enforcement of laws in relation to Articles 207 and 212
fall within the domain of the State concerned. However,
even if these articles applied to climate change, they
would not require adoption or enforcement of Kyoto or other
climate rules or standards. There are simply no such
international rules and standards relating to climate
change applicable to the United States.

(1d). Has any dispute resolution proceeding been instituted
under the Convention against a country alleging failure to
adopt or implement the Kyoto protocol or another international
climate change agreement or climate change rules and standards
established by international organizations or at diplomatic
conferences?

Answer. No. In the 18 years since the Convention has been in force,
climate change has not been the subject of any dispute settlement
proceedings.

(1e). Would United States accession to the Law of the Sea
Convention require the United States to adopt ``cap and trade''
legislation or regulations?

Answer. No. The Convention would not require the United States to
adopt ``cap and trade'' legislation or regulations or any other
particular climate laws or policies.

(1f). If your response to question 1(f) is ``no,'' please
describe in detail why the Convention, including Articles 207,
212 or 222, would not require the United States to adopt ``cap
and trade'' legislation or regulations.

Answer. See Answer (1c) above.

(1g). Has any dispute resolution proceeding been instituted
under the Convention against a country alleging failure to
adopt or enforce ``cap and trade'' legislation or regulations?

Answer. No. Climate change has not been the subject of any dispute
settlement proceedings.

Questions 2a-2c. Some have expressed concerns that United States
accession to the Law of the Sea Convention will expose the United
States to baseless environmental lawsuits, including lawsuits relating
to land-based sources of pollution of the marine environment.

(2a). Are there any environmental provisions of the Law of
the Sea Convention that the United States does not already
follow as a matter of domestic law and regulation?

Answer. No. U.S. agencies, including the Coast Guard, EPA, and the
Justice Department, have been acting in accordance with the Convention
since President Reagan directed the U.S. Government to abide by the
bulk of the Convention's provisions in 1983. Were the United States to
become a Party to the Convention, U.S. agencies would implement its
``marine environment'' provisions under existing laws, regulations, and
practices. This was confirmed in a March 1, 2004, letter to Chairman
Lugar from William H. Taft IV, the State Department's Legal Adviser
during the Bush administration. The letter provided, in pertinent part:
``The United States, as a Party, would be able to implement the
Convention through existing laws, regulations, and practices (including
enforcement practices), which are consistent with the Convention and
which would not need to change in order for the United States to meet
its Convention obligations.'' We stand by the Taft letter.

(2b). Would United States accession to the Convention
require the United States to adopt new or different
environmental laws or regulations?

Answer. No. As discussed in Answer (2a), the United States would be
able to implement the Convention through existing laws and regulations,
including those related to the marine environment.

(2c). Has any dispute resolution proceeding been instituted
under the Convention against a country for failing to adopt or
enforce environmental standards or rules contained in
international agreements to which that country was not a Party,
or that were adopted by international organizations or
diplomatic conferences over that country's objection?

Answer. No. In the 18 years since the Convention has been in force,
no such proceeding has been instituted.

Question 3. Article 309 of the Convention states that no
reservations or exceptions are permitted unless they are expressly
permitted by other articles of the Convention. Article 310 of the
Convention states that a State acceding to the Convention may make
declarations or statements concerning the Convention ``provided that
such declarations or statements do not purport to exclude or to modify
the legal effect of the provisions of this Convention in their
application to that State.'' In 2007 the Senate Foreign Relations
Committee recommended that the following declaration be included in a
resolution of advice and consent for the Convention: ``The United
States further declares that its consent to accession to the Convention
is conditioned upon the understanding that, under article 298(1)(b),
each State Party has the exclusive right to determine whether its
activities are or were `military activities' and that such
determinations are not subject to review.''

Has any court or arbitration tribunal established under the
Convention contradicted a State Party's exclusive right to
determine whether its activities are or were ``military
activities''?

Answer. No State Party has challenged and no court or arbitration
established under the Convention has contradicted a State Party's
exclusive right to determine whether its activities are or were
``military activities.''
The exemption of U.S. ``military activities'' from dispute
settlement procedures is consistent with the terms of the Convention.
If a tribunal were nevertheless to second-guess a U.S. judgment as to
what constitutes a U.S. ``military activity,'' the United States would
view that judgment as lacking a legal basis and invalid, and it would
therefore have no legal effect on the United States.

Questions 4a-4e. The Law of the Sea Convention contains several
provisions relating to the Extended Continental Shelf--the area of a
coastal State's Continental Shelf that extends beyond 200 nautical
miles from the coast--including that a coastal State's establishment of
the outer limits of its Continental Shelf on the basis of
recommendations from the Commission on the Limits of the Continental
Shelf ``shall be final and binding'' on all State Parties to the
Convention.

(4a). Has the United States of America issued any oil or gas
leases relating to the U.S. Extended Continental Shelf?

Answer. Yes, the Department of Interior has issued leases in the
``western gap,'' a small high seas area in the Gulf of Mexico, beneath
which is Extended Continental Shelf of the United States and Mexico.

(4b). If the answer to question 7(a) is ``yes,'' are any of
these lease areas currently in the production stage--i.e., are
resources actually being extracted at this time?

Answer. According to the Department of Interior, it has not
received any exploration plans for these areas and no exploratory
drilling has taken place in the leased areas.

(4c). If the answer to question 7(a) is ``yes,'' please
explain why accession to the Law of the Sea Convention remains
necessary.

Answer. The best way to achieve international recognition of our
Continental Shelf is as a Party to the Convention. The U.S. Chamber of
Commerce, the American Petroleum Institute, and the companies that
would potentially be involved in resource development on the
Continental Shelf all support accession to the Convention because they
desire such international legal recognition and certainty.
A key element of achieving this legal certainty and international
recognition is access to the Commission of technical experts set up
under the Convention. If the United States remains a nonparty, and
attempts to establish its Continental Shelf limits without a review by
the expert Commission, it is unlikely the international community would
give those limits the same sort of recognition and acceptance that
Parties to the Convention will enjoy.

(4d). Rather than acceding to the Law of the Sea Convention,
could the United States achieve the same level of legal
certainty for drilling activities on the U.S. Extended
Continental Shelf by negotiating bilateral agreements with
neighboring countries? To fully replicate the Extended
Continental Shelf protections of the Convention, how many
agreements would the United States need to conclude?

Answer. No. Two countries can agree on how to divide their own
maritime claims, but they cannot decide what is, and what is not,
Continental Shelf that extends beyond their Exclusive Economic Zone
limits. That is a matter that concerns all countries. As such, a series
of bilateral agreements, assuming other countries were even willing to
negotiate such agreements and agree to U.S. terms, would not be the
equivalent of joining the Convention and using its mechanisms to get
binding international recognition of our shelf beyond 200 nautical
miles from the over 160 States Parties to the Convention.
In short, we cannot gain the certainty and security over our
Continental Shelf that our industry needs to be prepared to make the
substantial investments necessary to exploit it by negotiating
bilateral agreements with individual nations. The way to secure our
Continental Shelf rights is to become a Party to the Convention.

(4e). How are foreign governments likely to react if the
United States were to approach them and ask that they sign a
separate deal that replicates the protection for Extended
Continental Shelf activity that is contained in the Convention?

Answer. It is not clear how other countries would react and
whether, if they agreed to such negotiations, they would be prepared to
conclude agreements on terms favorable to the United States. At
present, the United States has 17 unresolved maritime boundaries with
various neighbors. The process of addressing those disputes and
concluding them pursuant to a mutually acceptable agreement is
challenging and time-consuming, and it is important that the United
States not conclude such agreements unless they are on terms favorable
to the United States. Even neighboring countries that may be interested
in negotiating boundary agreements with us understand that such
agreements cannot ``replicate'' the Convention in regards to the
Continental Shelf.

Questions 5a-5b. In your testimony you noted that the International
Seabed Authority may begin as early as 2013 the process of developing
rules governing mining in the deep seabed.

(5a). As a nonparty to the Convention, what ability will the
United States have to shape those rules in ways favorable to
U.S. interests or to block attempts by other states to shape
the rules in ways contrary to U.S. interests?

Answer. As a nonparty, the United States participates as an
observer to the International Seabed Authority. As an observer, without
a vote or formal voice, the United States has very limited ability to
shape deep seabed mining rules in its interests. For instance, the
United States has no ability as an observer to block
proposals by members of the Seabed Authority's Council, including
proposals by members related to deep seabed mining rules and proposals
for the distribution of payments made for oil and gas production on the
Continental Shelf beyond 200 nautical miles.

(5b). How would this change if the United States were to
become a Party to the Convention this year? What provisions of
the Convention support your conclusions in this regard?

Answer. As a Party, the United States would have an unprecedented
and unparalleled ability to influence deep seabed mining activities
worldwide. No other international organization gives one country, and
one country only--the United States--permanent membership on its key
decisionmaking body. If the United States acceded to the Convention
this year, it would be able to fill this seat at the Seabed Authority's
meeting in 2013.
The 1994 Agreement guarantees the United States, and only the
United States, a permanent seat on the 36-member Council. Specifically,
Section 3(15) of the Annex to the Agreement provides that Council
membership shall include the State having the largest gross domestic
product at the time of entry into force of the Convention, which was
1994. That country was the United States.
Furthermore, the Convention, as modified by the 1994 Agreement, is
structured to require consensus decisionmaking for any decision that
would result in a substantive obligation on the United States or that
would have financial and budgetary implications. For instance, the
United States could use its permanent seat to block a decision on any
rules, regulations, and procedures implementing the seabed mining
regime or amendments thereto.

Questions 6a-6b. In your testimony you made repeated references to
the fact that the United States would, upon its accession to the
Convention, have an effective veto over the way that the International
Seabed Authority distributes any royalties or fees that it receives
with respect to exploitation in the Extended Continental Shelf or the
deep seabed.

(6a). Please describe in detail the provisions of the
Convention that support this conclusion.

Answer. As a Party to the Law the Sea Convention, as modified by
the 1994 Agreement, the United States would have the ability to veto
any decision related to the distribution of payments resulting from
production on the Continental Shelf beyond 200 nautical miles (Article
82).
Summary of Convention provisions supporting this conclusion:

Decisions on the distribution of any payments resulting from
production on the Continental Shelf beyond 200 nautical
miles are made by the Assembly of the Seabed Authority.
However, the Assembly can only make such decisions ``upon the
recommendation of the Council'' of the Seabed Authority.
Any Council recommendation on this matter would need to be by
consensus, which is defined as the absence of any formal
objection.
As a Party, the United States--and no other country--is
guaranteed a permanent seat on the Council.
Thus, as a Party and member of the Council, the United States
could formally object to (and thereby block consensus on)
any Council recommendation on this matter.
There would then be no Council recommendation, which would
preclude any decision by the Assembly.

Detailed explanation of Convention provisions supporting this
conclusion:

Royalty payments are made ``through''--not ``to''--the
International Seabed Authority. They are held there for
distribution to States Parties to the Convention. Article
82(4).
The rules and procedures for distributing royalty payments are
to be decided by the International Seabed Authority's
Assembly (comprising all States Parties) only upon the
recommendation of the Seabed Authority's Council.

Article 162, paragraph (2)(o)(i) provides that the Council
``shall . . . recommend to the Assembly rules, regulations
and procedures on the equitable sharing of . . . the
payments and contributions made pursuant to article 82 . .
. .''
Article 160, paragraph (2)(f)(i) provides that the Assembly
``shall . . . consider and approve, upon the recommendation
of the Council, the rules, regulations and procedures on
the equitable sharing of payments and contributions made
pursuant to article 82.''
Thus, the Council is not a merely a ``recommending body'' in
the sense that its recommendations are merely advisory.
Assembly decisions must be ``upon the recommendation'' of
the Council.
Article 160, paragraph (2)(f)(i) provides further that
``[i]f the Assembly does not approve the recommendations of
the Council, the Assembly shall return them to the Council
for reconsideration in light of the views express by the
Assembly.''

Any Council recommendation to the Assembly on this matter must
be taken by consensus.

Article 161, paragraph (8)(d) provides that decisions
arising under Article 162, paragraph (2)(o) ``shall be
taken by consensus.'' As noted above, Article, paragraph
162(2)(o) pertains to Council recommendations on benefit
sharing.
Article 161, paragraph (8)(e) provides that `` `consensus'
means the absence of any formal objection.''

The 1994 Agreement guarantees the United States, and only the
United States, a permanent seat on the Council.

Section 3, paragraph 15 of the Annex to the 1994 Agreement
provides that ``The Council shall consist of 36 members
[including]: (a) Four members from among those States
Parties which, during the last five years for which
statistics are available, have either [met certain
consumption/imports criteria for seabed minerals], provided
that the four members shall include . . . the State, on the
date of entry into force of the Convention, having the
largest economy in terms of gross domestic product, if such
States wish to be represented in this group;''
The United States had the largest economy in terms of GDP at
the time of entry into force in 1994.

Thus, as a Party and member of the Council, any formal objection by
the United States would preclude consensus and therefore block any
Council recommendation to the Assembly on this matter. Without a
recommendation, the Assembly has no authority to take a decision on the
matter.
Furthermore, if the United States were to agree to a Council
recommendation but the Assembly did not support it, the matter would
have to be returned to the Council for reconsideration. Therefore, the
Assembly could not change a recommendation of the Council without the
Council's approval.
Finally, as a Party, the United States would have a veto over far
more deep seabed mining matters than just the distribution of royalty
payments. For instance, the United States could block a decision on any
rules, regulations, and procedures implementing the seabed mining
regime or amendments thereto. As explained in the answer to question 7,
this includes rules, regulations, and procedures relating to any
royalties relating to deep seabed mining.

(6b). How many other countries are guaranteed a permanent
seat on the Council of the International Seabed Authority?

Answer. None. No countries other than the United States have a
permanent seat on the Council of the International Seabed Authority.

Questions 7a-7c. What payments, if any, must Parties to the
Convention or companies that they sponsor pay to the International
Seabed Authority in connection with exploitation of the deep seabed? To
the extent that the rules or regulations concerning such payments are
not yet in place, please describe:

(7a). The process by which the amount of such payments will
be determined.

Answer. With the exception of an application fee, described below,
there are presently no payments that Parties or companies must make for
exploitation of the deep seabed.
Prior to the 1994 Agreement, the Convention contained extensive
provisions on payments related to deep seabed mining. These problematic
provisions were eliminated by the 1994 Agreement, which takes a ``cost-
effective'' and ``evolutionary approach.'' (Agreement, Annex, Sections
1 and 8) Specifically, in lieu of the Convention's original provisions,
the Agreement provides a set of principles that provide the basis for
establishing future rules, regulations, and procedures for financial
payments related to deep seabed mining. (Agreement, Section 8) For
instance, the Agreement provides that the system of payments:

``Shall be fair to both the contractor and to the Authority'';
``Shall . . . avoid giving deep seabed miners an artificial
competitive advantage or imposing on them a competitive
disadvantage'' relative to land-based mineral producers;
and
``should not be complicated and should not impose major
administrative costs on the Authority or on a contractor.''
(Agreement, Section 8(1))

These provisions reflect market principles and are a fundamental
change from the original Convention. They also reflect the cost-
effective and evolutionary approach adopted in the Agreement; rather
than decide on financial matters in advance, the Agreement provides
that rulemaking within the Seabed Authority be undertaken ``at various
stages of the development of activities in the area.'' (Agreement,
Annex, Section 1) Since activities in the Area presently remain at the
exploration (rather than exploitation) phase, the Seabed Authority has
not yet developed any rules for payments related to exploitation.
The Agreement provides for a fee of US$250,000 ``for processing
applications'' of either exploration or exploitation. (Agreement,
Section 8(3)) The amount of that fee is to be ``reviewed from time to
time by the Council in order to ensure that it covers the
administrative cost incurred. If such administrative cost incurred by
the Authority in processing the application is less than the fixed
amount, the Authority shall refund the difference to the applicant.''
(Convention, Annex III, Article 13(2))
Finally, it is important to note that the purpose of payments to
the Seabed Authority is to cover its expenses and enable it to be a
financially self-sufficient entity. When the Seabed Authority is able
to meet its administrative expenses from funds received in connection
with mining activities, it will no longer request assessed
contributions from Parties.

(7b). [To the extent that the rules or regulations
concerning such payments are not yet in place, please
describe:] the extent to which the United States, as a nonparty
to the Convention, would have the ability to influence the
rules and regulations relating to such payments; and

Answer. As a nonparty, the United States participates as an
observer to the International Seabed Authority. As an observer, without
a vote or formal voice, the United States has very limited ability to
influence rules and regulations relating to payments from deep seabed
mining, and no ability to block objectionable proposals on payments
related to deep seabed mining. Thus, it is particularly important that
the United States accede to the Convention prior to key decisions by
the Seabed Authority on this and other deep seabed mining issues.

(7c). [To the extent that the rules or regulations
concerning such payments are not yet in place, please
describe:] the extent to which the United States, as a Party to
the Convention, would have the ability to influence the rules
and regulations relating to such payments.

Please explain the provisions of the Convention that support your
conclusions in this regard.

Answer. As a Party to the Convention, the United States would have
an unprecedented and unparalleled ability to influence deep seabed
mining activities worldwide, including with respect to rules and
regulations relating to such payments. As a Party, decisions on the
rules, regulations, and procedures implementing the seabed mining
regime could not be adopted without approval of the United States. This
is provided for in the following provisions:

Article 160, paragraph (2)(f)(ii), on Assembly approval,
Article 162, paragraph (2)(o)(ii), on powers of the Council,
and
Article 161, paragraph (8)(d), on consensus decisionmaking in
the Council.
1994 Agreement, Annex, Section 3(15)(a), providing the United
States with a permanent seat on the Council.

Questions 8a-8e. Article 160, Subsection 2(g) of the Convention
states that a duty of the Assembly of the International Seabed
Authority is to ``decide upon the equitable sharing of financial and
other economic benefits derived from activities in the [Deep Seabed]
Area, consistent with this Convention and the rules, regulations and
procedures of the Authority.''

(8a). What are the ``rules, regulations and procedures''
referenced in this provision?

Answer. The reference to ``rules, regulations and procedures'' in
Article 160, paragraph 2(g) refers to all rules, regulations, and
procedures of the Seabed Authority.
Of particular relevance would be any ``rules, regulations and
procedures'' adopted relating to the ``sharing of financial and other
economic benefits'' derived from activities in the deep seabed area.
(Article 160, paragraph (2)(f)(i)) to date, however, no such rules,
regulations, and procedures have been adopted.

(8b). Which body or bodies of the International Seabed
Authority promulgates them?

Answer. Decisions on ``rules, regulations and procedures'' that
relate to ``sharing of financial and other economic benefits'' derived
from activities in the deep seabed area are made by the Assembly of the
Seabed Authority. However, the Assembly can only make such decisions
``upon the recommendation of the Council'' of the Seabed Authority, and
such decisions must be taken by consensus. Along the same lines as
detailed in the response to Question 6a, this is provided for in
Articles:

160, paragraph (2)(f)(i), on Assembly approval,
162, paragraph (2)(o)(i), on powers of the Council, and
161, paragraph (8)(d), on consensus decisionmaking in the
Council.

As a Party, the United States would have a permanent seat on the
Council (1994 Agreement, Annex, Section 3(15)(a)) and, therefore, the
United States would have the ability to veto any proposed decision on
this matter at any time.

(8c). Can the Assembly take a decision under Article 160,
Subsection 2(g) of the Convention that contravenes these rules,
regulations and procedures?

Answer. No. Article 160, paragraph 2(g) itself states that such
decisions must be ``consistent with this Convention and the rules,
regulations, and procedures of the Authority.''
Furthermore, the Assembly may not take a decision on those ``rules,
regulations, and procedures'' unless it is ``upon the recommendation of
the Council.'' Specifically, Article 160, paragraph (2)(f)(i) states
that ``[i]f the Assembly does not approve the recommendations of the
Council, the Assembly shall return them to the Council for
reconsideration . . . .'' Thus, if the United States were to agree to a
Council recommendation, but the Assembly did not support it, the matter
would have to be returned to the Council for reconsideration. The
Assembly could not change a recommendation of the Council without the
Council's approval.
Thus, the Council is not a merely a ``recommending body'' in the
sense that its recommendations are merely advisory. Assembly decisions
must be ``upon the recommendation'' of the Council.

(8d). Can the Assembly take such a decision without first
receiving a recommendation from the Council?

Answer. As discussed above, decision on any rules, regulations, and
procedures related to ``sharing of financial and other economic
benefits'' must be upon the recommendation of the Council, and no such
decision or recommendation has been made.
Whether the Assembly can ultimately take decision under Article
160, paragraph 2(g) without first receiving a recommendation from the
Council will depend upon the rules, regulations, and procedures decided
upon by the Council itself. To date, no such rules, regulations, and
procedures have been adopted. As a Party, the United States could
ensure--through the development of the rules, regulations, and
procedures--that any Assembly decision under Article 160, paragraph
2(g) is made only on the basis of a prior Council decision.
In addition, the Convention as modified by the 1994 Agreement
already provides that any actions taken by the Assembly under Article
160, paragraph 2(g) need to first go through the Finance Committee.
Specifically, the Agreement provides that decisions by the Assembly
(and the Council) on ``[r]ules, regulations and procedures on the
equitable sharing of financial and other economic benefits derived from
activities in the Area and the decisions to be made thereon'' shall
take into account recommendations of the Finance Committee. (Agreement,
Annex, Section 9(7)) Thus, the Assembly could not act in the absence of
a prior recommendation of the Finance Committee. The Agreement further
provides that the United States is guaranteed a seat on the Finance
Committee (until such time as the Seabed Authority is financially self-
sufficient) and that decisions by the Finance Committee on any question
of substance shall be taken by consensus. (Agreement, Annex, Section 9)

(8e). Can the Assembly take such a decision contrary to the
Council's recommendation?

Answer. As discussed above, the Assembly may not take a decision on
rules, regulations, and procedures that relate to ``sharing of
financial and other economic benefits'' unless it is ``upon the
recommendation of the Council.'' Article 160, paragraph (2)(f)(i)
states that ``[i]f the Assembly does not approve the recommendations of
the Council, the Assembly shall return them to the Council for
reconsideration . . . .''
As discussed above, whether the Assembly can ultimately take an
action under Article 160, paragraph 2(g) without first receiving a
recommendation from the Council will depend upon the rules,
regulations, and procedures adopted by the Council itself and
subsequently approved by the Assembly. As a Party, the United States
could ensure--through the development of the rules, regulations, and
procedures--that the Assembly can take no such a decision contrary to a
prior decision of the Council.
______

Responses of Secretary Leon E. Panetta to Questions Submitted
by Senator John F. Kerry

Question.Freedom of Navigation Operations.--It is absolutely
imperative that we retain the capability to protect our access to the
skies, the high seas, the straits, and even the territorial waters of
other nations with respect to innocent passage. The U.S. Navy has run,
and will continue to run, multiple Freedom of Navigation operations
every year in areas--including the South China Sea--where countries try
to place unlawful restrictions on the freedom of navigation, to ensure
that we and the international community do not accept as a precedent
these unlawful claims.

Is it correct to say that these operations are going to
continue apace whether we're a party to the treaty or not?

Answer. Yes, regardless of whether the United States is a party to
the Law of the Sea Convention, U.S. Military assets will continue to
conduct operational assertions under the U.S. Freedom of Navigation
Program. It remains our primary operational means to challenge
excessive maritime claims and excessive assertions of jurisdiction by
coastal States.

Would being a party to the Convention help our forces when
they're out there trying to get countries to drop their
spurious restrictions on freedom of navigation? If so, how?

Answer. Yes. I believe strongly that joining the Convention would
assist U.S. efforts to get countries with excessive maritime claims to
drop their spurious restrictions on freedom of navigation. Joining the
Convention would reinforce our position as a global maritime leader in
shaping the discussion interpreting the Law of the Sea; and being a
party would certainly afford us increased authority in the conduct of
our operational assertions.

Would being a party to the Convention help you enlist
support from other countries to get the offending countries to
drop their spurious claims? If so, how?

Answer. Yes. I believe that being a party to the Convention would
help enlist support from other countries to get offending countries to
drop their spurious claims. Much of our defense strategy is based upon
modernizing our network of defense and security partnerships and
supporting a rules-based order that promotes stability. In joining the
Convention, we would be demonstrating, actively, our commitment to such
an order and to working with others in support of the rule of law.

Does the fact that the United States is not now a party to
the Convention hamper our ability to push back against these
spurious claims?

Answer. Yes. The fact that the United States is not a party to
Convention complicates our ability now to challenge spurious claims. At
present, the United States is unable to participate fully in some of
the Convention's key institutions and meetings where these very issues
are being discussed and shaped. Without a full seat at the table, we're
unable to participate in these important discussions, defend our
interests, and shape the outcome.

Question. Dispute Resolution Mechanism.--Based on the treaty text
and on how it is already being implemented, do you have any concern
whatsoever over whether the United States will be able to exclude
disputes concerning military activities from the Convention's dispute
resolution mechanism, and that the United States will be able to decide
for itself whether an activity is a ``military'' one for the purposes
of the Convention?

Answer. No, I have no concerns about U.S. ability to exclude
military related disputes from the Convention's dispute resolution
mechanism, should we accede to the Convention. Article 298 of the
Convention expressly allows States to exclude ``disputes concerning
military activities'' from dispute resolution mechanisms and
procedures; if the United States accedes to the Convention, we would
invoke that exception. This exception has been invoked by numerous
States that are already parties to the Convention, including Russia,
China, the United Kingdom, and France. Moreover, the United States
would retain the right to determine what activities constitute
``military activities''--and would not be subject to review by an
international tribunal or court.

Question. Mandatory Technology Transfer.--Some have asserted that
the Convention provides for mandatory technology transfer and would
require the United States to equip adversaries with sensitive
technology, such as antisubmarine warfare technology. Do you agree with
this assertion?

Answer. No, I do not agree with this assertion. There is absolutely
no provision in the Convention that would require the United States to
equip adversaries with sensitive technology. When the Convention was
originally negotiated, there was a provision providing for mandatory
technology transfer relating to deep seabed mining technology, but this
provision was superseded by the 1994 Agreement relating to the
Implementation of Part XI, which has no mandate for technology
transfer.

Question. Use or Threat of Military Force.--Some have asserted that
because certain articles of the Convention such as Articles 88, 141,
and 301 state that the high seas and the deep seabed should be reserved
for ``peaceful purposes'' that U.S. accession to the Convention will
impose new restrictions on the United States with respect to the use or
threat of military force. Do you agree with this assertion?

Answer. No. I do not agree with this assertion; the Convention's
``peaceful purposes'' provisions would not impose any new restrictions
with regard to the United States use or threat of military force and
would not impair the inherent right of individual or collective self-
defense or rights during armed conflict. In fact, U.S. military
operations and activities would not be inhibited or constrained in any
manner if the United States became a party to the Convention. The
``peaceful purposes'' provisions merely repeat the same obligations
under the United Nations Charter to which the United States has been
obligated since 1945. This has not kept the United States from
responding to an attack or protecting our national interests.

Question. Size of the U.S. Navy.--Some have characterized the Law
of the Sea Convention as a way to shrink the U.S. military--and in
particular the U.S. Navy--by allowing the United States to rely on a
treaty instead of military force. They argue that instead of joining
the Convention, the United States should increase the size of the U.S.
Navy.

Is your support for United States accession to the Law of
the Sea Convention motivated by a desire to shrink the size of
the U.S. Navy and its fleet?

Answer. No. My strong and unwavering support for U.S. accession to
the Law of the Sea Convention is not at all motivated by a desire to
shrink the size of the U.S. Navy and its fleet; my support is not
linked in any way whatsoever to the size of the U.S. Navy or the size
of DOD forces. Instead, my support is based on a fundamental belief
that joining promotes U.S. national security interests, for several
reasons. Joining the Convention preserves and protects our navigational
freedoms and global access for military and commercial ships, aircraft,
and undersea fiber optic cables. We depend on the navigational
provisions for global access to train our forces, get them to the
fights, sustain them and then return them home--all without a
``permission slip'' from other countries. Although we have succeeded to
date in preserving and protecting our navigational freedoms through
reliance on customary international law, joining the Convention places
our national security on firmer footing. Customary international law
changes over time, subject to state practice. Treaty law remains the
firmest legal foundation upon which to base our global presence--that
is precisely why I support U.S. accession.

If the United States Naval fleet were doubled or tripled in
size, would you still support immediate U.S. accession to the
Convention?

Answer. Yes. If the U.S. Navy fleet were doubled or tripled in
size, I would continue to support unequivocally U.S. accession to the
Convention. As noted earlier, I support U.S. accession regardless of
the size of our fleet.

Question. U.S. Maritime Interdiction Efforts.--Some have asserted
that U.S. accession to the Convention would hurt U.S. maritime
interdiction efforts under the Proliferation Security Initiative (PSI).
Do you agree?

Answer. No. U.S. accession to the Convention would not hurt U.S.
maritime interdiction efforts under the Proliferation Security
Initiative (PSI). It is important to note that the United States
ability to conduct the full range of maritime interdiction operations
would not be hampered at all by joining the Convention. In the Defense
Strategic Guidance issued earlier this year, countering weapons of mass
destruction remains a primary mission set for U.S. forces. PSI is a key
tool in our arsenal for executing this mission across the maritime
domain. To this end, joining the Convention would not interfere with
U.S. participation in PSI; to the contrary, it would reinforce our
long-held position that PSI is entirely consistent and compatible with
the Convention. In fact, PSI's Statement of Interdiction Principles
states that interdiction activities under PSI will be conducted
``consistent with national legal authorities and relevant international
law frameworks.'' Rather, U.S. accession could encourage other States
to join PSI as it would convey our commitment to the rule of law for
the oceans to the same degree they are already committed.
______

Responses of Gen. Martin E. Dempsey to Questions Submitted
by Senator John F. Kerry

Question. Freedom of Navigation Operations.--It is absolutely
imperative that we retain the capability to protect our access to the
skies, the high seas, the straits, and even the territorial waters of
other nations with respect to innocent passage. The U.S. Navy has run,
and will continue to run, multiple Freedom of Navigation operations
every year in areas--including the South China Sea--where countries try
to place unlawful restrictions on the freedom of navigation, to ensure
that we and the international community do not accept as a precedent
these unlawful claims.

Is it correct to say that these operations are going to
continue apace whether we're a party to the treaty or not?

Answer. Yes. U.S. forces will continue to conduct operational
assertions against excessive maritime claims as part of the Freedom of
Navigation Program.

Would being a party to the Convention help our forces when
they're out there trying to get countries to drop their
spurious restrictions on freedom of navigation? If so, how?

Answer. Yes. The rules of the Convention that guarantee the freedom
of navigation are favorable to our interests. Being a party to
Convention would enhance the credibility of our operational assertions
and diplomatic challenges against excessive maritime claims throughout
the world.

Would being a party to the Convention help you enlist
support from other countries to get the offending countries to
drop their spurious claims? If so, how?

Answer. Yes. Being a party to the Convention would demonstrate U.S.
commitment to the rules based international order and strengthen the
foundation for partnerships with countries that share our national
interest in preserving the navigational rights that are codified in the
Convention.

Does the fact that the United States is not now a party to
the Convention hamper our ability to push back against these
spurious claims?

Answer. Yes, our status as a nonparty does hamper our ability to
push back against spurious claims. Joining the Convention would allow
us to bring the full force of our influence as the world's foremost
maritime power to bear against countries with excessive maritime
claims.

Answer. No, I do not have the concerns you mentioned. The United
States has the right to forgo participation in any of the Convention's
dispute resolution mechanisms for disputes concerning military
activities. Other nations, including China, France, Russia, and the
United Kingdom have exempted their military activities. This right is
not subject to review.

Answer. I do not agree with this assertion. Although mandatory
technology transfer was one of the objectionable provisions related to
deep seabed mining in the original 1982 Convention, the 1994 Agreement
eliminated that provision. In addition, the Convention expressly
provides that nothing in it shall be deemed to require a party to
disclose information contrary to the essential interests of its
security.

Answer. I do not agree with this assertion. Those provisions simply
incorporate into the Convention the same obligations that the United
States already has under the U.N. Charter.

Is your support for United States accession to the Law of
the Sea Convention motivated by a desire to shrink the size of
the U.S. Navy and its fleet?

Answer. No. My support for the Convention is not motivated by a
desire to shrink the U.S. Navy. The Convention codifies rules that are
very favorable to U.S. national security interests. Joining the
Convention would give the men and women of our Armed Forces another
tool to accomplish the mission.

If the United States naval fleet were doubled or tripled in
size, would you still support immediate U.S. accession to the
Convention?

Answer. Yes. Joining the Convention would strengthen our military
operations by preserving essential navigation and overflight rights and
providing legal certainty to the world's largest maneuver space.

Answer. No, U.S. accession to the Convention would not hurt U.S.
maritime interdiction efforts. The PSI specifically requires
participating countries to act consistently with international law,
which includes the law reflected in the Convention. Most PSI partners
are parties to the Convention. Further, joining the Convention is
likely to strengthen PSI by attracting new cooperative partners.

Question. Customary International Law.--In your testimony you
stated that you were not now comfortable relying solely upon customary
international law with regard to rights of navigation because of, among
other things, the fact that customary international law evolves and may
be subject to individual interpretation by countries attempting to
interpret customary law to their benefit. Some of those countries--like
China, for example--are parties to the Convention. If these parties to
the Convention already interpret both customary international law and
the Convention in ways that are inimical to U.S. interests, why would
United States accession to the Convention matter?

Answer. U.S. accession would increase our credibility and influence
in defending the Convention's existing norms that enable the access,
mobility, and sustainment of our military forces and commercial fleet.
Our nonparty status detracts from our ability to lead developments in
the maritime domain, and enables emerging powers to advance their
contrary interpretations of the Convention. As the global security
environment changes, it will become increasingly important for the
United States to use all elements of national power.
______

Letters Submitted by Senator John F. Kerry

Letters Submitted by Secretary of State Hillary Rodham Clinton

THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM
THE U.S. MILITARY

----------

THURSDAY, JUNE 14, 2012 (a.m.)

U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 10:06 a.m., in
room SH-216, Hart Senate Office Building, Hon. John Kerry
(chairman of the committee) presiding.
Present: Senators Kerry, Cardin, Webb, Coons, Udall, Lugar,
Corker, Risch, Inhofe, DeMint, Isakson, Barrasso, and Lee.

OPENING STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS

The Chairman. The hearing will come to order.
Thank you all very much for being here with us today. This
is the second hearing on the Law of the Sea Convention and we
are very pleased to welcome six individuals with long and
remarkably distinguished careers in defense of America's
security. ADM James A. Winnefeld, Jr., is the Vice Chairman of
the Joint Chiefs of Staff. ADM Jonathan Greenert is Chief of
Naval Operations. ADM Robert J. Papp, Jr., is Commandant of the
U.S. Coast Guard. Gen. William M. Fraser III is Commander of
U.S. Transportation Command. GEN Charles H. Jacoby, Jr., is the
Commander of U.S. Northern Command, and ADM Samuel J. Locklear
III is Commander of the U.S. Pacific Command.
I cannot think of any time, certainly not since I have been
here and I doubt even before that, that we have had so many top
military leaders come before the Senate Foreign Relations
Committee at one time, and I thank you all for being here.
I want to make clear why the committee is so interested in
this testimony and why it is so important.
There are many people--there are some people who raise
questions about the treaty inevitably as they have about any
treaty that we have ever passed. But this treaty particularly
has two components that those of us who support it believe are
important for the country.
One is, above all, the economic component. And we will have
a hearing shortly with major leaders from American industry,
the mining industry, oil and gas, communications, others,
transportation, who are deeply concerned about the legality of
their claims, should they capitalize and spend millions of
dollars exploiting resources from the ocean seabed, and that is
worth enormous competitive advantage to the United States of
America and it is worth enormous numbers of jobs.
But second, there is a very significant national security
component to this. And we have asked as many of the different
commanders to come here because each of them in their own way
will have an ability to be able to share with America their
individual reasons. And there are individual reasons. They
differ in some cases of what is most important to them about
the passage of this treaty. And in its sum total, it is a
compelling rationale for why this is in America's interest. And
the committee this afternoon will have another hearing. We will
have some opponents to the treaty there and we will have others
who want to come in and oppose it because we think it is very,
very important. Senator Lugar and I are committed to hear from
everybody so that the Senate can build the strongest record
possible and then act in its, hopeful, wisdom based on facts
and based on that record that is compiled here.
We have heard from Secretary of State Hillary Clinton. We
have heard from Secretary of Defense Leon Panetta, and we have
heard from the Chairman of the Joint Chiefs of Staff, GEN
Martin Dempsey.
In addition to support from the witnesses here today, we
have letters that have urged ratification of the treaty from
General Mattis, the Commander of the U.S. Central Command;
General Fraser, Commander of the U.S. Southern Command; Admiral
Stavridis, Commander of the U.S. European Command; Admiral
McRaven, Commander of U.S. Special Operations Command; and
General Kehler, Commander of the U.S. Strategic Command. And I
will place each of those letters in the record so that people
can read them in full.
The Chairman. We do want to have an open and honest
discussion regarding this. I think that is the important thing
in building a record regarding this treaty. But today we are
going to focus on the national security component, and at the
appropriate time, probably after the election, we will have a
full Senate classified briefing because there is classified
material that needs to be digested by Members of the Senate,
but I think the appropriate time would be sometime after the
election.
As the world's foremost maritime power, our national
security interests are intrinsically linked to freedom of
navigation. There is a reason that every living Chief of Naval
Operations has supported the U.S. accession to the Law of the
Sea during the time that they were serving as Chief of Naval
Operations. They know that the United States needs the treaty's
navigational bill of rights for worldwide access to get our
troops to the fight, to sustain them during the fight, to get
back home without the permission of other countries or without
the diversion of having to force one's way into those passages
and have a secondary struggle apart from the primary conflict
that one might be engaged in.
Now, critics say that these navigational provisions are
nothing new because they are already protected under customary
international law. But most legal experts and most practical
analysts of our security will tell you that relying on
customary international law puts the legal basis for our
actions outside of our ultimate control. By joining, we would
maximize U.S. influence on the treaty bodies that play a role
in interpreting, applying, and developing the Law of the Sea.
Former Secretaries of State, Henry Kissinger, George
Shultz, James Baker, Colin Powell, and Condoleezza Rice
recently wrote an op-ed driving this point home, and I just
want to quote it. ``Some say it's good enough to protect our
navigational interests through customary international law, and
if that approach fails, then we can use force or threaten to do
so. But customary law is vague and doesn't provide a strong
foundation for critical national security rights. What's more,
the use of force can be risky and costly. Joining the
Convention would put our vital rights on a firmer legal basis,
gaining legal certainty and legitimacy as we operate in the
world's largest international zone.''
I would call everybody's attention to a full-page
advertisement in today's Wall Street Journal featuring the five
Secretaries, all of whom cite these reasons for why they
believe we should ratify this treaty.
The bottom line is this. Do we really want to entrust our
national security to an unwritten set of rules where our
security would be enhanced by having clarity ahead of time? Is
there any other area in which we choose to leave important
matters of national security simply to customary law where we
have an option not to? And the answer to both questions is
``No.'' Just look at the numbers of treaties we have engaged in
with respect to nuclear weapons, chemical weapons, and other
issues.
We need to join the treaty to ensure critical navigational
rights and high seas freedoms are protected. Nowhere is the
nexus between our national security and this treaty more clear
than in the South China Sea. Becoming a party would give an
immediate boost to U.S. credibility as we push back against
excessive maritime claims and illegal restrictions on our
warships and commercial vessels and those of our allies. There
is no doubt in my mind that it would help resolve maritime
issues to the benefit of the United States and our regional
allies and partners, and I believe if our colleagues have the
opportunity to hear the classified briefing, which they will,
and also the testimony here, I think they will come to that
conclusion.
It is true that the United States has used diplomatic and
military assets to refute excessive maritime claims, and I am
sure we will continue in the future. These freedoms of
navigation of operations efforts on our behalf will continue
for sure. But they entail a degree of risk and our Navy cannot
be everywhere at once no matter what the size of our fleet.
As leaders and citizens, we owe it to our men and women in
uniform to provide them with every available means at our
disposal to perform their dangerous mission. Let me be clear. I
am not advocating that our military take a step backward, and I
am not advocating that we replace a strong military with a
piece of paper. I would never do that, nor would anybody who
advocates this. What I am advocating is common sense and giving
the military all of the tools that it needs.
General Dempsey said it best. This treaty would ``provide
us an additional tool for navigating an increasingly complex
and competitive security environment.''
Ratification would also give the United States greater
credibility and legitimacy as we seek to hold others to the
treaty's terms. It would demonstrate by deed, not just by
words, America's commitment to the rule of law and strengthen
the foundation for the alliances and partnerships that are
critical to U.S. national security and global stability.
So you do not have to take my word for that, but let me
quote our current Secretary of Defense. Secretary Panetta said:
``We are pushing for a rules-based order in the region and the
peaceful resolution of maritime and territorial disputes in the
South China Sea, in the Strait of Hormuz, and elsewhere. How
can we argue that other nations must abide by international
rules when we haven't joined the very treaty that codifies
those rules?'' I think that is exactly right. The Law of the
Sea ensures and secures the rights that we need for our
military and commercial ships to meet our core national
security requirements.
Now, some will say that perhaps we should not bother
joining the treaty because China and some other countries that
are parties do not always follow the rules. Well, it is true
that they do not always, but it does not make sense not to join
the treaty to have a tool to be able to try to force them to or
hold them accountable. And I will tell you--and we will hear
the testimony--that there are occasions when our Secretaries
have raised this issue with the Chinese at various meetings
from ASEAN to elsewhere, and the Chinese look at us and say you
are not even a party to the treaty. Who are you to tell us?
The United States is the greatest maritime power in the
world, the greatest maritime power the world has ever seen. We
have the strongest navy, and our economy relies heavily on our
imports and exports that move by sea. As a result, we have an
enormous stake in ensuring a stable and predictable set of
rules for the oceans. Joining the treaty helps us do this.
So with that, I welcome our distinguished witnesses again.
Thank you for bringing your expertise to this committee at this
important moment. We look forward to hearing your insights.
Senator Lugar.

OPENING STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA

Senator Lugar. Thank you, Mr. Chairman. I join you in
welcoming our distinguished military panel to the Foreign
Relations Committee.
I want to underscore for my colleagues a fundamental
starting point for this hearing. The Commander in Chief, the
Joint Chiefs of Staff, the United States Navy, the United
States Coast Guard, and individual combatant commanders are
asking the Senate to give its advice and consent to the Law of
the Sea Convention. Our uniformed commanders are telling us,
unanimously, that U.S. accession to this treaty would help them
do their job in a time of considerable international threat.
We have charged the United States Navy with maintaining
sea-lanes and defending our Nation's interests on the high
seas. They do this every day, and even in peacetime these
operations carry considerable risk. The Navy is telling us that
U.S. membership in the Law of the Sea Convention is a tool that
they need to maximize their ability to protect United States
national security with the least risk to the men and women
charged with this task.
This request is not the result of a recent reassessment by
Navy authorities or the enthusiasm of a few leaders. The
support of the military and the Navy for this treaty has been
consistent, sustained, and unequivocal. All the members of the
Joint Chiefs support advice and consent. Their predecessors
likewise supported the Convention. As seven CNOs wrote in a
joint letter back in 1998, ``there are no downsides to this
treaty--it contains expansive terms, which we use to maintain
forward presence and preserve U.S. maritime superiority. It
also has vitally important provisions which guard against the
dilution of our navigational freedoms and prevent the growth of
new forms of excessive maritime claims.''
The military is not always right. But the overwhelming
presumption in the United States Senate has been that if
military leaders ask us for something to help them do their job
we do our best to provide them with that tool within the
constraints of law and responsible budgeting. Articles and
statements opposing the Convention often avoid mentioning the
military's longstanding support for Law of the Sea. This is
because to oppose the Convention on national security grounds
requires one to say that military leaders who have commanded
fleets in times of war and peace and who have devoted their
lives to naval and military studies have illegitimate opinions.
Those critics who do mention the military's support
sometimes spin theories as to why the military would back this
treaty. One explanation that was offered in 2007 was that
somehow military commanders had been misled by their service
lawyers. As a former Navy officer who served as an intelligence
briefer to CNO ADM Arleigh Burke, I can attest that CNOs are
not easy to deceive. These are some of the most talented and
politically adept individuals to serve our Nation. The
suggestion that CNOs, service chiefs, and other military
leaders are blithely allowing themselves to be led astray by
Defense Department lawyers is nonsense.
Other critics have suggested that military support for the
Convention is simply a function of top uniformed officers
taking orders from Presidents and Secretaries of Defense. But
this theory relies on a simplistic understanding of how
military decisions are made, and it fails to explain why Navy
leaders have continued to support the Law of the Sea Convention
long after they have left active service.
Still other critics suggest that the Navy's expression that
it will be able to maintain freedom of navigation with or
without U.S. ratification of Law of the Sea means that
accession is unnecessary or even undesirable. But the Navy's
assertion that it will protect sea-lanes under any circumstance
does not relieve us of the responsibility to give them tools to
make their job less arduous, less expensive, and less complex.
The Navy will always have a ``can do'' attitude regarding its
freedom of navigation mission, but that should not make us
cavalier about the seriousness of their request for Law of the
Sea. Navy leaders are not looking for a substitute for naval
power, they are hoping for a tool that will help resolve
navigation disputes with all types of nations, including
allies. They are hoping for a tool that will allow them to
reduce the share
of naval assets that must be devoted to freedom of navigation
missions.
The ongoing delay in ratifying the Convention would be just
an interesting political science case study if the United
States were not facing serious consequences because of our
nonparticipation. As a nonparty we have little say in
amendments that could roll back navigational rights that we
fought hard to achieve. In addition, as a nonparty, our ability
to influence the decisions of the Commission on the limits of
the Continental Shelf is severely constrained. Every year that
goes by without the United States joining the Convention
deepens our country's submission to ocean laws and practices
determined by foreign governments without U.S. input.
I thank once again our distinguished panel for joining us
today. We certainly look forward to their testimony.
And I thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Lugar. I
appreciate it.
Senator Corker and, I think, Senator Risch, I do not think
you were here when I mentioned it. You may have been, Senator
Risch, but we will have a classified briefing at the
appropriate time down the road, and I think Senators will be
interested in that and I am asking just to withhold judgment in
a sense till then.
I want to recognize that our former colleague and former
Secretary of the Navy, John Warner, is here, and we are
delighted to have him as part of the proceedings, and I think
he has a number of friendly admirals, retired, who are here
with him, and we appreciate their interest in this.
I neglected to mention I think today is the Army's
birthday. Is that correct? Happy Birthday to all of the members
of the United States Army. And I think it is your birthday,
General Jacoby, tomorrow. So I wish you many happy returns,
sir.
We will begin in this order, if we will: Vice Chairman
Winnefeld and then Chief of Naval Operations Greenert, Coast
Guard Commandant Papp, General Fraser, General Jacoby, and
Admiral Locklear. Admiral thank you for being with us.
Appreciate it.

STATEMENT OF ADM JAMES A. WINNEFELD, JR., VICE CHAIRMAN, JOINT
CHIEFS OF STAFF, WASHINGTON, DC

Admiral Winnefeld. Mr. Chairman, Senator Lugar,
distinguished members of the Foreign Relations Committee, good
morning and thank you for the opportunity to appear before you
on this topic.
I appear today as a career sailor, a former combatant
commander, and in my current position, all assignments that
have informed my perspectives on the Law of the Sea Convention.
It is also a privilege to appear alongside another
generation of military leaders as we join in sharing the view
that now is the time for the United States to join the Law of
the Sea Convention.
I have come to my own judgment on this, not informed by
lawyers--or actually informed, but not influenced by lawyers--
that joining this treaty will have positive implications for
our operations across the maritime domain. The Convention
improves on previous agreements, including the 1958 Geneva
Convention. It will further protect our access to the maritime
domain. It will fortify our credibility as the world's leading
naval power and allow us to bring to bear the full force of our
influence on maritime disputes. In short, it preserves what we
have and it gives us yet another tool to engage any nation that
would threaten our maritime interests.
We have listened very closely over the many years to the
rationale for why we should not accede to the Convention,
including a number of items in public debate, and we take these
concerns very seriously. We read this and we study it and we
want to understand it.
But I would say that some say that joining the Convention
would result in the loss of sovereignty for the United States.
I believe just the opposite to be true. Some of these op-eds
and the like would say that joining the Convention will open
U.S. Navy operations to the jurisdiction of international
courts. We know this is not true. The 2007 proposed Senate
declarations and understandings specifically express our right
to exempt military activities from the Convention. Many other
nations that have acceded have already exempted their military
activities from the treaty without dispute.
Some say that joining the Convention will require us to
surrender our sovereignty over our warships and other military
vessels. I can assure you that we will not let this happen and
the Convention does not require it. If anything, it further
protects our sovereignty in this regard well before we would
have to resort to any use of force.
Others say that it will cause us to have to alter our rules
of engagement. This is also false. I can tell you that joining
the Convention would not require any change whatsoever in the
rules of engagement that we employ today, including and
especially our right to self-defense.
Still others say that it means our naval activities will be
restricted in or beyond areas in which we now operate. Rather,
if we do not join the Convention, we are at more risk than ever
of nations attempting to impose such limitations under evolving
interpretations of customary international law. That body of
law is not static. Joining the Convention will protect us from
ongoing and persistent efforts on the part of a number of
nations, including those with growing economic and military
power to advance their national laws and set precedents that
could restrict our maritime activities particularly within the
bounds of their Exclusive Economic Zones.
We attach the term ``lawfare'' to these efforts to erode
the protections of customary international law. It is a trend
that is real and pressing and that could place your Navy at
legal disadvantage unless we join the Convention. And the
nations that would challenge us in this and other ways are,
frankly, delighted that we are not a party to the Convention.
Joining will also give us a stronger moral standing to
support partners who are being intimidated over questions of
sovereignty that should be resolved peacefully and voluntarily
under the Convention. Candidly, I join my boss, Secretary
Panetta, and Marty Dempsey in finding it awkward to suggest
that other nations should follow rules that we have not yet
agreed to ourselves.
And joining will give us the ability to influence key
decisions that could affect our sovereign rights and those of
our partners and friends in the Arctic and elsewhere, and this
grows more important each day.
The real question to me is whether our country will choose
to lead in the maritime environment from the inside or will
follow from the outside.
Senator, you know, I tell my sons that there are three
kinds of people in this world: those who make things happen,
those who watch what happens, and those who wonder what
happened. I do not want to see the United States or our Navy or
Coast Guard wondering what happened when key decisions,
potentially detrimental to our sovereignty, are made in our
absence by the 161 members of the treaty.
Our recommendations to join reflect nearly 2 decades of
military leaders who have studied this problem closely and
arrived at the same conclusion that ratification is in our best
interests. Today I join these officers, including every
chairman of the Joint Chiefs since 1994, in giving my support
to the Law of the Sea Convention and in asking for your advice
and consent.
I thank you for the opportunity appear this morning, and I
look forward to your questions. I thank you, sir.
[The prepared statement of Admiral Winnefeld follows:]

Prepared Statement of ADM James A. Winnefeld , Jr.

Mr. Chairman, Senator Lugar, distinguished members of the Foreign
Relations Committee, thank you for the opportunity to appear before you
this morning.
I appear here today as a career Sailor, as a former Commander of
United States Northern Command, and in my current position--all
assignments that have informed my perspectives on the Law of the Sea
Convention.
It is a privilege to appear alongside so many uniquely qualified
leaders, each with their own unique perspectives, to join in sharing
our view that it is time for the United States to join the Law of the
Sea Convention.
Joining this treaty will strengthen our posture and operations
across the maritime domain, including in the Arctic, the Asia-Pacific
region, the Strait of Hormuz, and the global shipping lanes at the
heart of our military sealift capabilities.
Joining will solidify our global maritime leadership, enhance our
credibility, and, as the world's foremost naval power, allow us to
bring to bear the full force of our influence on maritime disputes.
We've listened closely over many years to the rationale for why we
should not join, and take these concerns very seriously.
Some say that joining will result in a loss of sovereignty for the
United States. I believe the opposite to be true.
Some say joining the Convention will open U.S. Navy operations to
the jurisdiction of international courts. This is not true, as was
specifically declared in the 2007 proposed Senate declarations and
understandings. Many other nations who have joined have exempted their
military activities from the treaty.
Some say it will require us to surrender our sovereignty over our
warships. This is erroneous. We will not let this happen, and the
Convention does not require it.
Others say it will cause us to have to alter our rules of
engagement. This is also false--joining the Convention would not
require any change whatsoever to our rules of engagement
Still others say it means our naval activities will be restricted
in or beyond areas in which we now operate. This is false as well. In
fact, if we do not join the Convention, we are more at risk than ever
of nations attempting to impose such limitations under evolving
interpretations of customary international law.
Customary international law is not static and joining the
Convention will protect us from persistent attempts to erode the
protection of customary international law, as a number of states,
including those with growing economic and military power, advance
national laws that attempt to restrict our maritime activities,
particularly within the bounds of their Exclusive Economic Zones. This
is contrary to the Convention, but is a trend that is real and pressing
and that could place your Navy at an enormous legal disadvantage.
Joining will allow us to go on the offensive against such self-serving
``lawfare'' activity that runs counter to our vital interests. Nations
that would challenge us in the maritime domain are delighted that we
have not joined. Meanwhile, there are other nations--such as North
Korea, Iran, Syria, and Venezuela--in whose company I believe it is not
in our interest to remain as nonparties to the Convention.
Joining will also give us stronger standing to advance treaty
arguments in support of partners who are being intimidated over
disputes that should be resolved peacefully and voluntarily under the
Convention. Candidly, I find it awkward to suggest that other nations
should follow rules that we haven't even formally agreed to ourselves.
And joining will give us a seat at the table when key decisions are
being made that could affect our sovereign rights and those of our
partners and friends in the Arctic--this is more timely than it has
ever been in the history of the Convention.
Our recommendation to join reflects nearly two decades of military
leaders who have studied this problem and who have continued to come to
the clear conclusion that ratification is in our best interests.
Today, I join those officers, including every Chairman of the Joint
Chiefs since 1994 when this was first submitted, in giving my
unwavering support to the Law of the Sea Convention and in asking for
your advice and consent.

The Chairman. Thank you very much. Appreciate it.
Admiral Greenert, proceed.

STATEMENT OF ADM JONATHAN W. GREENERT, CHIEF OF NAVAL
OPERATIONS, U.S. NAVY, WASHINGTON, DC

Admiral Greenert. Thank you, Chairman Kerry, Ranking Member
Lugar, distinguished members of the committee. I am honored to
appear before you to discuss the Law of the Sea Convention. You
will have to excuse me. I have a little bit of laryngitis, but
I will get through this.
This morning I would like to make three points, if I may.
No. 1, the Law of the Sea Convention will help ensure the
access that the Navy needs to operate forward, and Senator,
operating forward is what we are about. That is where we are at
our best.
That is where we serve the Nation best. That is the key to our
effectiveness.
No. 2, the Convention will provide a formal and consistent
framework with legal certainty to peacefully settle maritime
disputes.
And No. 3, the Convention will help ensure we remain
consistent with our principles and will enhance our
multilateral cooperation. That I have found in spades as I have
interfaced with heads of navy around the world.
As the world's preeminent maritime power, the U.S. Navy
will benefit from the support the Convention provides our
operations, especially the broad navigational rights that are
guaranteed on the high seas and inside Exclusive Economic Zones
of the other nations. For example, in the past several years,
some nations in the Middle East and the Asia-Pacific region
have complained about U.S. Navy survey ships operating within
their Exclusive Economic Zones. Commanders have consistently
responded by asserting our rights under the Convention and
customary international law. However, our argument would carry
much more weight if the United States were a party to the
Convention. Joining the Convention would give our day-to-day
maritime operations a firmer, codified legal foundation. It
would enable and strengthen our military efforts. It will not
limit them.
The Convention provides a formal and consistent framework
for peaceful resolution of maritime disputes. The Convention
defines the extent of control that nations can legally assert
at sea and prescribes procedures to peacefully resolve
differences. It is an important element in preventing
disagreements from escalating into a confrontation or
potentially conflict.
Recent interference with our operations in the western
Pacific and some rhetoric by Iran about closing the Strait of
Hormuz underscore the need to be able to use the Convention to
clearly identify and respond to violations of international law
that might attempt to constrain our access. As a member of the
Convention, our ability to press the rule of law and to
peacefully deter conflict will certainly be enhanced.
Remaining outside the Convention is just inconsistent with
our principles, our national security strategy, and our leading
position in maritime affairs. For example, our forces in the
U.S. Fifth Fleet in the Arabian Gulf lead a coalition maritime
force that enforces maritime security in the greater Middle
East. Out of the 26 nations that serve in this coalition, only
3, including the United States, are not a party to the
Convention. This coalition asserts rights on a daily basis
under the Convention to visit vessels, counter piracy, and
render assistance to vessels in danger. However, America's
status as a nonparty to the Convention is sometimes questioned
by our coalition partners. Acceding to the Convention will
enhance our position as a leader of that coalition and a leader
in the world of maritime nations in the Middle East and
elsewhere.
In closing, aided by the framework provided by the
Convention, your Navy will continue to be critical to our
Nation's security and prosperity.
I appreciate the committee's longstanding support of the
men and women of the Navy, and I look forward to continuing to
work with you as we address these challenges. Thank you,
Senator.
[The prepared statement of Admiral Greenert follows:]

Prepared Statement of ADM Jonathan W. Greenert

Chairman Kerry, Senator Lugar, and members of the committee, thank
you for the opportunity to testify in support of the United States
joining the Law of the Sea Convention (LOSC). I join my predecessors in
supporting the Convention and I believe it is important to our ability
to reduce our reliance on customary international law, provide a
mechanism to resolve disputes, assure our access across the maritime
domain, and protect our Nation's security and prosperity. I appreciate
your continued support of our 625,000 Sailors and civilians and look
forward to working together in pursuing our national security
objectives.
As the world's preeminent maritime power, the United States will
benefit from the support LOSC provides to our operations. Our ability
to deter aggression, contain conflict, and fight and win our Nation's
wars depends upon our ability to freely navigate the world's oceans.
The rules inherent in LOSC support worldwide access for military and
commercial ships and aircraft without requiring permission of other
countries, such as in the archipelagic waters of countries like
Indonesia, or in the Arctic where receding ice is opening new routes
for transit. The Convention affords our submarines the right to transit
submerged and aviation-capable ships to transit while conducting flight
operations through international straits; establishes broad
navigational rights and freedoms for our ships and aircraft in the
exclusive economic zones of other nations and on the high seas; and
reinforces the sovereign status of our vessels. The Convention affords
navigational rights for ships without regard to cargo or means of
propulsion, an extremely important right given our extensive use of
nuclear power.
LOSC provides a formal and consistent framework for the peaceful
resolution of maritime disputes. It defines the extent of control
nations can legally assert at sea and prescribes procedures to counter
excessive maritime claims. Acceding to LOSC will increase our
credibility in invoking and enforcing the treaty's provisions and
maximize our influence in the interpretation and application of the law
of the sea. Recent interference with our operations in the Western
Pacific and rhetoric by Iran to close the Strait of Hormuz underscore
the need to use the Convention to clearly identify and respond to
violations of international law that seek to constrain access to
international waters. As a party to the Convention, we will bolster our
position to press the rule of law and maintain the freedom to conduct
military activities in these areas.
Remaining outside LOSC is inconsistent with our principles, our
national security strategy and our leadership in commerce and trade.
Virtually every major ally of the United States is a party to LOSC, as
are all other permanent members of the U.N. Security Council and all
other Arctic nations. Our absence could provide an excuse for nations
to selectively choose among Convention provisions or abandon it
altogether, thereby eroding the navigational freedoms we enjoy today.
Accession would enhance multilateral operations with our partners and
demonstrate a clear commitment to the rule of law for the oceans. For
example, under the Convention, warships are authorized to stop and
board vessels if they are suspected to be without nationality or
engaged in piracy. By joining LOSC, we would ``lock in'' these
authorities as a matter of treaty law and thus strengthen our ability
to conduct counterpiracy operations across the globe and provides an
important tool to support counterproliferation efforts, and maritime
interdiction of terrorists and illegal traffickers tied to terrorism.
LOSC supports the operations of our military forces. Under the
Convention we retain the right to define what constitutes our own
military activities, which are excluded from dispute resolution
procedures. Moreover, the Convention does not limit our ability to use
force in self-defense. I would not support LOSC if I thought it limited
our Nation's military options.
The Navy's ability to retain access across the maritime domain and
adjacent airspace, especially the strategic maritime crossroads, would
be enhanced by accession to LOSC. As the world's preeminent maritime
power, the United States has much to gain from the legal certainty and
global order brought by LOSC. As a party to LOSC, we will be in a
better position to counter the efforts of nations to restrict freedom
of the seas. The United States should not rely on customs and
traditions for the legal basis of our military and commercial activity
when we can instead use this Convention. It is an important element of
protecting our Nation's security and prosperity.

The Chairman. Thank you very much, sir. We appreciate it.
Commandant.

STATEMENT OF ADM ROBERT J. PAPP, JR., COMMANDANT, U.S. COAST
GUARD, U.S. DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, DC

Admiral Papp. Good morning, Chairman Kerry, Senator Lugar,
and the distinguished members of the committee.
It is my privilege to testify before you here today on how
the United States should accede to the Law of the Sea
Convention because it will enhance the Coast Guard's operations
and maritime leadership. Like six previous commandants, I urge
you to accede to the Convention without further delay.
Having served on six Coast Guard cutters, commanding four
of them, I view things through a sailor's eye. My fictional
hero, Captain Jack Aubrey of Patrick O'Brian's ``Master and
Commander'' book series always positioned his ship in battle so
that he could hold the weather gauge. The ship with the weather
gauge is upwind and has greater ability to maneuver relative to
other ships and it maintains its position of advantage and is
able to dictate the terms of engagement. I can think of no
better analogy to describe the Law of the Sea Convention than
providing the Coast Guard with the weather gauge to protect
Americans on the sea, protect America from threats from the
sea, and to protect the sea itself.
Since the founding of our Nation, American prosperity has
depended upon having safe, reliable, and secure maritime trade.
Today the Convention's provisions set forth the global maritime
framework, among other things. The Convention's provisions
contain internationally recognized sovereign maritime
boundaries. It is this framework that we rely upon every day to
aid mariners in distress, to protect our fish stocks, to
intercept illicit traffickers attempting to deliver drugs,
persons, and other illegal cargos to our shores, and to
preserve our maritime sovereignty, navigational rights, and
freedoms. Indeed, our many bilateral and multilateral law
enforcement agreements that we rely upon to stop drug
smugglers, interdict human traffickers, and protect our oceans
are predicated upon the Convention. These agreements, which
have been described as the fabric of the Law of the Sea, are
concluded, interpreted, and enforced under the Convention's
framework.
The Convention also provides us with the largest Exclusive
Economic Zone, or EEZ, of any coastal State. Our EEZ contains
vast fisheries, energy, and other resources. Beyond the EEZ
lies the Extended Continental Shelf, or ECS. Its seabed,
particularly off Alaska, is a new frontier that contains 20 to
30 percent of the world's untapped fossil fuel resources. And
it is the Convention that contains the mechanisms to seek and
ensure international recognition of our sovereign ECS rights.
Joining the Convention will not only put these sovereign rights
on the strongest legal footing, it will also bolster our
ability to ensure stewardship of our ECS resources.
There is no better example of this than the emerging
Arctic. Our ability to effectively plan and allocate Arctic
resources depends in part upon the delineation of maritime
boundaries, sovereign rights, privileges, and navigational
freedoms. Yet, as we work alongside our partner Arctic nations
on issues of governance such as cooperative search and rescue
agreements, oil spill prevention, and response protocols and
delineation of maritime claims, we remain the only Arctic
nation that is not a party to the Convention.
Being a nonparty detracts from our ability to best provide
for the safety, security, and stewardship of our vast resource-
rich maritime and emerging Arctic domains. The Convention
contains an established legal framework for the oceans. Unlike
customary international law which can change, the Convention
codifies this framework and we follow this framework. We demand
others do so. Yet, we remain outside of it.
In sailors' terms, this puts us downwind and it forces us
to tack up into the wind when we should be leading on maritime
issues. That is why I am urging you today to seize the weather
gauge and to accede to the Convention.
Thank you for this opportunity to testify and I look
forward to answering your questions.
[The prepared statement of Admiral Papp follows:]

Prepared Statement of ADM Robert J. Papp, Jr.

Good morning, Chairman Kerry, Ranking Member Lugar, distinguished
members of the committee, I am pleased to have the opportunity to
discuss how United States accession to the Law of the Sea Convention
would enhance Coast Guard operations and advance our global leadership.
Like the six commandants before me, I am firmly convinced that the
legal certainty and stability accorded by the Convention will
strengthen Coast Guard efforts in: (1) sustaining mission excellence as
America's maritime first responder; (2) protecting American prosperity;
and (3) ensuring America's Arctic future.
The United States is a maritime and Arctic nation. We have one of
the world's longest coastlines, measuring more than 95,000 miles, and
the world's largest Exclusive Economic Zone (EEZ), responsible for over
$122 billion in revenue annually. The U.S. maritime transportation
system is comprised of 361 ports and thousands of miles of maritime
thoroughfares that support 95 percent of U.S. foreign trade. Most of
that trade is transported on over 7,500 vessels that make more than
60,000 visits to U.S. ports annually. The need to secure our maritime
rights and interests, including ocean resources, is paramount. To this
end, the Coast Guard maintains a persistent maritime presence to
protect Americans on the sea, to protect America from threats delivered
by sea, and to protect the sea itself.

SUSTAINING MISSION EXCELLENCE AS AMERICA'S MARITIME FIRST RESPONDER

As one of the five armed services of the United States, the Coast
Guard provides support to the geographic combatant commanders and U.S.
naval presence around the world to ensure the Nation's national
security. The ability to navigate freely in international waters,
engage in innocent and transit passage, and enjoy high seas freedoms
are critical rights under international law, which the Convention
codifies. These rights allow our cutters and aircraft to move without
the permission of or need to provide advance notice to other coastal
nations. I add my voice to the other armed services in urging that we
``lock in'' these crucial rights through the Convention to protect them
from erosion.
We currently assert navigational rights and freedoms based on
customary international law, and we will continue to do so if necessary
to fulfill the responsibilities the Nation entrusts to us. But
customary international law can evolve over time and is subject to
change and erosion. By becoming a party to the Convention we will
secure these favorable rules on the strongest legal footing and better
position the Coast Guard to exercise these rights to sustain
operations. For the Coast Guard, one of the Convention's most important
provisions is the stabilization of territorial sea claims to 12
nautical miles. Joining the Convention strengthens our position to
contest and curtail foreign excessive territorial sea claims.
Although we do not recognize excessive territorial sea claims made
by some other nations, they nevertheless impact our mobility and can
interfere with our drug interdiction and other law enforcement
activities. By limiting territorial sea claims to 12 nautical miles,
the Convention secures vital boarding rights for the Coast Guard
outside this zone. Similarly, the Convention secures the important
rights of approach and visit to determine vessel nationality. Where
vessel nationality is not properly established, the Convention provides
the process for concluding that a vessel is stateless and allowing the
enforcement of U.S. laws. These provisions are particularly important
to our efforts to interdict and prosecute smugglers using stateless
vessels for illicit activity, including semi- and fully submersible
vessels. Last year, the Coast Guard interdicted 40 vessels and six
semisubmersibles engaged in drug trafficking, assimilating many of
those vessels to stateless vessels.
For many of the laws the Coast Guard enforces, especially those
involving drug trafficking, illegal immigration, and counterterrorism,
we leverage international partnerships to monitor, interdict, and
prosecute those who threaten our Nation's security. Our international
partners are overwhelmingly parties to the Law of the Sea Convention.
Our status as a nonparty presents an unnecessary obstacle to gaining
their cooperation. Accession to the Convention would most effectively
cement a common cooperative framework, language, and operating
procedures used in securing expeditious boarding, search, enforcement,
and disposition decisions, thereby enabling on-scene personnel,
cutters, and maritime patrol aircraft to pursue further mission
tasking.
We also must cooperate and engage with our international partners
to advance global and regional security priorities. Strengthening these
relationships is crucial for sustaining our international leadership.
Acceding to the Convention is an important step to achieving these
goals. Frequently, the Coast Guard works internationally to train other
nations' navies. These navies more closely resemble the Coast Guard in
authority and activity, uniquely positioning us to expand important
maritime partnerships. The Convention serves as our guiding framework
in helping these navies develop domestic law, protocols, and
strategies. The Coast Guard needs the Convention to better promote
United States security interests through capacity-building. Building
this capacity is an important force multiplier for the Coast Guard that
further secures stability of the oceans, promotes efficient maritime
commerce, and aids us in achieving strategic objectives regarding
safety, security, and environmental protection.

PROTECTING AMERICAN PROSPERITY

Joining the Convention will enhance the Coast Guard's ability to
protect America's prosperity by facilitating commerce and preserving
ocean resources. Commercial ships, which are the engines that drive the
international supply chain, rely on the same navigational rights as our
cutters to traverse the oceans. Joining the Convention guarantees that
commercial ships will continue to enjoy these same rights and
navigation freedoms, assuring that maritime shipping remains the most
cost-efficient mode of transportation. America needs the Convention to
secure stability in maritime trade, boost economic confidence, and open
the door to exploitation of deep seabed resources by U.S. industry.
Vibrant and safe U.S. ports are also vital to a healthy and
thriving economy. The safety of U.S. ports, and the vessels that call
on them, is a function of U.S. port state control. The Coast Guard
maintains a comprehensive port state control program, including vessel
inspections, assuring the proficiency of mariners, and monitoring port
activity to ensure compliance with the highest standards of maritime
safety, security, and environmental protection. Uniform international
standards, negotiated and adopted through the International Maritime
Organization (IMO), are the foundations of this program. These
standards, accepted by the international community, are the linchpin of
a transportation system that depends on speed--inconsistent and
misunderstood standards only lead to expensive delay and mishaps.
In international maritime shipping, where a ship may be flagged by
one jurisdiction, owned by a party in another jurisdiction, chartered
by a party in yet another jurisdiction, sail through the coastal zones
of several jurisdictions, and call in the ports of many other
jurisdictions, uniformity of standards is key. The concept of port
state control recognizes responsibility through the hierarchy of a
ship's affiliations (including owner, ship classification society, and
flag state) to comply with these internationally agreed standards,
which should result in compliance wherever a ship is located, including
when it sails through waters of the United States but is not calling on
a U.S. port (and thus not subject to our port state jurisdiction).
The shipping standards negotiated at the IMO are the fabric of the
port state control regime that is underpinned by the Convention. It is
the Convention that sets forth the responsibilities of flag states,
port states, and coastal states for shipping, and the Convention is the
agreement that holds nations accountable for adhering to those
responsibilities. Because of the currently anomalous situation where
the United States is a party to the substantive IMO standards, but not
the underlying legal framework of the Convention, our ability to ensure
comprehensive global accountability demanded by the port state control
framework is weakened. Acceding to the Convention would strengthen
Coast Guard negotiation efforts at the IMO, where we lead in the
continued development of these important international standards.
Although other countries look to us for leadership, there is growing
skepticism for certain U.S. negotiating positions because the United
States is not a party to the Convention. Becoming party to the
Convention would increase the Coast Guard's credibility as a leader at
IMO and result in greater effectiveness in ensuring that U.S. interests
are reflected in the standards that are ultimately adopted. The Coast
Guard needs the Convention to better promote United States safety,
security, and environmental interests at the IMO.
The Convention also maximizes legal certainty for United States
sovereign rights over ocean resources in the largest EEZ in the world,
as well as energy and mineral and other resources on our Extended
Continental Shelf. The Convention provides the mechanism to assure
international recognition of additional United States sovereign rights
on an Extended Continental Shelf. Moreover, due to overfished and
depleted fish populations, effective management of migratory fish
stocks and fisheries will continue to be a contentious issue for the
foreseeable future. The Convention is widely accepted as the legal
framework under which all international fisheries are regulated and
enforced. The Convention imposes responsibilities on the coastal states
to manage their fishery resources responsibly and provides a process
for resolving conflicts between competing users. The Coast Guard
defends United States sovereign rights by protecting our precious ocean
resources from poaching, unlawful incursion, and illegal exploitation.
Joining the Convention places these sovereign rights on a firmer legal
foundation, bolstering the Coast Guard's continued ability to ensure
our Nation's sovereign rights are respected.
In particular, becoming a party to the Convention will give the
Coast Guard greater leverage in our efforts to eliminate illegal,
unreported, and unregulated fishing. American fishermen are currently
abiding by standards contemplated by the Convention and further
detailed in the related U.N. Fish Stocks Agreement. They are adversely
affected by foreign fishermen who illegally harvest highly migratory
fish stocks. In another anomalous situation, the United States is a
party to the U.N. Fish Stocks Agreement, which is directly related to
the legal regime of the Law of the Sea Convention, even though we have
not joined the underlying Convention. As a party to the Convention, we
would be in a stronger position to persuade other nations to abide by
the U.N. Fish Stocks Agreement and other modern international standards
of fisheries management and thus advance our Nation's interests in this
field.
The Convention also provides a framework for the United States, as
a coastal state, to address marine pollution from foreign sources at
the international level. The Convention's environmental provisions
support the Coast Guard's strategic goal and statutory mission to
enforce existing U.S. environmental laws relating to the oceans. Even
spills far offshore can have devastating impacts to the economic well-
being of Americans whose livelihoods depend on the oceans. The Coast
Guard is the Nation's first responder for any oil spill on the ocean.
We need the strongest legal footing possible to confront any crisis on
the ocean, particularly in the case of transboundary pollution. As
other nations increase their offshore energy production and exploration
efforts in areas close to our shores, it is imperative that the Coast
Guard work cooperatively with those nations to prevent and respond to
incidents. The Convention provides a primary basis of cooperation, but
unlike all our neighboring nations, the United States is not a party.
Joining the Convention will give the Coast Guard a much-needed
additional tool to reduce the risk of marine pollution from foreign
nations and vessels from reaching our waters and shores.

ENSURING AMERICA'S ARCTIC FUTURE

As the ice pack in the Arctic recedes, more use will be made of
those waters, greatly increasing American economic interests in the
region. Melting ice in the Arctic also raises the significance of
issues such as rights of navigation and offshore resource exploration
and extraction and environmental preservation and protection. The Coast
Guard has robust statutory authority to protect U.S. interests in the
Arctic. The Coast Guard has been operating in the Arctic since Alaska
was a territory, and our responsibilities will continue to expand with
America's interests. As an example, the United States is in the midst
of implementing a comprehensive maritime search and rescue agreement
with other Arctic nations, yet the United States is the only Arctic
nation not a party to the Convention. Additionally, we are negotiating
a new agreement with our Arctic neighbors on oil pollution preparedness
and response in the region. The Convention is also the ``umbrella'' for
those discussions. Our negotiation position would be much stronger if
the United States were a party to the Convention.
Arctic nations are using the Convention's provisions in article 76
to file Extended Continental Shelf submissions with the Commission on
the Limits of the Continental Shelf to perfect their claims to areas
over which they have exclusive rights to resources on and beneath the
Arctic seabed. A United States submission to the Continental Shelf
Commission could help perfect U.S. claims to major additional seabed
resources out to 600 miles from the Alaska coast, far beyond the 200
mile EEZ. This area implicates many of the Coast Guard's missions,
including protection of the marine environment.
We must continue to seek out opportunities with our Arctic
neighbors and the global community to address the critical issues of
governance, sovereign rights, environmental protection, and security in
the Arctic. While there are many challenges, the increasingly wet
Arctic Ocean presents unique opportunities. The Convention provides the
key legal framework we need to take advantage of these opportunities.
The Coast Guard needs the Convention to ensure America's Arctic future.

WHY ACCEDE NOW?

The Convention and the subsequent 1994 Agreement on implementing
Part XI were diplomatic triumphs for the United States. These documents
preserve and protect our interests by codifying international law that
is highly favorable to the United States as both a coastal state and
preeminent maritime power. In order for the Coast Guard to most
effectively use the Convention's provisions, the United States must
become party.
For decades, we have largely acted in accordance with a treaty that
we have no ability to shape and without the additional benefits that
come from being a party. We need to lock in the favorable navigational
rights that our military and shipping interests depend on. We need to
be a party as the best way to secure international recognition of our
sovereign rights over our Extended Continental Shelf. We need to be a
party to influence and lead the further development of the
international rules governing the oceans. Too much is at stake to rely
on the inherently changeable nature of customary international law to
protect our Nation's economic and security interests. Joining the
Convention will best position us to protect the rights accorded by the
Convention and to defend against any attempt to erode those rights.

CONCLUSION

The Coast Guard needs a comprehensive legal framework that
addresses activities on, over, and under the world's oceans to further
its statutory missions. We also need a solid legal framework that
customary international law cannot provide as it remains subject to
change based on state practice--whether at the local, regional, or
global level. The Convention is this certain framework. The Convention
was, and still is, a resounding success for U.S. diplomacy. Acceding to
the Convention will strengthen the Coast Guard's ability to protect
U.S. maritime interests. The Convention is widely accepted; there are
currently 162 parties. Of the eight Arctic nations, only the United
States is not a party to the Convention.
I can see no downside to the Coast Guard in the United States
acceding to the Law of the Sea Convention. To the contrary, joining the
Law of the Sea Convention will immensely enhance the Coast Guard's
ability to address emerging threats that challenge our Nation and
safeguard the American people, our environment, and ocean resources
that benefit all Americans.

The Chairman. Thank you very much, sir. We appreciate it.
General Fraser.

STATEMENT OF GEN. WILLIAM M. FRASER III, COMMANDER, U.S.
TRANSPORTATION COMMAND, SCOTT AIR FORCE BASE, IL

General Fraser. Chairman Kerry, Ranking Member Lugar, and
distinguished members of this committee, it is indeed my
distinct privilege to be here with you today representing the
United States Transportation Command. I appreciate this
opportunity to testify concerning the Law of the Sea
Convention, and I join an array of other senior military
officers, both past and present, which support the Law of the
Sea Convention.
The United States Transportation Command is the Department
of Defense's distribution process owner and global distribution
synchronizer responsible for planning global deployment and
distribution operations. USTRANSCOM relies on unfettered global
mobility, unimpeded flow of cargo by air and sea through
strategic chokepoints and unchallenged access to the world's
navigation lanes by our military assets and our commercial
industry partners to support our forces around the globe. On
any given day, USTRANSCOM has approximately 30 ships loading,
unloading, or underway, and we have a mobility aircraft taking
off and landing every 90 seconds. These assets are operated by
our military components and our commercial partners. It is
vital that we maintain freedom of the high seas and
international overflight routes for our military and our
commercial operations as these freedoms are essential to our
Nation's strategic mobility.
Our military conducts activities and operations across air,
ocean, and sea-lanes. Unobstructed passage through these lanes
is paramount for the United States Transportation Command as we
provide support and sustainment to our warfighters around the
world. For example, our civilian air carriers and transporters
transport almost all of our military passengers and much of our
air cargo over the ocean and sea-lanes. Unhindered overflight
of these transports is crucial to our mission's success.
Moreover, the vast majority of our military equipment and
supplies are transported around the world through ocean and
sea-lanes by our commercial partners. They conduct these
movements typically without escort or onboard security teams.
In today's environment, we assess our navigation and
overflight rights through customary international law. To
better secure our global access, joining the Law of the Sea
Convention would provide a solid legal foundation to our
military and commercial partners that transport the lifeline of
supplies and equipment to our warfighters around the globe.
Specifically, accession to the Law of the Sea Convention
secures navigation and overflight rights for the vessels and
aircraft operated by both our military and our commercial
partners.
The Law of the Sea Convention protects our military
mobility by legally binding, favorable transit rights that
support our ability to operate around the globe anytime and
anywhere. Our sealift industry partners will be internationally
protected as they transit the strategic chokepoints from the
Strait of Gibraltar to the Straits of Malacca and Hormuz. As we
move forward and look to the future challenges, support of the
Law of the Sea Convention is essential to our national strategy
and security.
Chairman Kerry, Ranking Member Lugar, and all the members
of this committee, I want to thank you for your continued
support of United States Transportation Command, and to all of
our men and women in uniform and especially to their families.
I am grateful for this opportunity to be here today with my
distinguished colleagues at this table, and I ask that my
written statement be submitted for the record. I look forward
to your questions. Thank you.
[The prepared statement of General Fraser follows:]

Prepared Statement of Gen. William M. Fraser III

Chairman Kerry, Senator Lugar, and distinguished members of the
committee, it is my privilege as the Commander of the United States
Transportation Command (USTRANSCOM) to testify today on the Law of the
Sea Convention. As the Department of Defense's Distribution Process
Owner and Global Distribution Synchronizer, USTRANSCOM relies on
unfettered global mobility, unimpeded flow of cargo by air and sea
through strategic chokepoints, and unchallenged access to the world's
navigational lanes by our military assets and our commercial industry
partners to support our forces around the globe. I believe that a
comprehensive, globally accepted, and stable legal basis for navigating
and overflying the world's oceans is essential to support our forces
worldwide and to ensure our national security.
Joining this Convention would codify several important recognized
rights of navigation into a binding legal foundation. It supports our
national security interests by defining the rights of U.S. military and
civilian vessels as they meet our mission requirements, reaffirms the
sovereign immunity of our warships and other vessels owned by the
United States and used for government noncommercial service, and
preserves our right to conduct military activities and operations in
exclusive economic zones. As the defense strategy places greater
demands on our ability to mobilize forces, guaranteed access to
shipping and overflight lanes becomes increasingly important to support
our forces overseas.
Currently, the United States relies upon customary international
law as the primary legal basis to secure global freedom of access.
However, as emerging powers around the world grow and modernize, states
may seek to redefine or reinterpret customary international law in ways
that directly conflict with our interests, including freedom of
navigation and overflight, potentially challenging our global mobility
needs. This Convention represents the best guarantee against erosion of
essential navigation and overflight freedoms that we take for granted
through reliance on customary international law. Accession will give
the United States leverage to counter efforts by other nations seeking
to reshape current internationally accepted rules we depend on for
transporting cargo and passengers.
USTRANSCOM's military and commercial partners operate across every
portion of the globe in defense of our national interests. Before we
send them into harm's way, it is important for our sailors and airmen
to know they have the backing and authority of U.S. accession to the
Convention on the Law of the Sea rather than depending on customary
international law which some nations attempt to ignore or challenge.
This is especially true for strategic chokepoints such as the Bab Al
Mandeb, the Gulf of Aden, and the Strait of Hormuz. Iran's recent
challenge to freedom of navigation through the Strait of Hormuz for a
military exercise is an example of threats to international law and our
ability to move critical supplies through that region. Acceding to the
Convention would provide U.S. forces and commercial partners the
strongest legal footing for countering an Iranian antiaccess attempt to
close the strait to international shipping.
Being a member of the Convention will help to simplify this complex
maritime environment both for our military forces as well as our
commercial partners who have played a critical role in developing new
routes for transporting DOD cargo and in enabling access to a vast
global infrastructure for transport of DOD cargo. More than 90 percent
of all military supplies and equipment are transported around the world
by sea, much of it by commercial vessels. This Convention provides
important legal support for our commercial partners who transport our
cargo, unescorted by U.S. warships, under the legal regimes of the Law
of The Sea Convention. Without codification of those rights, our
commercial partners are at greater risk.
Likewise, the Convention will provide important legal support to
our civil air carrier partners who transport nearly all military
passengers and a significant amount of DOD air cargo over the sea. As
we continue to improve efficiency in air transportation, unimpeded
overflight access to the world's oceans and sea-lanes will remain a
necessary component to conducting our mission.
The Convention would also support freedom of navigation and
overflight in emerging areas of strategic importance including the
South China Sea and the Arctic. The defense strategy requires continued
and future access to navigational routes throughout Asia, particularly
in the South China Sea, in order to sustain our forces in that region.
As the Arctic becomes increasingly important for mobility, the
interpretation of the navigational provisions will become even more
critical. We need U.S. leadership as a party to the Convention to
influence and lead this discussion. In both regions, the Convention
will help defend our rights to transport cargo and personnel against
nations attempting to assert extended territorial claims.
The United States has a rich history as a maritime and aviation
leader in the international community. We must continue to lead in
ensuring access rights to shipping lanes and overflight routes.
Accession to the Law of the Sea Convention allows the United States to
continue to have a leadership role in developing and influencing the
Law of the Sea as a leader among sovereign nations. I strongly support
U.S. accession to the Convention.

The Chairman. Thank you very much, General.
Let me just say that all written testimonies will be placed
in the record in full as if delivered in full, and we look
forward to having them part of the record.
General Jacoby.

STATEMENT OF GEN CHARLES H. JACOBY, JR., COMMANDER, U.S.
NORTHERN COMMAND, PETERSON AIR FORCE BASE, CO

General Jacoby. Chairman Kerry, Senator Lugar,
distinguished members of the committee, thank you for the
opportunity to appear today.
As Commander of U.S. Northern Command, I am assigned
responsibility for military defense of our continental United
States homeland and nearby waters. As Commander of North
American Aerospace Defense Command, I am assigned
responsibility for maritime and aerospace warning and for
aerospace control to the Governments of the United States and
Canada.
Based on my command responsibilities, principally in the
Arctic, my experience, and our changing operating environment,
I believe there is a compelling reason for the United States to
accede to the Law of the Sea Convention for the safety and
security of our homeland. In the maritime environment, our
military defensive operations are best served by a clear,
stable, rules-based, cooperative international framework that
helps our friends and allies work with us, helping us be the
security partner of choice.
Now, Arctic cooperative security is one of the five lines
of operation delineated in U.S. Northern Command's theater
campaign plan. U.S. accession to the Convention, joining all
the other seven Arctic nations, would be helpful in supporting
peaceful opening of the Arctic, which is my mission, and in
dealing with non-Arctic States that have shown an interest in
engaging in the Arctic and in resolving sovereignty, natural
resource, infrastructure, communication, navigation, military
presence, and public safety issues in the Arctic as human
activity increases.
For our maritime warning mission, accession to the
Convention will help us establish the global operational
relationships that are critical to information-sharing,
recognition of patterns of activity, and quick identification
of safety, security, and defense issues.
We are grateful for everything the members of the committee
have done to ensure our ability to defend our citizens here at
home. I am honored to be here, and I look forward to your
questions.
[The prepared statement of General Jacoby follows:]

Prepared Statement of GEN Charles H. Jacoby, Jr.

Chairman Kerry, Senator Lugar, distinguished members of the
committee, I appreciate this opportunity to provide my position on the
Law of the Sea Convention. As a combatant commander with mission
responsibilities for homeland defense and civil support in the maritime
approaches to the homeland with an increasingly accessible Arctic
Ocean, I fully support our Nation's accession to the Convention. From
an Arctic perspective, our accession to the Convention is important to
encouraging cooperative relationships among Arctic states and securing
Continental Shelf limits and natural resources in the Arctic as human
activity increases. From a global perspective, with the overwhelming
majority of countries being party to the Convention, it is the
internationally recognized legal framework that will formalize our
Nation's standing and leadership where our vital interests are at
stake, secure U.S. rights over extensive marine resources, promote
freedom of navigation and overflight, and support our national security
interests in the maritime domain.
Acceding to the Convention will reinforce our leadership role in
shaping international maritime policy and overseeing peaceful economic
activity on and under our world's seas and oceans. Greater access to
the Arctic Ocean highlighted by Shell's exploratory drilling this
summer and the increasing trend in commercial shipping through the
Bering Strait are new circumstances that highlight the benefits the
United States can access through the Convention for continued economic
progress, freedom of maneuver, conservation of offshore resources, and
protection of the sensitive maritime environment. Joining the
Convention would help our Nation in each of these respects.
Cooperative partnerships are essential for our national security.
As human activity in the Arctic region increases, a cooperative and
peaceful opening of Arctic waters is in the interest of the global
community and in particular the Arctic nations. Accordingly, Arctic
Cooperative Security is one of the five lines of operation delineated
in U.S. Northern Command's Theater Campaign Plan. However, the United
States is the only Arctic nation that has not acceded to the
Convention, which could impede international cooperation and eventually
limit the development of cooperative partnerships with the other
members of the Arctic Council, Canada, Denmark, Finland, Iceland,
Norway, Sweden, and Russia. Future defense and civil support scenarios
in the Arctic maritime domain will require closely coordinated,
multinational operations in this expansive and resource rich region.
Therefore, U.S. accession to the Convention will set the conditions for
partnership and cooperation, resulting in more efficient and effective
multinational command and control and operations in the maritime
domain.
I support the current and past administrations' position, as well
as that of my primary interagency partner in the maritime domain, the
U.S. Coast Guard, to become a Party to the Convention. Joining the
Convention will protect and advance a broad range of significant
economic and national security interests, and ultimately contribute to
the peaceful opening of the Arctic in a manner that strengthens the
United States and international cooperation.
We are grateful for everything the members of this committee have
done to ensure our ability to defend the homeland. We appreciate your
support of our Soldiers, Sailors, Airmen, Marines, Coast Guardsmen, and
of their families for their efforts to defend our Nation at home and
abroad. With your help, North America will be even safer tomorrow than
it is today.

The Chairman. Thank you, sir. Thank you, General.
Admiral Locklear.

STATEMENT OF ADM SAMUEL J. LOCKLEAR III, COMMANDER, U.S.
PACIFIC COMMAND, CAMP H.M. SMITH, HI

Admiral Locklear. Chairman Kerry, Senator Lugar, and
members of the committee, thank you for this opportunity to
appear before you to discuss the subject of strategic
importance and how it relates to the Asia-Pacific region.
As the Commander of United States Pacific Command, I join
my colleagues and my other combatant commanders in recommending
that the United States accede to the Law of the Sea Convention.
After careful reflection, I am fully confident that our
accession to the Convention will advance U.S. national security
interests in the Pacific Command area of responsibility.
As you know, this region is predominantly maritime. It
covers half the planet. It is home to three dozen nations, over
3.6 billion people, the world's largest economies, a
significant part of our national economy, the world's largest
militaries, as well as some of the most important sea and air
lines of communication. As the United States military executes
our rebalance to the Pacific, acceding to the Convention is
essential to locking in a stable, legal framework for the
maritime domain that is favorable to our national interests and
preserves our access to this critical region. And as a Pacific
power, the United States must continue to lead the effort to
maintain security in the region which has defended freedom,
enabled prosperity, and protected peace there in that area for
more than six decades.
Joining the Convention will reinforce United States
international leadership in the maritime domain. The Convention
specifically codifies the rights, the freedoms, and the uses of
the sea that are critical for our forces to transit through and
operate in the waters of the Asia-Pacific region.
As the populations and the economies of the Asia-Pacific
region continue to grow, competing claims in the maritime
domain by some coastal states are becoming more numerous and
contentious. Some of these claims, if left unchallenged, will
put us at risk for our operational rights and our freedoms in
key areas of the Asia-Pacific. Nowhere is this more prevalent
than in the South China Sea where claimants have asserted broad
territorial and sovereignty rights over land features, sea
space, and resources in the area. The Convention is an
important component of a rules-based approach that encourages
peaceful resolution of these maritime disputes. Moreover, the
Convention codifies an effective balance of coastal state and
maritime state rights, a stable legal framework that we help to
negotiate that is favorable to our interests and that we should
leverage as a check on states that attempt to assert excessive
maritime claims.
Currently the United States is forced to rely on customary
international law as the basis for asserting our rights and
freedoms in the maritime domain and because we are not a party
of the Convention, our challenges are less credible than they
might otherwise be. By joining the Convention, we place
ourselves in a much stronger position to demand adherence to
the rules contained in it; rules that we have been protecting
from the outside since the 1980s and before.
Thank you for the opportunity to testify on this important
Convention as it relates to this critical region. I look
forward to your questions. Thank you.
[The prepared statement of Admiral Locklear follows:]

Prepared Statement of ADM Samuel J. Locklear III

Mr. Chairman and members of the committee, thank you for the
opportunity to testify before the committee today on this subject of
strategic importance.
As the Commander of U.S. Pacific Command (PACOM), I join Secretary
Clinton, Secretary Panetta, Chairman Dempsey, my fellow Combatant
Commanders, and numerous other current and former leaders within the
Department of Defense and United States Government in recommending that
the United States accede to the Law of the Sea Convention. After
careful reflection, I am fully confident that our accession to this
Convention would advance U.S. national security interests in the PACOM
area of responsibility (AOR). Specifically, the Convention sets forth
and locks in a rules-based order that protects military activities
which are vital to our operations in defense of the Nation, as well as
our allies and partners.
As you know, the United States is refocusing on the Pacific after
more than 10 years of war. As noted by Secretary Panetta, ``We continue
to face a challenging and complex global security environment, with
multiple transnational threats including violent extremism, the
destabilizing behavior of nations like Iran and North Korea, military
modernization across the Asia-Pacific, and turmoil in the Middle East
and North Africa.'' All of the foregoing challenges must be viewed
against the backdrop of the world's increasing dependence on trade and
commerce to and from the Asia-Pacific region.
It is critical for the United States to maintain its leadership
role in the Pacific in order to best protect our vital security
interests. As the Secretary of Defense stated in his testimony, a key
component of our strategy is to reenergize and strengthen our network
of defense and security partnerships throughout the Asia Pacific
region. An area of universal interest among our allies and partners is
protection of the rights and freedoms that underpin all nations' access
to and uses of the world's oceans. Joining the Convention will ensure
seamless integration of international legal authorities between our
forces and those of our partners and will place the United States in
the best possible position to continue to lead international efforts in
the maritime domain.
Most important to me as the Commander of U.S. Pacific Command are
the protections contained in the Convention for our navigational rights
and freedoms, over-flight rights and freedoms, military activities, and
our rights to transit international straits and choke points without
impediment. With more than half the world's ocean area within my AOR,
forces assigned to me rely on these basic rights, freedoms, and uses
daily to accomplish their mission. All of the foregoing rights and
freedoms are specifically protected by the Convention.
As we look into the future, our status as a nonparty will
increasingly disadvantage the United States. Presently, the United
States is forced to rely on customary international law as the basis
for asserting our rights and freedoms in the maritime domain. In
situations where coastal states assert maritime claims that exceed the
rights afforded to them by the Convention, USPACOM challenges such
claims through a variety of means including the U.S. Freedom of
Navigation program, military-to-military communications, and diplomatic
protests issued through the State Department. When challenging such
excessive claims through military-to-military or diplomatic exchanges,
the United States typically cites customary international law and the
relevant provisions of the Convention. Unfortunately, because we are
not a party to the Convention, our challenges are less credible than
they would otherwise be. Other States are less persuaded to accept our
demand that they comply with the rules set forth in the Convention,
given that we have not joined the Convention ourselves.
In addition, as you know, customary international law depends in
part on State practice and is subject to change over time. This is less
so in the case of treaty or convention-based international law, which
comes from written and agreed-upon terms and conditions that are
contained in such treaties or conventions. Ironically, by not being a
party to the Convention and relying on customary international law, our
rights within the maritime domain are less well defined than the rights
enjoyed by virtually all of the other nations within the PACOM AOR, and
around the world with over 160 nations as parties. Moreover, by
remaining outside the Convention, we leave ourselves potentially in a
situation where other nations feel they can ignore the Convention's
provisions when dealing with the United States, in favor of what they
may view as less clear and more subjective obligations that may exist
in customary international law.
As the Asia Pacific region continues to rise, competing claims and
counter claims in the maritime domain are becoming more prominent.
Nowhere is this more prevalent than in the South China Sea. Numerous
claimants have asserted broad territorial and sovereignty rights over
land features, sea space, and resources in the area. The United States
has consistently encouraged all parties to resolve their disputes
peacefully through a rules-based approach. The Convention is an
important component of this rules-based approach and encourages the
peaceful resolution of maritime disputes. Here again though, the
effectiveness of the U.S. message is somewhat less credible than it
might otherwise be, due to the fact that we are not a party to the
Convention.
Some States in the USPACOM AOR have adopted deliberate strategies
vis-a-vis the United States to try to manipulate international law to
achieve desired ends. Such strategies are infinitely more achievable
when working within the customary international law realm, versus the
realm of treaty-based law. By joining the Convention, we greatly reduce
this interpretive maneuver space of others and we place ourselves in a
much stronger position to demand adherence by others to the rules
contained in the Convention--rules that we have been following,
protecting, and promoting from the outside for many decades.
Additionally, while Convention or treaty-based international law is
less subject to change and interpretation, it is not immune from
change. Parties can collectively agree to change the rule-set in a
treaty or adopt particular interpretations of its provisions, in
accordance with the terms of the treaty. Given that over 160 nations
are currently parties to the Convention, if the rule-set were to
change, we might no longer be able to argue that the existing,
favorable set of rules under the Convention reflects customary
international law. We would be forced to either accept the new rule-set
or act as a persistent objector, either of which would come with its
own risks. Moreover, our continued status as a nonparty allows states
an enhanced ability to co-opt the existing text of the Convention and
attempt to re-interpret its rules contrary to the original intent that
we and other maritime powers helped to negotiate. It would be much more
beneficial for the United States to lead the international community in
this crucial area of international law from within the Convention,
rather than from the outside.
In the past, questions have been raised about whether U.S.
accession would harm or otherwise undermine our security interests. It
is important to answer these questions directly and factually.
Questions include the following:
Will accession to the Convention force us to surrender U.S.
jurisdiction over military vessels? The answer is ``No.'' The
Convention specifically preserves the sovereign immunity of warships
and exempts them from the exercise of foreign jurisdiction. Given that
the Convention is clear on this point, exclusive U.S. jurisdiction over
our warships would be better protected through accession than is
currently the case.
Will accession restrict U.S. military operations and activities?
Here again, the answer is ``No.'' The Convention in no way restricts
our ability or legal right to conduct military activities in the
maritime domain. As stated by the Secretary of Defense, ``U.S.
accession to the Convention preserves our freedom of navigation and
over-flight rights as bedrock treaty law--the firmest possible legal
foundation for these activities.''
Will accession subject the U.S. military to the jurisdiction of
international courts? Again, the answer is ``No.'' The Convention
specifically permits nations to exempt from international dispute
resolution, ``disputes concerning military activities, including
military activities by government vessels and aircraft.'' State Parties
individually determine what constitute ``military activities.'' Current
and former leadership within the U.S. Government have given repeated
assurances that the United States would take full advantage of this
clause in its accession documents to exempt U.S. military activities
and protect them from the jurisdiction of international courts and
tribunals. In fact, this is specifically outlined in this Committee's
Draft Resolution of Advice and Consent of 2007 and continues to be
supported by the current administration.
Will accession hamper our ability to conduct maritime interdiction
operations, outside the piracy realm? The answer here is ``No,'' as
well. The United States conducts a wide range of maritime interdiction
and related operations with our allies and partners, virtually all of
whom are parties to the Convention. We rely on a broad range of legal
authorities to conduct such operations, including the Convention, U.N.
Security Council Resolutions, other treaties, port state control
measures, flag state authorities, and if necessary, the inherent right
of self-defense. Accession would strengthen our ability to conduct such
operations by eliminating any question of our right to avail ourselves
of the legal authorities contained in the Convention and by ensuring
that we share the same international legal authorities as our partners
and allies.
In conclusion, the United States is currently in a situation where
we operate outside of a treaty that we were largely responsible for
negotiating through which we obtained all our stated objectives, and
that has been joined over 160 other nations, including virtually all of
our allies and key partners. We conduct our actions consistent with
many of its terms, which we regard as customary international law, but
we do not obtain the benefits of the Convention available only to
parties. Now more than ever, the United States must be a leader in
preserving the rights, freedoms, and uses of the oceans that enable us
to protect our vital security interests in the maritime domain around
the globe. The diminishing group of countries outside the Convention
includes land-locked nations such as Uzbekistan, Tajikistan,
Afghanistan, and Bhutan, as well as rogue nations such as North Korea
and Iran. To best protect our vital national security interests in the
years to come, now is the time for the United States to lock in a
stable legal framework for the maritime domain, and send a clear
message to other nations in the PACOM AOR that the maritime freedoms
codified in the Convention are worth preserving and the Convention's
rule of law is worth upholding.

The Chairman. Thank you very much, Admiral. Thank you to
all of you for your testimony.
Let me begin. I want to try to clear up something and pick
up on a theme that Senator Lugar opened up in his opening
comments.
Some in our very diverse media platforms that we have
today, whether it is an editorial or a blog or whatever, have
tried to suggest, oh, you know, these guys from the military
are just coming there because the administration has told them
to come there and they are going to say what they have to say,
but we can sort of discount it. So I want to get right at that
right up front if I can.
Are each of you--I believe when you are confirmed, you
agree before the Senate that you will live up to sort of
individual advice and do what is in your conscience and so
forth. But are you appearing today--any of you--under any kind
of sort of order or coercion, or are you here because you
believe in this treaty and you are expressing your personal
view to the Senate as the best advice that you can give to the
Senate to perform our function?
Do you want to begin, Admiral Winnefeld?
Admiral Winnefeld. I would invite my colleagues to speak up
as well, but nobody twisted my arm in any way to be here today.
I am here because I believe we should ratify the treaty. Yes,
sir.
The Chairman. And the reasons you have given for the treaty
are reasons you believe in?
Admiral Winnefeld. Yes, sir.
The Chairman. Can we just run through the list in the order
that you testified or however you want to do it.
Admiral Greenert. Yes, sir, Senator. I am here to give you
my best professional and military advice on the treaty, and I
support the treaty fully.
Admiral Papp. Yes, sir. I fully believe in this. As I said
in my opening comments, as a practitioner, as a person that has
been out there operating on the seas for nearly four decades, I
believe in this, and more than anything else, I believe in it
because we have young lieutenants that are commanding patrol
boats. We have boatswain mates who are making law enforcement
boardings. And they need the clarity and the continuity and the
predictability that this Convention provides in terms of making
determinations on a daily basis on jurisdictional issues and
other things.
General Fraser. Chairman, I am here because I want to be. I
want to be especially because of not only the extensive career
that I have had and been on the receiving end of certainly the
support that an operation like TRANSCOM has provided but also
because of my study of this Convention and engaging our
commercial partners in the need for us to be able to deploy,
sustain, and then return home our warfighters whether they are
supporting humanitarian operations or responding to another
type of crisis. I will provide you my honest assessment.
General Jacoby. Chairman Kerry, I am here to support the
Law of the Sea based on my professional responsibilities, my
experiences as a commander in every theater, and I am fully
committed to this approach. Thank you.
Admiral Locklear. Senator Kerry, the men and women of
Pacific Command--they live this issue every day. They are
confronted with the aspects of ambiguities of not being a part
of this treaty. I am here because I support this treaty. I
support the framework it gives the military commanders, and
those that work under me, our ability to make decisions that
will be in the best interest of this Nation, that will be in
the best interest of ensuring that we can follow the rule of
law and not have miscalculations that lead us in directions
that we would not want to go as a nation. So I am here to
support this treaty, and I both professionally and personally
support it.
The Chairman. Well, I thank each of you. I had no doubt,
but I thought it was important to have those statements on the
record and I appreciate your candid answers.
Admiral Winnefeld, you made a statement in the beginning of
your testimony in which you talked about the misplacing of this
notion about giving up our sovereignty in any way. In fact, you
said it is the opposite. We would be growing our sovereignty.
Preliminary studies indicate that the Extended Continental
Shelf--it is not fully defined yet, and part of the reason for
joining this treaty, as I understand it, is to have that
clarity about our Extended Continental Shelf. But right now,
the estimates are that the Continental Shelf that we would have
exclusive rights to could conceivably be as high as l million
square kilometers, an area about twice the size of California,
nearly half of the Louisiana Purchase. So what we are looking
at here, are we not, is the opportunity for us to, in fact,
gain exclusivity and gain clarity with respect to the
exploitative rights over this vast area of additional land mass
to the United States? Is that accurate?
Admiral Winnefeld. Yes, sir.
The Chairman. And can you sort of explain? Some people say,
well, what the heck. You know, we got the strongest Navy in the
world. We are paying a lot of money for it. Nobody is going to
stand up to us. We will just go out and do what we want to do
and need to do, and if somebody gets in our way, we will
enforce it. What is wrong with that?
Admiral Winnefeld. Well, there are a couple things.
Specifically related to the Continental Shelf, notwithstanding
the potential economic benefits, which I think would be covered
in a different setting for the committee, we would have much
more control over, as you point out, the Extended Continental
Shelf. I think as of today, theoretically, absent a clear
delineation of that shelf, somebody could come in and
potentially prospect for resources at the 201 mile point away
from our coastline which, if the Extended Continental Shelf is
defined the way we think it ought to be defined under the
Convention, they would not be able to do. And now there comes
into question with Admiral Papp and how he would have to
enforce that under existing customary law or whether he would
have the full force of the Convention behind him.
The Chairman. Well, what is wrong with the approach of
people who say we will go just in and kick them out? What the
heck?
Admiral Winnefeld. Well, if the President tells us to do
that, we certainly would be ready and willing and able to do
it, but I think we would rather apply a legal approach and a
stepped forum before we got to the potential use of force.
The Chairman. Admiral Papp, can you speak to this question
of sort of added sovereignty?
Admiral Papp. Absolutely, sir. And while most of us and the
theme of this is looking at national defense, I would suggest
that national security--only part of that is defense. There is
also economic security, environmental security, and energy
security, and others that come into the whole equation of
national security. And when we are talking about the Extended
Continental Shelf and making determinations on where it might
be, we need that clarity.
And I have a slightly more nuanced view perhaps than my
colleagues because the Coast Guard is the one of the five armed
services that has the responsibility for law enforcement of
U.S. laws on our waters and on the high seas. So we look at it
from a law enforcement perspective. Use of force is one of our
last resorts and abiding through the rule of law. And so we
have to think on a daily basis how we conduct our law
enforcement operations and we need the predictability and
stability of what those determinations are based upon which the
Convention gives us.
The Chairman. Senator Lugar.
Senator Lugar. Gentlemen, you have discussed two areas that
I want to touch upon in these questions. One of them was the
growing complexity of the Arctic situation. This may, in part,
be because of the melting of ice flows or the ambitions of
other countries to create sea-lanes to have commerce in the
Arctic well beyond that which we have had before. It does raise
the points which you have made that it is not really clear just
in terms of law enforcement, in other words simply how and by
whom indiscretions of various people are addressed or rescue
missions for people who get caught in a situation are carried
out.
I am hopeful that one or more of you are doing some
scholarly work that is going to be of help to each of us to
explain what the circumstances are for a sea which either
expands or constricts or so forth quite apart from what the
claims may be in terms of sovereignty of all of the boundaries.
But I want to dwell specifically on the Pacific because we
had an interesting visit last week. Some of us visited with the
President of the Philippines. It is a very good time in terms
of our relations with the Philippines because of their growing
economy. President Aquino is a straightforward, honest
President of the Philippines. And furthermore, the Philippines,
having rejected our fleet from Subic and various other places
in recent years, now is very concerned about the definition of
where the rights are for the Chinese. The Philippines would
join Vietnam, Indonesia, and other countries in wondering
precisely who is going to enforce what for a variety of
reasons, in part because of these Law of the Sea questions,
which have come into the orbit of our diplomacy in a way that
we have not seen in the last decade.
Let me just ask any one of you, How are we going to work to
define who owns or governs or commands what in the South China
Sea? In that large area between China and the Philippines in
which there are extraordinary resources and certainly very
little definition of who does what and for the moment, a great
deal of reliance upon the United States fleet to bring some
definition to this. If we do not have Law of the Sea the
question is, How do we define it? What are we prepared to do
and what are the American people prepared to do? It is one
thing to talk about enforcing this and, in essence, going to
war over it, but at least in the old days, a declaration of war
was required and people really wanted to know if it was worth
the sacrifice of individual human beings.
Can anyone give me some idea of where we are headed in the
Pacific and the South China Sea particularly?
Admiral Locklear. Yes, sir, I can. In the South China Sea,
you have, I think, a great example of how the Law of the Sea
should play out if done correctly. Because of globalization,
the things that move in the oceans that move through the South
China Sea--half the energy supplies in the world move through
there daily. A third of our economy moves through there daily,
you know, all the things we talked about. So there are
competing claims from the various coastal states in there. We
have a tendency to want to talk about China, but there are a
number of countries that have excessive claims, and they are in
two areas. One is in territorial disputes and the other is in
maritime disputes.
So what the Law of the Sea would give us--it gives a
framework on territorial disputes which the United States takes
no position on territorial disputes between the Philippines and
the Chinese or any other excessive territorial claim. But the
Law of the Sea would give a framework for them to be able to
have that dialogue in a peaceful way. Our perspective is that
we do not want coercion. We want things done peacefully. We
want them done in a framework that allows that to happen. And
my understanding is that there are vehicles in the Law of the
Sea, if applied properly that would allow them that vehicle and
their desires of that in the ASEAN nations in particular.
The other side is excessive maritime claims, which are
clearly laid out in the Law of the Sea of what can be there.
And these are critical to us so that we can maintain our
unimpeded access to those areas for the future that allows us
to provide, if you want to call it, a security deterrent, that
allows us to--we have seven allies in the world; five of them
are in this region. And ensuring that our allies' perspectives
are looked at properly through a rule of law that allows us to
continue to operate freely with them is important. So this is
why the Law of the Sea Convention is important to me.
Senator Lugar. Yes, sir.
Admiral Papp. Senator, there is one other nuance. I have
been watching this. Admiral Locklear has the responsibility out
there, but the Coast Guard has responsibilities in the Pacific
as well. And one of the things we have seen China doing as an
indication that they are operating under the rule of law, they
are, in fact, many times now keeping their maritime patrol
vessels, more or less their coast guard vessels, which are less
provocative rather than sending large navy ships out there,
once again portraying themselves as following the rule of law
and acting within the Convention. We have no means of disputing
that unless we are parties to the Convention because I am
involved with the Chinese in the North Pacific Coast Guard
Forum and whenever we address issues like this, their first
response is but you are not a party to the Convention, and it
puts us in a difficult situation to deal with and it makes our
work much harder.
Admiral Greenert. Senator, if I may make a comment. This is
one of the things I would like to pursue--and the South China
Sea is just one part of the ocean. I organize, train, equip,
and deliver the ships to Admiral Locklear and others. And we
are looking forward to what I call a dependable, if you will,
or predictive behavior by the elements in these maritime
crossroads such as the South China Sea. If each interaction
ends up a debate or a confrontation, it becomes unpredictable,
and then you get unprepared, if you will, and then you get this
in situ debate which is OK if everybody is agreed upon what the
customary international law is. But it evolves and it becomes
domestically derived in some locations. That is kind of what we
have right now in the South China Sea.
So we say to ourselves, how do we preclude this? Well, we
should talk and not have belligerent behavior. So we pursue
things like the Military Maritime Consultative Agreement talks
with China for an example, and there are others. I host heads
of navies every 2 years in the International Sea Power
Symposium. Having something like the Law of the Sea Convention
as a book that we all have agreed to and we sit down and say,
OK, let us talk about the protocols that we are all kind of
going to agree to or what is the basis of the disagreement
would be very helpful.
Senator Lugar. I appreciate that. Each of you knows that we
got briefings here about the so-called pivot of our national
defense toward the South China Sea, toward the Pacific. So that
is why it is very crucial both in terms of what we are talking
about today as well as our overall national defense and foreign
policy.
Thank you very much.
The Chairman. Thank you, Senator Lugar.
Senator Cardin.
Senator Cardin. Thank you very much, Mr. Chairman.
And let me thank all of you for your leadership and your
service to our country.
You have all indicated that you support the ratification of
the Law of the Sea Treaty. We have been, at least, in
discussions of this for almost 20 years. So this has been an
issue that has been around the United States Senate for a long
time.
I would like to get from you an assessment as to whether
this is just something that would be nice to get out of the way
and done or whether this is an important issue as it relates to
our national security.
Admiral Winnefeld. I can start off, sir. I think it is an
important issue related to our national security. Some have
pointed out that there are no operations that we have been
unable to conduct because we have not become a party to the
Convention. And that, in fact, is true. But as we look to the
future, which is what this is really about, and we see some of
the erosions of customary international law that have been
referred to by Admiral Locklear and Admiral Greenert and
Admiral Papp, that is what we are really concerned about. And
we would rather not wait until that becomes a crisis for us. We
would rather get the treaty ratified now so we have got that
fundamental basis in international treaty law for us to do what
we need to do and to counter those who might be taking us on in
a maritime environment. So we believe it is an issue for
national security mostly in the future.
Senator Cardin. Is there any disagreement on that or any
further clarification?
Admiral Greenert. If I may, Senator, the Arctic, as
mentioned earlier by Senator Lugar, is a new area. I do not
know what is customary up there, and we are going to be
defining our behavior
and our protocols up there. Therefore, I would say this is an
opportunity.
Senator Cardin. In regards to the Arctic--and that is an
area that is emerging as to the issues. The issues that are
currently being thought of were not 10 years ago. So it is an
emerging area of great interest to the United States. As I
understand it, we are the only country that borders the Arctic
that is not a member of the--has not ratified the Law of the
Sea. Explain a little bit more as to how that disadvantages us
as these discussions are taking place?
General Jacoby. Senator, I am the Commander of Northern
Command. It is in my area of responsibility. The Arctic is a
fast-changing environment. It is harsh. There are few assets
available. Working together is really at a premium. It is the
opening of a new frontier, danger and uncertainty and also
opportunity. So the idea that the strongest, the fastest, the
most aggressive party can define the customary international
law is not the approach that any of the eight Arctic nations
desire to take. It would empower me, as I provide leadership on
behalf of the United States in the Arctic, to start with that
rules-based framework, the firmness of treaty law, in order to
start sorting through the uncertainty that we face up there.
And as I said, there is a large premium on working together in
the Arctic right now.
Senator Cardin. Thank you for that.
I want to get back to China for one moment because I think
back a decade ago when we were looking at China and say, gee,
we certainly should be able to manage our trade issues with
China. It was not going to be a major problem for America. And
now we see how this has developed. The maritime interest of
China seems to be expanding. They seem to be more bold than
they have been in the past, some of which we believe are not
appropriate under international law.
Can you tell us how ratification of the Law of the Sea
would put us in a stronger position vis-a-vis China as it
relates to its maritime ambitions?
Admiral Winnefeld. I can start and then turn it over to
Admiral Locklear.
One of the things, as we have talked about, is the concern
about erosion of law. And one of the areas where China has been
assertive is in writing national laws that would restrict
maritime activity in their Exclusive Economic Zone. And some of
that maritime activity is very important to us from a military
sense, and perhaps in a classified briefing later in the year
we can go over that. But without being a party to the
Convention, we really do not have a leg to stand on if we try
to invoke the Convention's clear rights in terms of our ability
to operate in that Exclusive Economic Zone. So that is again a
potential future source of friction. It is already a source of
friction but it could get worse, and we would like to see the
fundamental underpinning of accession to the treaty to back up
our rights in the EEZ to do what we need to do from a military
basis.
Over to Sam.
Admiral Locklear. I fully agree. It provides a solid,
fixed, and a favorable legal framework for us, first, to
protect U.S. navigation and overflight rights, as well as the
sovereignty of our ships and aircraft. So that is the first
thing it does.
You know, us being part of the Convention, it aligns our
international legal authorities with those of our allies and
our partners and our friends who are in that region, which is
important. I think it would strengthen our standing to support
our allies who are dealing with some of these issues
particularly in the South China Sea. And they are trying to
find a mechanism to align their maritime claims with
international law, and so it would improve our overall support
and our standing as we try to get them to resolve in an ever-
increasingly complex environment. We have to look forward I
think here, not in the rear view mirror.
The complexity of the maritime environment, because of the
demand for resources, because of the amount of goods--10 years
ago, the amount of things that float on the ocean across the
sea lines--in that 10 years, it quadrupled because of the
globalization of the economy. So we need to make sure that we
are able to work through these disputes from a solid, fixed,
favorable legal framework rather than resulting to every one of
these issues being a standoff that could potentially lead, I
think, us down a path that we do not want to go.
Senator Cardin. As I understand it, in the 1990s when this
treaty was first brought to the Senate, there were concerns.
Those concerns were shared by some of our allies. Modifications
were made and our allies went ahead and ratified the treaty.
The Senate has not followed suit.
From your testimony here today, am I correct to say that
you believe today it is more important to ratify the treaty
than it was a decade ago, that circumstances on the sea
continue to present additional challenges that the Law of the
Sea would help America in promoting its national interests and
its national security? Is that a fair assessment, that it is
even more important today than 10 years ago because of the
emerging issues?
Admiral Winnefeld. Absolutely. A decade ago, there were not
as many nations who were asserting their claims into the
maritime environment in the way they are as there are today,
and those excessive claims continue to grow. So I would say
definitely compared to 10 years ago, it is more important today
than it was.
Senator Cardin. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cardin.
Before I recognize Senator Corker, let me just quickly--on
your question about the Arctic, I just wanted to comment.
I believe the Russians are sending their fifth mission into
the Arctic to do plotting this summer, and the Chinese have
been up there in a very significant way. Is that not accurate?
General Jacoby. Yes, Senator, that is.
The Chairman. Again, this will be part of our classified
briefing for all the Members, but it is quite significant what
is happening there without recourse in any legal way. Is that
correct?
General Jacoby. That is correct, Senator.
The Chairman. Senator Corker.
Senator Corker. Thank you, Mr. Chairman.
And thank each of you. And I do believe that each of you
are here espousing your own views. I also know that sometimes
we can have silos where one part of our Government wants
something to happen and other parts may be jeopardized. And
that is our role here is to balance all of those off. But we
thank you very much for being here and certainly for your
service.
Admiral Locklear, my friend and colleague, Senator Lugar,
asked you about China and the Philippines. It looks to me like
that it is just the opposite of what we just said, that those
two countries are signatory to the Law of the Sea Treaty. There
is a dispute and there is no resolution. It looks to me like
that the Law of the Sea Treaty is not working as it should be
with two countries having a dispute and both being signatory. I
would like for you to explain why the Law of the Sea Treaty has
not already resolved the conflict there and what is it about it
that is failing.
Admiral Locklear. Yes, sir. I think your perspective is
correct. It has failed them to some degree, but I think it has
not been tried in some of these areas that are now emerging.
And I believe that there is opportunity. And I get from all of
our----
Senator Corker. What do you mean it has not been tried? I
mean, we have a conflict there. They are in dispute, and it
looks to me like China has basically said we are sorry. We are
not going to adhere to the treaty document. So how is it
working?
Admiral Locklear. Well, at this stage, my understanding is
that the Chinese want to solve this in a bilateral relationship
with the Philippines.
Senator Corker. So the treaty is not working if they are
doing it in a bilateral way. Is that correct? I mean, is there
not a group----
Admiral Locklear. The treaty provides mechanisms should the
Partner States choose to use it or the signatory States choose
to use it. So our perspective in our dialogue with our allies
and our partners, as well as the Chinese, is that we want them
to resolve this using standard rules and to use those
mechanisms that are outlined in the Convention rather than a
bilateral way where you may end up having a coercive
perspective from one party or the other that drives a decision
in a direction that we would not want it to go.
Senator Corker. Yes, but it sounds like China is saying we
do not care what you think. We do not care that we are members
of the treaty. We want to resolve it in a bilateral way. So, I
would just say, to me it points to failure. We have a real-live
example of a failure of this treaty.
Admiral Winnefeld, let me ask you this. You kept saying
that this in no way affects our sovereignty. But then you kept
saying that if we are not a member, key decisions are being
made that affect our sovereign rights. How can both be true?
Admiral Winnefeld. I would say, first of all, I want to add
a little bit to what Sam Locklear said. One of the things that
helps us in the South China Sea is that when we have the
Association of Southeast Asian Nations--ASEAN--nations aligned
together pushing against China, China tends to listen, and when
they can cut out somebody from the herd and go bilateral, then
they will tend to not go under treaty mechanisms.
So if we are a party to the Law of the Sea and we can put
our political power, our diplomatic power behind that, it would
tend to buttress the ASEAN nations into potentially supporting
the Philippines and what have you. So the Law of the Sea is not
a magic formula to resolve a dispute between China and the
Philippines. Nobody is claiming that, but I think it would
allow us to have a little more credibility in entering into
that environment.
And then in terms of sovereignty piece, what we would like
is we will be able, as a party to the Convention, to have
direct influence over how the Convention is applied. We will be
able to more fundamentally and with more credibility apply what
is now customary international law that is embedded in the
Convention.
Senator Corker. But specific--I understand all those
things. We are a member of the club and therefore we can
influence the rules of the club.
But if key decisions are being made right now because we
are not a party to the treaty that affect our sovereignty, how
can you say that the treaty does not affect our sovereignty? It
sounds like----
Admiral Winnefeld. Because, Senator, we would be in the
mechanisms of the treaty and able to counter those decisions.
Senator Corker. Well, wait a minute. You cannot say on one
hand that the treaty in no way affects our sovereignty and then
say that decisions are being made that affect our sovereignty.
You cannot say that and it be true.
Admiral Winnefeld. What I am saying is by not being a party
to the Convention, we lose the opportunity to preserve our
sovereignty. So if we lose the opportunity----
Senator Corker. By virtue of you saying that, you are
saying the treaty then has pieces of it that affect our
sovereignty.
Admiral Winnefeld. It positively affects our sovereignty
and avoids negative impact on our sovereignty. So, for example,
the Extended Continental Shelf piece--we will not be able to
assert that right unless we accede to the treaty. Nobody will
pay attention to it. So theoretically somebody could come in to
201 miles off of our coast and explore for natural resources,
and we do not have the power of the treaty behind us to say,
sorry, you cannot do that.
Senator Corker. You know, Admiral Papp, can you give me one
example where us not being a party to this treaty has ever
impacted your ability to board a ship or enforce U.S. law? One
live example.
Admiral Papp. Oh, absolutely, sir. We have countries within
South and Central America that have excessive territorial sea
claims, and oftentimes when you have these questions about
jurisdiction, we may have intelligence or we may have a target
which we believe is smuggling drugs or people and we cannot
gain cooperation from these countries that are outside the
Convention. We are outside the Convention. They have
jurisdictional claims. We do not have the mechanism for
disputing this. And on a routine basis, not only do we lose
cases, but oftentimes we lose time--our cutters and crews--
while we go through protracted negotiations on jurisdictional
disputes between countries for, in particular, drug
interdiction.
But I would add. You know, we are focused on some of the
countries that are challenging us around the world on a day-to-
day basis, and I think to buttress what Admiral Winnefeld is
saying, even with our closest friends, we have disputes that
only can be resolved within the Convention. Our border between
Canada and Alaska is under dispute and we cannot negotiate with
all the tools in our tool bag with Canada unless we are members
of the Convention. We have waters in northern New England
between Maine and Alaska where we have jurisdictional disputes
in terms of transit that has prevented an LNG port to be
developed in Passamaquoddy, ME, because Canada will not allow
us to have free and unimpeded passage because--and I think they
are on very loose footing here--we cannot negotiate because we
are not members of the Convention.
So it is not just with countries that challenge us. It is
also with our friends as well. And those can be played against
us because we have not signed onto the Convention.
Senator Corker. I find it hard to believe we could not
reach a bilateral agreement with Canada. It sounds a little
far-fetched, but I would love to talk to you more about it.
One last question. I get the impression that we feel like
that if we were a party to the Law of the Sea Treaty that it
would cause us to have some savings as it relates to dealing
with maritime issues throughout our Navy. Is that correct,
Admiral?
Admiral Winnefeld. I do not know that there is any
influence on the----
Senator Corker. Well, we are talking about the cost. We
have a lot of cost because we are not part of the treaty. We
have to do things in a very different way. I mean, it seems to
me that I have heard that throughout the testimony here today.
Admiral Winnefeld. I do not think any of us have expressed,
Senator, that it would be more costly for us if we did not
accede to the treaty in terms of financial terms. We are not
going to have any different size of Navy if we do or do not
accede to the treaty. It just gives us another tool in the
toolbox to do business as a navy and as a nation.
Senator Corker. Well, listen, I respect each of you. I will
say that today's testimony--and I thank you very much for your
public service. It to me has fogged things up more than it
began. I very much appreciate it. I look forward to many one-
on-one meetings as we hash this out. And I thank you very much
for your service to our country.
The Chairman. Senator Webb.
Senator Webb. Thank you, Mr. Chairman.
Let me begin by just offering an observation on the
exchange that just took place. Without getting to the issue of
sovereignty--and there are sovereignty issues involved clearly
in what we are attempting to do in places like the South China
Sea--I would just say, as an observation that treaties in and
of their nature compel certain actions by our country. That is
why we come together and undertake this process very carefully
before we ratify a treaty. And they also cause an agreement
among our governmental people to abide by certain standards
that are in a treaty. That is what a treaty is about. That does
mean that in a treaty, at least in my opinion, we are going to
be giving up any of our sovereignty rights. Just let me start
with that.
Before I get into my question, I would like to join the
chairman in recognizing Senator John Warner for his presence
here today. He has been working on this issue for a very long
time from the time that he was in the Department of the Navy
and I was a 25-year-old marine on his staff. That was a long
time ago and it was a pleasure to follow Senator Warner as
Secretary of the Navy and also to be able to serve with him
here in the Senate as my senior partner. I have tremendous
regard for all of his service and the work that he has done on
this area.
I believe that the indisputable starting point in this
discussion really is that the international rules of the road
for security and also for commercial exploration have never
been more complex. This affects the issues of freedom of
navigation, as you have discussed several times this morning.
Those are basically tactical questions. It also affects issues
of sovereignty. Those are strategic questions. And following
issues of sovereignty, in and of itself, it unavoidably
involves commerce and how our Nation interacts in a lot of
areas that right now are not clear in terms of who has those
rights. That is apparent in the Arctic, as has been discussed.
It is also clear in such areas as the Senkaku Islands where
after a number of years of quiet dispute in 2010, Japan and
China had a blowup over sovereignty that could have involved
our security treaty with Japan if it had gone further.
It is clearly apparent in the South China Sea. From our
office, we initially offered a Senate resolution condemning the
Chinese actions a couple of years ago involving the use of
military force in the Philippines and off of the coast of
Vietnam. We had a unanimous vote by the Senate that had two
very important pieces in it, I think, in terms of the
expression of the Senate. One was deploring the use of force by
naval and maritime security vessels from China, and the other
was calling on all parties to refrain from threatening the use
of force and to continue efforts to facilitate multilateral
peaceful processes as we address these issues.
And that to me is the most important component of what we
are talking about today. We need to find the right forum to
address disputes where claims can be resolved with the
agreement of multiple claimants. And this is a key point when
we are discussing the activities of China particularly to this
point. Not only China. You go to the Spratlys, there are five
claimants. You go to the Paracels, you have two. There are a
lot of these that are potentially going to affect sovereignty
rights and eventually commercial competition.
ASEAN has been mentioned. ASEAN is an evolving entity. It
is a very important entity: 10 countries, 650 million people
with widely varying governmental systems among them. They have
been struggling for 10 years now to find rules of navigation in
sovereignty to try to calm down the process in this part of the
world. They have issued a proclamation in 2002 trying to lay
down rules of the road. They issued another one recently.
We have not been totally successful with China. We all know
that. But we have been attempting to develop a number of
different ways to encourage China to come into the solutions
process on a multilateral basis.
From our office, we have done the same thing with respect
to the Mekong Delta where China does not recognize downstream
water rights from the Mekong River with all the damming that it
has done upstream. That makes it very difficult to bring China
into a multilateral solutions process, and there is no place
that it truer than when we look at the sovereignty rights and
the future of the activities in commercial endeavors in the
South China Sea.
For that reason, I think this is a format that will greatly
assist us in the future, and I know that there are questions on
the other side. I am sure all of you have seen the editorial in
the Wall Street Journal yesterday that was written by former
Secretary of Defense Rumsfeld where he said the treaty remains
a sweeping power grab that could prove to be the largest
mechanism for worldwide redistribution of wealth in human
history. I know that is not necessarily in any of your
portfolios, but I would like to hear from you.
What is the downside? What is the downside of this treaty?
Is there, in your view, a downside, Admiral?
Admiral Winnefeld. On the security side, I am not aware of
any downsides that we can point to. In fact, the upsides are
really why we are here today. As I mentioned, it very much
improves the 1958 Geneva Conventions. It codifies in treaty
law, not customary law, the things that we need to do day in
and day out as a navy and as a force. So on the security side,
I know of no downside. I have explored the commercial side, and
it is complex. But it seems to me as though this treaty was
negotiated and modified in 1994 to our advantage, but I would
leave the economic experts to discuss. But I see no downside on
the security side.
Admiral Greenert. Senator, if I were to think of a
downside, it would be misinterpreting the advantages of what
this will do for us. It is not going to solve everybody's
problems, and you laid out some very clear issues that we have
been dealing with for years and years from Senkaku, et cetera.
I think feeling that the Law of the Sea Convention will solve
unto itself, because it establishes law, is wrong. Now we need
to roll up our sleeves and go use it as the instrument to now
sit down with nations because we have a consistent instrument
that we can use.
Senator Webb. Admiral Locklear.
Admiral Locklear. Yes, sir. I see no downside from a
security perspective. I see a downside on the status quo,
though. One is it leaves us relying on customary international
law, which I think is going to morph in a way that we cannot
predict. It leaves us outside the full international legal
framework that governs these rights and obligations and the
actions of our allies, partners, and friends. It weakens our
standing to object to inappropriate actions of other States
that violate the Convention. I mean, 160 countries have signed
up for this thing. They do not all follow it to the letter of
the law, but we are not in there to be able to object to that.
And I think it weakens our ability to shape potential changes
to the Convention that we may want to see in the future.
Admiral Papp. Senator, I find it interesting. You used the
rules of the road in the beginning of your statement there. In
fact, to me that is one of the greatest analogies here. The
rules of the road for centuries were determined by customary
international law. The challenge was, particularly as we went
from sail to steam and vessels approached each other much more
quickly, everybody had their own version of customary
international law, and consequently collisions occurred. All
countries agreed at a certain point to collision avoidance
regs, or COLREGS, which standardized things across the entire
world for mariners at sea. There is stability. There is
continuity. There is predictability in those rules which
sailors depend upon. And I think that is a perfect analogy for
us. If we continue under customary international law, it
changes and everybody has a different view of it. We have
negotiated ourselves in a position where this is most favorable
to us. It is almost like having a lottery ticket--a winning
lottery ticket--that you do not cash in and you cannot use the
proceeds.
Senator Webb. Well, I would respectfully submit that the
series of exchanges that we have had with China where they have
insisted on only bilateral solutions is perhaps the strongest
argument for us proceeding forward in this sort of way where we
can continue to encourage multilateral solutions.
Thank you, Mr. Chairman.
The Chairman. Well, thank you, Senator Webb. That last
point is a critical one. I am sorry Senator Corker is not still
here to hear you say it, but I think we should probably chat
with him about it.
But everyone, I think, has agreed--I mean, one of the
reasons we have our presence, where we do in the Pacific, is
because we are viewed by most nations out there as being the
indispensable nation. And clearly China would love to just use
its power to bilaterally leverage some other country. But if
the United States is at the table or if ASEAN is at the table
and there is a unity, there is a whole different equation the
Chinese have to take into account.
So the virtue of it, in fact, advantages the Chinese for us
to be out. And Secretary Clinton and others have told me
personally that they have been ribbed and kind of--what is the
word--you know, sort of made fun of in a jocular kind of way at
various meetings when these subjects come up because we are not
a member. And they sort of look at them and say, well, you are
not a member. You do not have any standing to bring this up. So
people need to weigh that as we go forward here.
Senator Risch.
Senator Risch. Thank you, Mr. Chairman.
Admiral Papp, you know, we sit here every day and it is not
very often our intelligence is insulted, but for you to come
here and tell us that we cannot resolve a border dispute with
Canada because we are not a member of this Law of the Sea
Treaty really does that. And I am sorry that you chose to go
down that route because I think those kinds of representations
really undermine the statements and the logical arguments made
by others who want to see this treaty authorized.
I was surprised, as all of you testified, that the South
China Sea was not mentioned until we got to Admiral Locklear. I
was going to go down the same route that Senator Corker did in
that regard, and I guess I will touch on it at least some.
I would say that most people in America do not realize what
a mess that the South China Sea is in, and the description that
we have had here today has been very antiseptic. I have met
with representatives of the governments, and it is not just the
Philippines. It is other governments that are having the same
kind of difficulties, and they are begging for help. Not one of
them asked that we subscribe to the Law of the Sea Treaty. They
wanted you guys to do something about it. They wanted me to
urge the President to have you do something about it, which I
am not inclined to do, by the way.
But Senator Corker made the point that this treaty was
negotiated 30 years ago this coming December 12. It was adopted
by the United Nations a couple of decades ago, and every one of
the players in the mess in the South China Sea is a subscriber
to this treaty. Yet, this treaty is just a piece of paper and
is just flowery speeches like we have had here today until the
gate opens and the rodeo starts. And the gate has opened and
the rodeo has started, and this thing has not helped one bit to
resolve the tension, the disputes, and the defugalties that are
going on in the South China Sea. They are shooting at each
other there. There have been munitions expended, and this thing
has not done one thing to help as Senator Corker has pointed
out.
Can any one of you point to me one thing that this treaty
has done on a specific basis, people, places, and timing? Tell
me one thing that this treaty has done to resolve the disputes
and the tensions that have taken place in the South China Sea.
And I do not want to talk about the future. I do not want to
talk about what a wonderful document it is. I want to know what
one country did to use the provisions of this treaty to help
itself in the mess that they are in the South China Sea. Who
wants to try that?
Admiral Winnefeld. We pointed out, Senator, already that
the treaty is not a magical document that is going to cure the
ills of the South China Sea. It is yet another tool. And I
think that the nations there will feel more empowered to use
whatever mechanisms are in or to insist that the mechanisms in
the Law of the Sea Convention be used if we are a party----
Senator Risch. But, Admiral, they have not.
Admiral Winnefeld [continuing]. If we apply our political
backing and our political power and our influence to do that.
And it might not work. And if that is the case, there are other
mechanisms.
Why should we leap right away to the use of force or
something along that order when we have the opportunity to
bring our influence to bear in the region? And the nations in
that region will be a lot more comfortable if we are bringing
our influence to bear with treaty law behind us than if we are
on the outside looking in with no credibility to be able to--
having not acceded to the treaty--to make statements about the
treaty.
Senator Risch. You know, I am not suggesting that you
should jump in with force. I am not suggesting that at all.
What I am suggesting is this has been an abject failure for the
members who have signed this and who have been members for
years and years and years. They are coming to us asking for
help.
Can anybody answer my question? Give me one example of a
tension or a difficulty that was resolved as a result of this
treaty by the members who operate in the South China Sea. Give
me one example. Can anybody do that?
[No response.]
Senator Risch. I will take that as an answer.
Thank you, Mr. Chairman. I am done.
The Chairman. Well, let me give you an answer because it is
important to know that the Philippines and Vietnam have both
specifically asked us to join the Law of the Sea in order to be
able to help them leverage a peaceful outcome to the disputes
of the South China Sea because they cannot do it on their own
because of China's power. And China, until we are in the Law of
the Sea, does not listen to us either because we are not party
to it.
So I will make sure those documents and those facts are
made available to the Senator.
But you know, China wants a different outcome. China does
not want to submit to the Law of the Sea right now, and it is
going to take a different equation within the Law of the Sea
for China to feel compelled to listen. But those nations are at
a huge disadvantage. And if you look at the map at what China
is claiming, it is clear why. So clearly, the Law of the Sea on
its own is not going to resolve it.
Senator Coons.
Senator Risch. Well----
The Chairman. Yes. Sorry. Go ahead.
Senator Risch. Well, Mr. Chairman, you know, with all due
respect, I do not understand that. You have these countries
that have signed this agreement that is supposed to resolve
these kinds of disputes. Whether we are in, or not in, should
not make any difference whatsoever. There are 160-some
countries that are in here. Supposedly this document is
supposed to do something to create a mechanism by which they
resolve this dispute, and it simply has not happened.
The Chairman. Senator, it does. It provides a forum with a
set of rules, but if a party to any dispute--this is true
anywhere in any country anytime. Here in the United States, if
you have got two parties, you know, whether it is a sports
figure negotiating with the franchise owner and they go to
arbitration ultimately because they cannot come to agreement
because one party does not want to agree. Or how about the
United States Senate where we had a super committee where we
could get no agreement, so we are going to have a sequester?
There is a great example. So, I mean, there are plenty of
examples where people cannot agree, and you need a structure to
be able to get it to agree.
Senator Risch. And it has not worked.
The Chairman. It has not worked with respect to the South
China Sea. But the question is, Would the presence of the
United States at the table, in conjunction with those other
nations, be a precursor and lay the predicate to other options
if you had to come to them? And the answer is according to, I
think most experts, they would say absolutely. If you are going
to go to war, you want to go to war with China over the South
China Sea, you better lay the predicate, and the predicate
better be that you have exhausted every opportunity peacefully
before you ask the American people to do that.
Senator Risch. I would certainly hope the United States
does not give any consideration in going to war with China over
the South China Sea. But this document was supposed to, long
ago, have resolved this amongst the players in the South China
Sea and not one person has been able to give me a specific
example as to one of these tensions or one of these disputes
that has been resolved.
The Chairman. With respect to the South China Sea, and I
think it is for very obvious reasons. But we will have plenty
of testimony that will show you the ways in which on an
everyday basis countless decisions are made which create rules
of the road--Admiral Papp has testified to that--which lay out
the rules of the road which have assisted and avoided conflict,
and there are dozens of examples where conflict is avoided or
various thorny issues have been resolved by virtue of people
being at the table.
You know, we have had arms control agreements between the
United States and the former Soviet Union and we did not always
have a resolution as a result of it. But ultimately we found a
forum or a mechanism to try to move forward.
I guess it is a fundamental belief about whether you think
it is better to have some structure within which you can work
these things through or you want to do it on an absolutely ad
hoc basis. But I do not think anything should diminish the
veracity and the impact of the evidence that says from our
commanders who are dealing with young officers and sailors and
forces in various ways on a daily basis who are put in harm's
way trying to do a board and search or trying to stop a drug
interdiction or whatever it is--they are advantaged, according
to the testimony of these commanders, by the presence of this
agreement. You may not agree, but these are the commanders who
are telling us on a daily basis that those advantages are
there.
With respect to the South China Sea, I would rather have
the United States be at that table, and I will bet you if we
are at the table within the confines of this, we can help
resolve some of those issues.
Senator Coons.
Senator Coons. Thank you, Chairman Kerry, for holding
another hearing on the Law of the Sea. And I am grateful to the
panel for their testimony to us today.
As I expressed at our previous hearing, I am concerned that
the debate over this treaty is locked in a framework that is
decades out of date. All major questions about this treaty have
been answered thoroughly, not once, but twice, by both
Democratic and Republican administrations, and we are now in
the process of thoroughly vetting them a third time.
In our last hearing, after listening to and asking
questions of General Dempsey, Secretary Panetta, and Secretary
Clinton, it was apparent to me that the real risk we face is
letting others draw boundaries, set rules, and advance their
economic interests without the United States having a seat at
the table, all the while putting our national security
interests at some risk by failing to ratify this treaty.
Based on what I have heard and read today and over the last
few weeks, as well as the 30 years of commentary before that,
there seem to be two schools of thought on this treaty's impact
on our national security.
First, there are those who argue--and I would put many of
today's witnesses in this camp--that the Law of the Sea is a
treaty that contains vital provisions about navigation that
would help our Armed Forces carry out their global mission. It
also, as we will hear, includes benefits for American business.
There are others who believe that the Law of the Sea
Convention is an agreement with only minimally important
provisions on navigation which has little impact on our Armed
Forces, and so we should focus our time on this International
Seabed Authority, and picking apart the functioning of a group
of international bookkeepers. I disagree. And in my view there
are real benefits to the United States in terms of navigational
rights I would like to focus on.
As many distinguished witnesses have testified to the
strategic value of this treaty, I would like to focus narrowly
on the question of sort of exactly how in the real world
freedom of navigation operations are carried out and what
potential benefit there might be as a result of accession to
this. And since 9 out of 15 of the nations with excessive
maritime claims in 2011 were challenged by our Armed Forces
through PACOM, in PACOM's area of responsibility, I am going to
focus my questions today on Admirals Greenert and Locklear with
my apologies to the other fine witnesses who have also joined
us today.
Now, Admiral Greenert, if I could start, just to reiterate
what was covered in the last hearing for the sake of a starting
point, is it correct that in navigational disputes, the United
States currently asserts customary international law as defined
by the Law of the Sea?
Admiral Greenert. That is correct.
Senator Coons. And so when another nation, whether ally or
competitor, claims customary international law does allow their
claim in excess to those allowed by the Law of the Sea, is it
correct the United States then performs a so-called freedom of
navigation operation to reassert the real customary
international law?
Admiral Greenert. Well, when accosted, our commanders are
directed to say we are operating in international waters. So in
effect, you could say, ``Yes.'' In situ, we do a freedom of
navigation operation. But in addition, we do regularly
scheduled freedom of navigation operations. Admiral Locklear
manages those in the Pacific. They are well documented,
transparent about the whole thing saying where we are going to
go and why we are going to do it.
Senator Coons. If the United States did not contest an
excessive claim through either routine or special freedom of
navigation operations, are we at some risk that that would set
a new precedent and that our competitors, allies, or others
would suggest somehow the United States agreed that customary
international law might allow their excessive claims?
Admiral Greenert. I believe that is so. We are looked at
very much as the ones that sort of set the standard not only in
the Pacific but in the Arabian Gulf, the north Arabian Sea. I
have seen it again and again. If we say that inland seas start
at 75 miles, in other words, if our behavior is that, then
others are going to assume we believe that, and that it is as
we attest to.
Senator Coons. And Admiral Locklear, if I might. In a
freedom of navigation operation, generally speaking--I am not
asking about tactics, techniques, or procedures, but just
generally speaking--is it correct that an aircraft or maritime
vessel is placed into the contested area in order to prove
customary international law is still in force and we are
demonstrating real customary international law is in force
because no one successfully intercepts, turns back, or fires on
that aircraft or vessel?
Admiral Locklear. That is correct.
Senator Coons. So it sounds to me like this is a process
that is not without cost and risk. Secretary Panetta said
clearly at the last hearing we never give up our right to self-
defense. And so when we insert men and women, aircraft, vessels
into these situations, I presume there is some risk associated
with that.
Admiral Locklear. That is correct.
Senator Coons. So when we have successfully reasserted
customary international law and leave a contested area, do
these other nations sometimes then reassert their excessive
claim?
Admiral Locklear. They do.
Senator Coons. And we then have to conduct another freedom
of navigation operation. This is a back and forth, routinely
contested thing that is just part of your mission week in, week
out, year in and year out.
Admiral Locklear. That is correct. We actually have a plan
that we recognize where the contested areas are, and then we
plan and get approval for freedom of navigation operations that
do the same thing, do what you just said. They show that we are
not abiding by that claim.
Senator Coons. And, Admiral Greenert, the annual report
that the Pentagon provides to Congress on freedom of navigation
shows the number of countries with excessive claims that the
United States Armed Forces have actively engaged in challenging
has actually tripled since 2006. The number of countries making
these excessive claims and the number of incidents that have
required a freedom of navigation operation have tripled since
2006. Would accession to the Convention eliminate the need
altogether for freedom of navigation exercises?
Admiral Greenert. I do not think it would eliminate
altogether the need for it. Periodically we would--in order to
establish what is codified in the Law of the Sea Convention, we
would continue that. It is right and proper. We believe in it.
But it would certainly reduce the need to, the requirement to
do that because we feel compelled to do that for reasons you
said. Our behavior helps our coalition allies and potential
allies to see what the standards are. We are the standard
bearer.
Senator Coons. So, Admiral, if I hear you right, would
access to the Convention provide an alternative, nonlethal,
less risky, less asset-consuming tool to assert navigation
rights for the United States?
Admiral Greenert. Yes, Senator, it would.
Senator Coons. And so my conclusion is that freedom of
navigation operations, which are provocative to nations, some
of which are our allies, some of which are our opponents, have
steadily increased in number, in seriousness, in cost and
complexity over recent years. And based on that testimony, it
seems to me, Mr. Chairman, in conclusion, that what you and
Senator Lugar have said for a long time is correct, that to
avoid setting new precedents in customary international law,
the United States has to continue to carry out increasingly
large numbers of freedom of navigation operations, each of
which is inherently life-threatening for our service members
and consumes our limited assets and is also provocative to the
nations whose claims we are contesting, whether hostile,
friendly, or allied. And the entire dangerous, risky, and
provocative process could be avoided in some circumstances by
ratifying this treaty and being able to contest excessive
claims in the ways it allows us to do. So this treaty makes a
real difference for the average men and women who serve us on
the high seas, in the air around the world, and in my view,
contributes meaningfully to the national security of the United
States.
Thank you for your testimony today.
The Chairman. Thank you very much, Senator Coons.
Appreciate it.
Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman. I appreciate the
opportunity to be here.
Let me, first of all, say all six of you--I know all about
you. You are great guys and you have served your country, and I
have the greatest respect for you. I do not envy you a bit.
You are put in a position--I know a little bit about chain
of command because I was in a very lowly position, but I was in
the United States Army. And my chain of command started with my
master sergeant and on up to the lieutenants and the rest of
them. Yours is the President of the United States. He is the
Commander in Chief. So you are going to naturally reflect
anything that comes from--you have to. You are military. And I
understand that. I have been there.
What I would like to do is suggest that maybe after your
retirement, you might change your mind. I am looking right now
at 24 stars--I just had a few stripes--24 stars, and that is
very, very impressive. And I have a letter here that is signed
by 33 stars, but these guys have already retired.
On this letter--and I want to ask that this be made a part
of the record--it says--I cannot read the whole letter. There
is not time. ``But we wish respectfully to challenge the
perception that military personnel uniformly support this
accord by expressing our strongly held belief that Law of the
Sea ratification would prove inimical both to the national
security interests and sovereignty of the United States.'' It
goes back and gives the history of this thing. And they have
very, very strong language. It is signed by nine of the top-
level people who are in retirement.
Now, I asked that it be a part of the record.
The Chairman. Without objection.
Senator Inhofe. And I also want to make as a part of the
record the Reserve Officers Association. This is a letter that
we have here. It is actually a resolution. At the very end of
the resolution, it says: ``In conclusion, the Reserve Officers
Association does not endorse ratification of the Law of the Sea
Treaty. It actively advocates against it. Historically the
United States has claimed that its right to territory was
manifest. To agree to the Law of the Sea Treaty acknowledges
that the United Nations has authority over the United States
maritime territorial claims. The Reserve Offices Association's
concern is that the Law of the Sea Treaty will become''--and it
goes on and on. So I ask also that this be made a part of the
record. These are all retired people, and I think that is
significant.
Senator Inhofe. Now, I am going to have to quickly go
through this. I assume that you all agree--and it can just be a
yes-or-no answer because there is not time for more than a yes-
or-no answer--that the not signing of this is not going to
compromise in any way our ability to use force or to navigate.
Is that true? Is that yes or no? Do you agree with that,
starting with you, General Jacoby?
General Jacoby. Yes, Senator, I agree with that.
Senator Inhofe. All right. Do you agree?
Admiral Papp. Yes, sir.
Admiral Winnefeld. At the moment, it will not but in the
future it could.
Senator Inhofe. OK.
Admiral Greenert. I agree.
Senator Inhofe. OK, you all agree.
At the last hearing, here is a guy who is your boss. He is
Chairman of the Joint Chiefs of Staff, General Dempsey. At the
last hearing, he was asked a question as to whether or not this
would have an effect. He said--whether failure to ratify the
Law of the Sea Treaty would compromise our ability to project
force around the world and his answer that the United States
would continue to assert our ability to navigate and our
ability to project force and it would not be deteriorated if we
do not ratify this treaty. So I will not ask you whether you
agree or disagree with your boss, but I agree with him.
When I talk to people in what I call the real world--that
is outside of Washington--in Oklahoma and I say what do you
think about a treaty that cedes our right and allows another
entity to tax the United States for the first time or to sue in
a court not in the United States, they find that this is a real
sovereignty issue. We have talked about sovereignty up here,
but we have not really gotten specific.
I do not think anyone is going to question the fact that
this does give the Seabed Authority the right, the privilege,
the authority to tax us. And it comes through royalties. Right
now, the royalties on the area of the Extended Continental
Shelf range between 12\1/2\ percent and 18\3/4\ percent. And
the reason that is a range is because the oil companies who
would drill--they would say anything in excess of that range we
would not be interested in doing. So we have to do it at that
range.
This authority, according to the U.S. Interagency Extended
Continental Shelf Task Force, talks about the resources out
there are worth billions, if not trillions. Now, if you just
merely take a trillion dollars and you apply this to it, at the
end of 12 years, it would get up to 7 percent of these
royalties that would otherwise go to the United States. Now,
that amount would be around $70 billion.
I will not ask you the question I asked the last panel
because I do not want to put you in that situation. But by
doing this and having the authority to tax us in that amount--
one of the questions I am going to ask at the end of this, does
anyone know of any time in the history of this country that we
have given, ceded our authority, taxing authority, to allow
someone else to tax us.
And the second thing would be on the--which I think Senator
Lee is going to--he certainly is in a much better position to
talk about the fact that they would be able to sue us.
I would only want to read something to make sure it is in
the record. When you talk about the people who are champing at
the bit waiting for us to become a party of this treaty so they
can sue the United States of America, one person that I would
quote so it gets into the record would be the international
tribunal--well, I do not have it right here.
But Andrew L. Strauss who--the forum was the Global Warming
Emissions. He said the article proposed various forums for
initiating lawsuits against the United States, including the
Law of the Sea Treaty's compulsory dispute resolution, which I
am sure that Senator Lee will be talking about, mechanisms. And
he said, as the United States has not adhered to the
Convention, however, a suit could not be brought unless we
adhered to the Convention.
In the book that was written ``Climate Change Damage and
International Law,'' law professor Roda Verheyen said--she
posed a comprehensive hypothetical case that could be brought
against the United States for its alleged responsibility in
melting glaciers, causing glacier outburst and floods.
The reason I am interested in this is we in the Senate and
the House have refused to adhere to this and pass something
that would put a limitation on anthropogenic gases and here we
would be ceding that authority to someone else.
And the last thing I want to mention, Mr. Chairman, if you
would allow me to do this--they keep talking about a seat at
the table. I think my good friend to my right, Senator DeMint,
is going to ask what table you are talking about because we
already have a table out there and it is called the
International Maritime Organization. They have had this since
World War II. It says accomplished by passing and adopting
implementing standards, maritime safety and security,
efficiency of navigation, and prevention or control of
pollution from ships, IMO is the source of approximately 60
legal instruments that guide the regulatory development of its
Member States and improve the area of the sea.
So those questions I would ask are you really do not think
that our sovereignty is impaired by ceding these authorities to
some international group for suing the United States or taxing
the United States. And then also, can you tell me of incidents
where the IMO has not answered these problems that we have been
talking about to your satisfaction?
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Inhofe. You put
a lot on the table. Do you want to respond, Admiral?
Admiral Winnefeld. There is an awful lot. First of all, it
is great to see you again, Senator. I always enjoy our
conversations.
There is an awful lot in that question.
Senator Inhofe. Up till now. [Laughter.]
Admiral Winnefeld. Even now, sir. Even now, with respect.
There is an awful lot in your question, and I think that we
would have to have, I think, a detailed one-on-one discussion
because I am not sure that I would, for example, agree that it
is a tax as opposed to a royalty.
I would also suggest--and again, I am not the economic
expert or the industry person who might testify to this. But I
think a lot of these guys are not investing in these areas
because they are worried that they do not have the underpinning
of treaty law to protect them. And so it is money that is not
there because they are not drawing the natural resources from
the Extended Continental Shelf that perhaps we as a nation
would like to see them draw.
Senator Inhofe. If we did, of course, we would be able to
get royalties in the range that I discussed, and of course, 7
percent would represent more than 50 percent of the royalties
we would otherwise be entitled to.
Admiral Winnefeld. Depending on the range.
Senator Inhofe. That is right.
Admiral Winnefeld. If we took 18 and three-quarters and
took 7 off of that, we would be down to certainly 11 and three-
quarters, which at the moment that money does not exist. I
mean, we could have a detailed discussion there.
Another example would be the Reserve Officers Association
letter, which I read for the first time this morning, which I
found--after I read it, I felt like these guys ought to go get
better advice because there are a number of statements in there
that I think are incorrect or misleading. For example, they
talk about territorial seas, that the 1958 Geneva Convention
established territorial seas. That is just not true.
It talks about, sort of cleverly, that that Convention
defined international straits, but what it did not do, but what
the Law of the Sea does, is to define what transit passage is
through those areas. That is not in the Geneva Convention and
it is in the Law of the Sea Convention.
Very importantly to me--and I would want to go into a
classified session to discuss this--is that the Law of the Sea
Convention defines a stateless vessel. That is incredibly
important to us in the counterterrorism world and the
counterproliferation world.
So there are some inaccuracies in that letter that I would
love to sit down and walk through, even though they are a great
bunch of guys who obviously mean the best for our country.
So, again, as I said, I always enjoy our conversations and
I look forward to the potential to have one on this very
important subject, sir.
The Chairman. Thank you very much, Admiral.
Yes, Admiral Papp.
Admiral Papp. And, Senator, I lead the U.S. delegation to
the International Maritime Organization. I went to my first
general Assembly this fall, and in every discussion, bilateral
and multilateral, every conversation starts off with the other
country questioning and wondering why the United States is not
asserting leadership by joining the Convention because every
negotiation that is done, whether it has to do with piracy,
whether it has to do with marine casualty, overseas, everything
is formed on the basis of the treaty, and with us being an
outsider, oftentimes just because of who we are, because of the
United States, we can influence it and we can still get things
done, but it makes it more difficult for us to get these things
done.
We are looking at this and how are we are going to operate
in the future, what tools are we going to have to use in the
future. And customary international law, countries'
influences--they ebb and flow. They rise, they fall. This is
something that assures because it is the basic underpinning of
all these treaties, all these agreements that we come to at
IMO.
Senator Inhofe. My question was where has this not worked
in the past. It has been working since World War II.
Admiral Papp. Well, I can give you one right now, sir, and
it is dealing with the Arctic. I personally requested a meeting
with all the other Arctic representatives there so that we can
continue our negotiations in terms of coming up with the
details of the search and rescue agreements for the Arctic, for
pollution response in the Arctic----
Senator Inhofe. They did not meet with you? Is this what
you are asserting here?
Admiral Papp. They did meet with me, sir, because we are
the United States. We still have influence.
Senator Inhofe. Exactly.
Admiral Papp. But will that influence continue forever?
The shifting politics, shifting strengths of countries.
What I can tell you is that each and every one of those
countries looks to the United States for leadership and setting
an example under the rule of law and being in a leadership
position. And we are not quite in that leadership position
given the current stance that we have.
Senator Inhofe. Do you think in the future if we do give
this opportunity for them to take funds, royalties or
otherwise, which I would have to say, Admiral, that is a tax
because that is money, to be redistributed by some organization
that we do not even have a voice in--do you think that is in
our best national security interest?
Admiral Papp. Well, sir, I think it is all speculative at
this point because nobody is willing to drill on the Extended
Continental Shelf because they do not have the legal assurances
that are given by the Convention. And if we are a member of the
Convention, we do have a seat at the table. Somebody asked what
table do we have a seat at. The International Seabed Authority
where we would have the one permanent seat and veto power.
Senator Inhofe. The same veto power that other countries
like Sudan might have. We have veto power. First of all, you
are talking about two entities. One is an advisory and the
other is making a decision. And you are saying that we have a
different veto power than the other countries have?
Admiral Winnefeld. If any country has the veto power, then
that would nullify the ability to distribute any of those
funds.
Senator Inhofe. That is right.
Admiral Winnefeld. So the deal would be that if the group
does not come up with what seems to be a fair and equitable
distribution of those funds, then we would veto it.
Senator Inhofe. On distributing the funds, yes. But the
funds would already be there. The tax, the royalty would
already be in effect. They would have the control over those
funds that came from our efforts that otherwise would be coming
to the United States. So that does not affect that. They would
have that authority. It is just that you are saying that we
could direct which countries they go to, but they would not be
coming to ours.
Admiral Winnefeld. Some of them could be coming to ours,
but you are correct. Whatever the----
Senator Inhofe. For the record, I want you to send me a
scenario by which any of that would come to the United States.
The Chairman. Well, I am going to intervene here just for a
second.
Senator Inhofe. Yes. You are the chairman.
The Chairman. Well, no, no, but I have given you well more
than double the amount of time of any other Senator because I
really want any opponent to be able to have an opportunity to
grill people.
Senator Inhofe. And I appreciate it.
The Chairman. I think that is really important, and I want
to get all these issues out on the table.
But I do think it is important, as we do that, that we try
to establish what is fact and what is not. There is no power
and no right of taxation in this document. And we will have an
understanding and a declaration that makes it clear in the
resolution of ratification that the United States of America
will never accede to any other country's tax, that there is no
tax in here, and it will be properly defined.
Senator Inhofe. Mr. Chairman, we are saying that they will
have a percentage of the royalties that we would otherwise----
The Chairman. A royalty. A royalty is not a tax.
Senator Inhofe. Is not a tax?
The Chairman. That is correct. A royalty is a bargain. It
is an agreement. A royalty is not a tax. No government
authority has issued a tax in any kind of way that constitutes
taxation. It is a royalty where the companies who are at the
table during the negotiation--Ronald Reagan set that in place.
And in fact, we will have testimony from John Negroponte and
others who have been part of these negotiations over a long
period of time as to exactly what was agreed on and how. There
is a royalty scheme.
Why is there a royalty scheme? Because three-quarters of
the planet Earth is ocean. Three-quarters of the planet. And a
whole bunch of countries are landlocked. And if the ones with
the border on the ocean have the right to extend their shelf
way out into the ocean, you could have very few nations
claiming all the resources of the Earth to the exclusion of
everybody else. So what was agreed on is really quite minimal.
It is far less than the oil companies pay to drill off the
coast of Louisiana. Far less. And it is scaled according to how
much mining and how much resources you take out of the ocean.
Now, Lockheed Martin and a whole bunch of other companies
decided, wow, you know what?--97 percent of something is a heck
of a lot better than 0 percent of nothing. And they want 97
percent. They want their 93 percent. And so they have agreed
there will be a scale of some amount that will go to the
landlocked nations in compensation for the rights of other
countries to exploit the seabed of the Earth.
We have over a million acres of land out there that we can
claim for America, more than any other nation on the face of
the planet because we have Guam, because of the Marianas,
because of Hawaii, because of the Aleutians and so forth. We
have the most extensive--and I will bring a map in of it one
day. It is extraordinary. To sit here and think that we are not
going to take advantage of that and stake our claim and have
our claims legitimate so our companies can go out would be just
astonishing. The companies want this. They are ready to pay the
royalty because they want the profits that come from the other
93 percent.
Senator Inhofe. They establish the royalties. I just have
to say--and I am afraid you will cut me off before I respond to
your statement----
The Chairman. No, I will not. I have never cut you off,
Senator.
Senator Inhofe [continuing]. About a tax. Money that would
be coming to the United States, that by virtue of this treaty,
would not come to the United States--I call that a tax. Most
people outside of Washington would call that a tax.
The Chairman. Well, Senator, you are entitled to--we will,
as I said, make it crystal clear in the ratification document.
And I think the companies will be quite upset that you are
protecting them from earning the profit that they would like to
earn. It is sort of remarkable to me, but so be it.
I also think it is important here to deal with facts.
General Dempsey, indeed, said we would not reduce our force.
Senator Inhofe. Force power.
The Chairman. Force power. Of course, the United States of
America is not going to reduce its force power. But every one
of these gentlemen at this table, who have the responsibility
of sending people into combat conceivably at some point in
time, have said they would rather have a tool at their disposal
to try to resolve things peacefully first. And what General
Dempsey said, if you quote him completely, which you did not
do--he went on to say that the failure to ratify puts ourselves
at risk of confrontation with others who are interpreting
customary international law to their benefit. So the risk of
confrontation goes up. So our force capacity will not go down,
but the risk of having it used in a confrontation you do not
want goes up. And that is what every one of these leaders have
said is not advisable.
Senator Inhofe. No, I understand and we talked about that.
So you would agree then that not going into this treaty would
not in any way compromise our ability to project force or to
navigate. You would agree with that.
The Chairman. Not necessarily navigate but project force I
would agree. We will project force, but it is not necessarily
going to affect those rights. If you want to have the
confrontation without having a tool to resolve it properly,
that is a choice every Senator will face when we get to it.
But I have taken up Senators' time, but I just want to
also--
I think it is important--and Admiral, maybe you want to comment
on this. The Reserve Officers' letter--and I respect them
completely and they are entitled and we will welcome those
kinds of comments here. But once again, we have to deal with
facts.
A lot of people are working off of the 1982 treaty, and for
them and for some people, things have not moved since then. But
the negotiation has and the status of the treaty has changed
since then. And so we are dealing with a very different set of
facts here. And, Admiral Winnefeld, I think you would agree
that there is an assertion that has been made here that every
provision of the Convention is already codified in previous
treaties to which we are a party, and I think that is a
misunderstanding. It reflects a confusion about what was in
customary law as opposed to the older treaties.
For example, the 1958 Convention, Senator, did not specify
any limit on the territorial sea, and some countries were
taking advantage of that loophole to extend their territorial
seas. Article 3 of the 1982 Convention explicitly set a 12-mile
limit according to U.S. policy. The 1958 Convention did not
include a codification of the right of transit passage through
straits used for international navigation that had developed in
customary international law. And there are other examples of
that.
So I would just very quickly ask you, Admiral Winnefeld, is
that correct.
Senator DeMint. Mr. Chairman, I do not mean to be rude and
do not want to interrupt, but we have a vote at 12:30.
The Chairman. Fair enough.
Senator DeMint. A number have been waiting a long time----
The Chairman. Let us come back to this. We will come back
to this at the appropriate time. We are certainly going to
leave the record open, and we are going to building a longer
record anyway. So we will draw this out so people understand
the distinction between the 1982 and where we are now, what is
in customary and what the relationship is to the treaty.
Senator Udall, thanks so much for your patience.
Senator Udall. Thank you, Senator Kerry. And let me just
thank you again for approaching this treaty in a very, very
thorough way and having these fine servicemembers before us
that are giving us their personal opinions.
I think there was some suggestion here that your opinions--
I know Senator Kerry asked you at the beginning, are you here
giving us the best of your experience and the best of your
personal opinions, and I think everyone said yes. And so I
think we should put to rest this issue of the idea that the
Commander in Chief has ordered you to testify in a certain way.
Is that the case, that these are your personal opinions here
and based on your experience? Yes? I see everybody nodding.
Admiral Greenert. That is correct.
Admiral Winnefeld. That is correct, Senator.
Senator Udall. Let the record reflect. OK. Thank you.
There was also a suggestion that on the letter with the
retired officers--and you all are active military--that somehow
there is a split. Do you any of you all have a sense? I mean, I
know Senator Warner was here earlier. He was a captain in the
Marines. He is in support. Do you any of you have a sense of
how it comes down in terms of retired military versus active
military on this or the various associations or anything? And
if you do not know it off the top of your head, you can get us
the information. But please.
Admiral Greenert. All of the colleagues that I have spoken
to--Chiefs of Naval Operations--the conversation centered
around maritime security. That is what I am conveyed to take
care of. And there has not been a split. And those retired who
were not Chiefs of Naval Operations--the issue has been
consistent in that the elements in the Law of the Sea
Convention that enhance maritime security, which the entire
Convention that I see does, there has not been a split. There
have been some who are retired that I have spoken to who said,
well, I am not so sure, and it involved a lot of the details of
the economics and the ability to control. That has been my
experience, Senator.
Senator Udall. Do any of you--would any of the others like
to comment on that?
Admiral Winnefeld. I am aware of a 2007 letter written by
the Military Officers Association that is supportive of the
treaty. So that is why I was sort of surprised to see this
morning the other letter which again had some inaccuracies. But
I give them credit for the courage and the strength of their
convictions, but I think they just had some things inaccurately
stated.
Senator Udall. The Navy and the Coast Guard's ability to
conduct maritime interdiction is an important tool to stop drug
trafficking and conduct counterproliferation operations. And
while some have asserted that the Law of the Sea Treaty puts
shackles on our maritime forces, I agree with the assessment of
the Navy JAG that article 110 pertaining to the right of visit
actually strengthens our ability to conduct maritime
interdictions.
Can you go into details about how our Armed Forces will be
enabled to conduct their mission by article 110 and why it is
important that the Navy and the Coast Guard have the backing of
an international treaty to conduct operations they can already
conduct via force if needed?
Admiral Papp. Well, sir, being in the service that is
involved in maritime interdictions on almost a daily basis, I
can tell you that prior to the Convention, we tried to work out
bilateral or multilateral agreements with other countries that
enable us to operate close to their waters, sometimes even in
their territorial seas because we are able to come to these
agreements, whether we use ship riders or other things. It
helps us to interdict drugs, migrants, and perhaps other things
far offshore in the transit zone, sometimes in the departure
zone.
Prior to the Convention and the 1994 revision, we had about
a dozen countries that we were able to get into agreements
with. After the 1994 Convention, which had language in there
talking about cooperation between countries particularly as it
relates to interdicting drugs and because we comply with the
Convention, even though we have not acceded to it, we have
built that up to about 45 countries that we have agreements
with around the world.
However, administrations change. Other people are elected
in. These constructs that we have come to are on a foundation
of shifting sand, and we cannot always rely upon each country
to live up to its agreement because things will change. We have
some countries that have excessive territorial sea claims that
we have to respect.
But having the assurance of the underpinning of a solid
foundation of the Convention would help us in negotiating those
things into the future and give us greater predictability.
Senator Udall. Thank you very much.
Admiral Greenert. The elements that describe freedom of
navigation, for example, Exclusive Economic Zones, territorial
seas, and all that, transit passage, archipelagic passage--that
all enhances our ability to conduct maritime intercept
operations because it clarifies where we can operate.
But also what section 110 does is it provides clarity on
unauthorized broadcasting, drug trafficking, piracy, and
unflagged nations as the Vice Chairman mentioned earlier. But
it also says that powers confirmed by other treaties, in other
words, United Nations resolutions and all that, that is very
clearly laid out and gives us those mandates that enhance our
ability to, especially in a coalition operations, bring it all
together to do maritime intercept.
Senator Udall. Any of the other panelists have a comment on
that?
[No response.]
Senator Udall. Thank you very much for your answers and
thank you for your service.
The Chairman. Thanks so much, Senator Udall.
And, Senator DeMint, thanks for your patience. Appreciate
it.
Senator DeMint. Thank you, Mr. Chairman.
And I want to thank all of the folks here today. You and
the men and women who serve with you make us proud to be
Americans.
And I appreciate your being here to advocate for the
treaty. I mean, there are 10 pages in this treaty dealing with
navigation that would have a lot of theoretical benefits to our
military, to particularly our Navy. I do not refute that at
all, although some of the things I have heard today would make
me even concerned about that part of it.
As has been pointed out, where it has really been tested in
the South China Sea with China violating the rules, with
numerous countries affected, there has been no enforcement
based on the treaty, and numerous countries that are part of
this treaty.
And the implication I have heard from some of you today
maybe worries me more than anything else, is that by joining,
we, in effect, become the enforcers of this around the world.
And I know that is not what you said, but that we add our
weight. But I am afraid that these other countries are part of
this treaty. It is not being enforced, and if we become part of
it--they want us to become part of it for numerous reasons, but
one is to help enforce it. That worries me.
But I would like to take just a second to explain why I
oppose the treaty as a whole, not necessarily the pages you are
talking about, and instead of ask a question, yield to Senator
Lee because I know he has studied this a lot and I would like
to give him a chance to ask questions before we run out of
time.
But you have explained that the up side of this treaty is
that it might give you an additional tool to deal with issues
out in the future. And I respect that. But the down-side risks
for us seem much greater than that potential benefit that we
might have that is clearly theoretical, not working now. The
hope is if we get involved, our weight might make it work. But
the 300 pages is primarily a document, I would say, at least in
large part with environmental issues, and that may affect us
much more than any navigation part of this.
In fact, all the research I have done--there is not a table
in Jamaica where the naval powers around the world, except for
us, are meeting at a table making decisions about navigation.
That is not happening. That is not what they are dealing with
now. Perhaps our joining the Convention could change that, but
that is not what the Convention is doing now.
But the language in this treaty that worries us is
particularly that that deals with environmental issues and the
ability of this Convention to enforce that with signatories of
the treaty. And it is clear that the United States is the
largest economic power. We are the largest producer, the
largest consumer. We also have the largest military in the
world. And if you put all that together, we are by far the
largest emitters of carbon, and that is an issue around the
world.
This is not a theoretical issue. Europe is already going to
charge us taxes for our commercial planes to land there because
of emissions. And it is clear from this that the United States
is going to be subject to complaints and suits from all over
the world dealing with climate change, issues like cap and
trade. There will be suits for us to pay for pollution credits
where we sail our ships and where we fly our military aircraft.
And the arbitration or the dispute resolution part of this is
out of our control. We appoint two. The complainant appoints
two, and the United Nations Secretary General will be the
deciding vote.
And so while a lot of us who are against this treaty are
mocked, in effect, for not having the good sense to understand
what is in it, I am afraid that you are looking at a section of
this that might benefit our military long-term, but the other
issues that are in the other 300 pages are very serious and
subject the United States to a high cost. We will pay more for
being in this Convention, just like we do the United Nations,
than any other nation. The royalties that come from it will
largely come from us. That is why other countries want in it.
We will probably be paying for pollution credits very quickly,
and we will pay for countless lawsuits that are going come
against us that are not theoretical but I think very real.
So we have concerns not necessarily disagreements of what
you are talking about. And again, I appreciate your advocacy of
trying to bring us and the rest of the world into the rule of
law. This treaty is not doing it now. I do not think it is
going to do it when we join it.
But I will yield to Senator Lee.
Senator Lee. Am I recognized?
The Chairman. Yes, absolutely.
Senator Lee. Thank you.
Thank you all for being with us today. It is an impressive
site to have 24 stars here in front of us with only six
officials, and I am honored by your service to our country.
I too have some concerns with this proposed treaty,
concerns that relate ultimately to sovereignty concerns. The
discussion we had a few minutes ago regarding the difference
between a tax and a royalty is, I think, a legitimate one.
There is a legitimate point to be made there.
My concerns would not, however, be resolved merely if we
could conclude that what we are talking about under article 82
is a royalty rather than a tax. The reason that developers will
pay a royalty to the United States Government in the American
submerged lands offshore has to do with the fact that there is
a recognition there of a sovereign interest vested in the
United States of America. That is why the royalty gets paid
when it is on Federal lands, whether it is onshore or offshore.
The idea of paying a royalty to any international body tends to
imbue that international body with a degree of sovereignty.
That by itself raises significant concerns in my mind.
Now, of course, the primary reason why the six of you are
before this committee today is to talk about our maritime
interests, our navigational rights as a country. And I
understand that. But I do have to ask the question. I am happy
to ask it to any or all of you who are willing to answer this
question. Why is it necessary? Let us assume for purposes of
this discussion that you may be right, that it could be a good
thing to protect our navigational, our maritime rights through
some kind of a treaty. Why is it necessary to join that
together with a separate part of the same treaty that also
deals with exploitation of the seabed extending beyond our
Outer Continental Shelf?
General Jacoby, you are closest to me. Why do you not take
a stab at that?
General Jacoby. I would be happy to, Senator.
In my area of operations, my concern about the Law of the
Sea Treaty, my support is generated by the opening of the
Arctic. It is one of those things where you have got to be in
favor of what is going to happen. For whatever reason, human
activity is increasing at a fast pace. Since 2008, double the
number of vessels heading through the Bering Strait. This
summer right now Shell Oil is bringing two platforms to work in
the Beaufort Sea. And this is increasing. Economic activity
inevitably is followed with security and perhaps later safety
and defense concerns. And so we have to pace that and make sure
that we stay ahead of that.
Senator Lee. Would that necessarily include then--I mean,
to the extent that there are some benefits of joining those two
things, is there any reason why it would have to include a
royalty paid to an international sovereign body, which I assume
you would agree, by the way, this would be unprecedented? I
mean, it is really the first time we would, as a country, be
vesting an international body with real incidents of sovereign
authority.
General Jacoby. Senator, I am going to stick with the
operational aspects of that, if I may. This increasing
competitiveness that is generated by increased human activity
and economic activity really opens up a whole new world of
friction points. So for an operational commander, it is where
are you going to pick your fights and what tools are in your
tool bag. Harsh environment, few assets, little infrastructure,
economic activity outpacing that ability.
So having this framework, this starting point with all the
other Arctic nations but not just the nations, in my case the
chiefs of defense, the chiefs of security, the folks
responsible for safety, that allows us to build shared
situational awareness, common interests, common framework so
that we are going to avoid--my job--avoid these frictions the
best that I can as this pace of activity----
Senator Lee. So is the common framework that you are
referring to--would that be established by the International
Seabed Authority? Is that the table, the metaphorical table
that we keep talking about?
General Jacoby. I am going to stick with just the
operational aspects of it. I think the seabed questions and the
Continental Shelf questions, of course, are the things that are
the uncertainty that is accompanying increased economic
activity. The Law of the Sea does allow us a starting point of
certainty in our discussions and in our coordination and
cooperation as we try to resolve what is really an opportunity
to have a boon in an activity in the Arctic. And so for me it
is just allowing us to get ahead of this. It is about the
future, and it is about how can we contribute to the peaceful
opening of the Arctic, reduce potential friction points, and
this is a good, solid framework which all the Arctic countries
and the chiefs of defense start with when we begin those
discussions.
Senator Lee. OK.
Admiral Papp, I heard you mention a few minutes ago that we
have had some difficulty negotiating with Canada on an issue
that you described. You said that Canada was standing on what
you regarded as, I think, weak footing or words to that effect.
You also indicated that although it was on a weak footing, the
objections that Canada was raising were based on the fact that
the United States has not yet ratified this treaty. Do you want
to explain to us why that is the case and why ratification of
the treaty would necessarily resolve that?
Admiral Papp. Yes, sir. And getting back to Senator Risch's
comment, if I insulted anybody's intelligence, we will be happy
to have staffs come up and brief specifics of the cases that I
cited.
The one that I will give you is because I have been
personally involved as the Atlantic Area Commander, my previous
job. Part of the Coast Guard's responsibility is the permitting
process. We are a law enforcement and regulatory agency. So
when people for commerce purposes seek to build oil facilities,
gas facilities, et cetera, New England has a need for more LNG
facilities--there was a proposal to put one up in northern
Maine. Canada objected because of--and claiming that it was
internal waters and that they would have control over the
weather. There were transits through that area.
There is also a dispute as to our border between western
Canada and the eastern edge of Alaska.
More importantly and more significantly, a large issue is
the Northwest Passage, whether that is internal waters to
Canada or whether it is archipelagic where there should be a
transit----
Senator Lee. Are these all issues that--and I apologize for
interrupting, but we have got very little time here before we
have got to go to vote. Are these all issues that are not
adequately addressed by customary international law that would
be resolved by the treaty, were it ratified?
Admiral Papp. If we were operating only under customary
international law, perhaps. But Canada is a signatory to the
Convention. They fall back on the fact that they are a
signatory to the Convention and we are not. So we are not a
party and do not have any standing to dispute their claims.
Senator Lee. And so they would regard that aspect of
customary international law as nonbinding to them and they are
excused now from that aspect of customary international law?
Admiral Papp. Well, sir, as I said earlier, in regards to
the collision regulations, collision avoidance regulations,
when we operated under customary international law, customary
international law is in the eyes of the beholder. Everybody has
slightly different variations of customary international law.
Senator Lee. And that was an example, was it not, of how
countries were able to come together and establish
international regulatory standards without vesting sovereign
authority in an international body?
Admiral Papp. I would say that is correct, yes, sir.
Senator Lee. And also one in which we were able to
establish those international standards, those international
norms, which have helped facilitate maritime traffic without
subjecting the United States to lawsuits to be decided by a
tribunal that would be weighted in many instances by what would
likely be the tie-breaking arbitrator being chosen by the
Secretary General of the United States.
Admiral Papp. I cannot really comment on that, sir, and I
would be delighted to bring my lawyers up to discuss that. I am
looking at it from an operational commander's point of view
where I like to have all the tools possible in order to
negotiate agreements on the broad range of things that Coast
Guard does in terms of assuring safe, secure, and
environmentally sound commerce into our country, out of our
country, through our waters, and concluding agreements in the
Arctic which we are constrained because we are not a party to
the Convention.
Senator Lee. OK. Thank you all very much for your
testimony.
Just in closing, to wrap up, I just want to comment that I
respect your judgment greatly, and if there is a need to codify
certain aspects of currently existing, extant, customary
international law, either in a treaty or in the U.S. Code or in
some combination of the two, I am more than open to discussing
that idea. I have, nonetheless, grave concerns, concerns that
have not been resolved in any hearing to this point or in any
reading of the treaty that I have undertaken so far that what
we are doing is not just that, but we are going far beyond that
and creating an international body that would be imbued with
many of the incidents of sovereignty and doing so in a way that
is completely unprecedented in U.S. history.
Thank you very much.
The Chairman. Senator Lee, I appreciate your questions and
those of Senator DeMint. Obviously, part of what we would love
to try to do here is be able to address your concerns and your
fears about this.
There really are some significant mistaken interpretations,
and I do mean mistaken. For instance, Senator DeMint and I will
sit down and talk about this one on one, but there is no
ability to have an environmental lawsuit that would have any
standing--I mean, somebody can bring a suit that they want
tried, but it is not going to go anywhere. It cannot go
anywhere because the specific language of the treaty says that
no one is accountable to any environmental standard that you
have not signed up for internationally. The United States of
America has not signed up to any international environmental
agreement. So literally--and I know the Senator is a good
lawyer and he understands standing--there would be zero
standing under the direct, overt language of this treaty. There
is no ability to bring an environmental suit against us. No. 1.
No. 2, with respect to this concern about the Seabed
Authority, the United States of America is the only country
that has a permanent seat on it. Kudos to Ronald Reagan and the
folks who negotiated this. And we will hear from some of the
negotiators this afternoon. The others are rotating on a 4-year
basis. So Sudan may be there today. Who knows where they will
be in the future? But the bottom line is that Sudan is on a lot
of bodies that we currently work with, and it has not impeded
our ability to assert our values or our interests.
Moreover, if we do not accede to this treaty, our major
mining companies and other exploitative, undersea entities,
gas, oil, et cetera, whatever, will not drill, will not
exploit. In fact, it is very interesting. Lockheed Martin has
asked the British Government and joined into a British
consortium in order to be able to access someplace because the
United States of America will not stand up for it and represent
it through this process to legalize its claims. So here we are
sending our companies to other countries to have them stand up
for their interests. Lockheed Martin will not drill and put
millions of dollars into an undersea exploitation unless they
know they have legality to their claim.
That is for the Extended Shelf. The Extended Shelf we have
available to us here is bigger than any other country in the
world. Now, are we going to sit here and say it is smart for
the United States not to help our companies have legal
assurance so they can go out there and exploit those resources?
There is going to be a competition for resources. I mean,
look at what China is doing now in Africa. Look at what they
are doing in Afghanistan. We are fighting and putting people on
the line, and they are there trying to exploit copper. I mean,
we got to start thinking about our long-term economic strategic
interests here, and if we do not sign up, we have a chance
other countries can take us to the cleaners and you will see
this in the classified briefing, the degree to which other
countries are staking claims and we are just sitting here.
Now, we have a permanent seat. We have a veto to boot.
Nothing can happen through the Seabed Authority that we do not
agree to. So no money is going to be sent to some--I have heard
people say we are going to send money to dictators through
this. No; we are not. It cannot happen because we, if we are on
it, can prevent it. If you want it to happen, it can happen
through all the exploitation that is going to take place
without us on it, and then they may decide to go do those
things. So, in fact, there is a reverse argument. There is a
much greater interest for us to be here to protect against
those kinds of distributions.
The final thing I would just call to the attention of the
Senator, article 82, which sets up this entity and the
distribution. You know, for the first 5 years of production at
a site, you do not pay any royalty at all. Nothing. And then
for the 6th year, you pay about 1 percent of the value of
production at the site. One percent of the total value of
production at the site. That rate increases by 1 percent for
each subsequent year until the 12th year. Only at the 12th year
do you get to a 7-percent. If we are lucky enough to hit mining
or oil, gas where that lasts for the 12 years, you may get 7
percent, much less than we pay on any of those oil rigs down in
the gulf.
And finally, if you are a net importer of the minerals that
you are producing out there, you do not pay anything at all.
Zero royalty. If you are the importer because you are using it,
this negotiation had the judgment to say that is your use that
is your deal. It is if you are exporting it and selling it,
then you have to pay the party.
And finally, the payments are not made to the Seabed
Authority. They are distinctly isolated and they go through the
Seabed Authority. And that language is very specific, and it is
only in an agreement by the parties at the table as to how they
would be distributed to where. We are not at that table. So
whatever is exploited in the world now is going to be
distributed without the input of the United States. We are far
better off sitting there and influencing that distribution and
vetoing it if it is against our interests than we are watching
it go by.
So I think we ought to have this conversation.
Senator Lee. If I could just respond very briefly to a
couple of those points.
The Chairman. Yes, please, absolutely.
Senator Lee. First of all, I appreciate your insight, Mr.
Chairman. This is an issue that you have lived with and worked
with for many years, and I do appreciate your insights. I would
observe, however, a couple of points.
First, the International Seabed Authority is governed----
The Chairman. Well, let me just ask how much time we have
on the vote. I am not trying to cut you off. We have 5 minutes.
We have time. We have time.
Senator Lee. In that case, I will try to finish up in 1
minute.
The International Seabed Authority is governed ultimately
by the Assembly. The Assembly is that 160-plus member entity
which is the supreme organ, the supreme lawmaking body, of the
Authority.
The chairman is absolutely right to point out that the
Council, this smaller body on which the United States does have
a seat and has what can, I think, fairly be described in some
limited context as veto authority because in some areas it
requires consensus. The Council does have the authority to
propose the rules and regulations governing the article 82
distribution, but ultimately the distribution itself, the
determination of how those rules are implemented and the
allocation itself is made by the Assembly and not by the
Council.
As to the lawsuit, I understand your point about a lawsuit,
but let us take into account the fact that let us suppose we,
the United States, get hauled into an arbitration pursuant to
Annex 8 and we find ourselves, having chosen two of our
arbitrators, our opponent having chosen two, and the fifth
having been chosen by the Secretary General of the United
Nations. You could easily count to three among the arbitrators
who might interpret the laws to which we have acceded, the
environmental provisions to which we have agreed to be bound,
differently that a U.S. court might, differently that you and I
might, and that does present us with some risk.
The Chairman. Actually it does not, Senator, for this
reason. If we were to agree to an international agreement with
respect to the environment and we agreed to a dispute
resolution process within that treaty, that treaty would govern
and you could specifically, in fact, preclude--and I am
confident we would--in the negotiation any jurisdiction of Law
of the Sea over that particular issue. So in fact, we would be
well protected if we were to get there.
I wish this really were a threat that the United States was
about to enter into an agreement on international climate
change, but I think it is a long way away given where we are.
But I am willing, certainly, to provide for that. And we could
do something in the resolution of ratification that addresses
that concern, and I am perfectly happy to work with the Senator
to do that.
Senator Lee. Thank you.
The Chairman. Thank you very much.
Gentlemen, I think everybody here has said it. We are
enormously grateful to you for not just being here today but
for your service, for your careers, for what you represent, and
really it is, I think, important to have had these 24 stars
here. We are grateful for your testimony and most importantly
for what you do every single day. We thank you on behalf of the
country. Thanks for being here today.
And again, Happy Birthday to the United States Army. Thank
you.
We stand adjourned.
[Whereupon, at 12:45 p.m., the hearing was adjourned.]
----------

Letters and additional Material Submitted for the Record

Responses of ADM Jonathan W. Greenert to Questions Submitted
by Senator John F. Kerry

Question. If we had a larger Navy would you still be a proponent of
the Convention? Why?

Answer. Yes. The Convention supports the legal basis for global
access and mobility of U.S. military forces. However, this access is
not a substitute for a capable fleet that can prevent wars and prevail
in war when prevention fails. We need both a robust fleet and the
benefits of the Convention to ensure our national economic and security
interests are met in the maritime domain.

Question. How would being a party to the Convention further U.S.
national security?

Answer. It is by joining the Convention that we can best secure our
navigational freedoms and global access for military and commercial
ships, aircraft, and undersea fiber optic cables. As it currently
stands, we are forced to assert our rights to freedom of navigation
through customary international law, which can change, to our
detriment. Treaty law remains the firmest legal foundation upon which
to base our global presence, on, above, and below the seas.
Additionally, our new defense strategy emphasizes the strategically
vital area extending from the Western Pacific and East Asia into the
Indian Ocean region and South Asia. Several countries in the region
border on and use critically important trade and supply routes.
Further, some have proposed restrictions on access for military vessels
in the Indian Ocean, Persian Gulf, and the South China Sea. The United
States has continually expressed that it is in our vital interest to
preserve the freedom of the seas and our respect for international law,
freedom of navigation, and peaceful resolution of disputes. We continue
to demonstrate our commitment to those interests by our continuing
presence and engagement in these critical maritime regions. By not
acceding to the Convention, we forgo the best and strongest legal
footing for our actions.
U.S. accession to the Convention would help strengthen worldwide
transit passage rights under international law and help to further
isolate Iran as one of the few remaining nonparties to the Convention.
For our friends and adversaries alike, it is difficult to understand
how we argue that other nations must abide by international rules when
we have not joined the treaty that codifies those rules.

Question. How would being a party to the Convention help U.S. naval
forces in their efforts to resist attempts to impose illegitimate
restrictions on freedom of navigation by other countries? Would you
provide examples of such restrictions?

Answer. The Convention provides a formal and consistent framework
for peaceful resolution of maritime disputes. It defines the extent of
control that countries can legally assert at sea and prescribes
procedures to peacefully resolve differences. When we confront another
country over their illegitimate restrictions it would be beneficial to
be able to point to a legally binding document as our reference rather
than the nebulous concept of customary international law. Joining the
Convention is an important element in preventing disagreements from
escalating into confrontations or conflicts.
Recent interference with our operations in the western Pacific and
Indian Ocean, as well as rhetoric by Iran about closing the Strait of
Hormuz, underscore the need to be able to use the Convention to
identify and respond to violations of international law that might
attempt to constrain our access.

Question. It has been suggested that by acceding to the treaty we
are turning the keys of our Navy over to an international organization.
Would joining the treaty cause us to turn over any authority to an
international organization regarding our rules of engagement or give
any international organization control or veto power over our military
operations?

Answer. No. Becoming a party to the treaty would not cause the
United States to turn over any authority to an international
organization regarding our rules of engagement nor would we be
relinquishing any control or power over our military operations.
______

Responses of ADM Robert J. Papp, Jr. to Questions Submitted
by Senator John F. Kerry

Question. If you had more ships in the Coast Guard, would you still
support ratification of the Convention?

Answer. Yes. The crucial navigation rights and freedoms that would
be ``locked-in'' by the United States becoming party to the Law of the
Sea Convention are important for Coast Guard mission execution
regardless of how many cutters the Coast Guard operates.

Question. How would the Convention impact your efforts to work with
your foreign counterparts, including during the conduct of interdiction
operations?

Answer. The Coast Guard's international partnerships are vital to
Coast Guard mission execution. The Convention would greatly enhance
these international partnerships, including strengthening our efforts
to:

Monitor, interdict, and prosecute those who threaten our
Nation's security;
Advance global and regional security priorities;
Lead, develop, and negotiate global shipping standards at
the International Maritime Organization for safe, secure, and
clean ships;
Combat illegal, unreported, and unregulated fishing; and,
Prevent environmental damage and natural resource
degradation associated with maritime activities.

In particular, bilateral agreements are important for successful
and efficient interdiction operations. The Convention provides the
cooperative framework, language, and operating procedures to negotiate
these bilateral agreements and thus would facilitate our negotiation
process. Under the status quo, the negotiation process often slows down
due to nonparty status.
______

Responses of ADM James Winnefeld, Jr., to Questions Submitted
by Senator John F. Kerry

Question. Some claim that the United States does not need to be a
party to the Convention--that because most of the rest of the world has
come to view the 1982 Convention as ``customary international law,''
the vital international norms that provide access to the seas and the
airways above them are indefinitely protected.

(a) Are you comfortable with relying indefinitely on
customary international law?

Answer. Relying on customary international law is not in the United
States best long-term interest. Treaty law remains the firmest legal
foundation upon which to base our operational posture.

(b) Does reliance on customary international law leave the
United States vulnerable to the other countries that might push
alternative interpretations of the treaty text? Could such
interpretations leave the U.S. military in a more tenuous
position?

Answer. Unlike treaty law, customary international law can change
subject to State practice at the local, regional or global level. As
States seek to interpret treaty provisions in a manner that restricts
freedom of navigation, U.S. reliance on customary international law
becomes far more vulnerable and needlessly places our forces in a more
tenuous position when conducting military activities.

Answer. The provisions on transit passage and archipelagic sea-
lanes passage--which were created pursuant to the Convention's
negotiations--are vital to the global mobility of our forces.
Additionally, provisions related to the limits of territorial seas and
innocent passage, the right to exercise the full range of high-seas
freedoms of navigation and overflight in the Exclusive Economic Zone,
and the right of warships and other government vessels to visit
suspected stateless vessels are key provisions that help ensure our
global force posture.

Question. Would acceding to the Convention provide you with another
tool--a force multiplier--that would aid the U.S. military in its
mission?

(a) How will the Convention support our operations?
(b) Will the U.S. military still conduct freedom of
navigation exercises?

Answer. Yes. U.S. accession would comprise another important tool
in our operators' toolkit. Having every available instrument of
national power at our disposal is essential to address a range of
challenges in an increasingly complex and diverse global security
environment.
(a) Becoming a party to the Convention supports operations by
protecting our navigational freedoms and global access for military and
commercial ships, aircraft, and undersea fiber optic cables. It would
also enhance our credibility and leadership in maritime affairs,
reinforce our commitment to the rule of law, and provide an effective
tool to counter interpretations of the Convention that seek to limit
military operations.
(b) Yes. U.S. military forces will continue to use operational
assertions to challenge excessive maritime claims under the U.S.
Freedom of Navigation Program. Becoming a party to the Convention would
strengthen the legitimacy of our operational assertions.

Question. If we accede to the Convention will our military
operations be in any way restricted?

Answer. No. For nearly 30 years, we have conducted all U.S.
military operations and activities in strict conformity with the
Convention's navigational provisions; U.S. accession will not change
the manner in which we operate. It will have no effect on our rules of
engagement or our exercise of self-defense.

Question. Article 298 of the Convention expressly allows States to
exclude ``disputes concerning military activities'' from dispute
resolution. If we join this treaty, we will invoke that exception.

Based on the treaty text and on how it is already being
implemented, do you have any concern whatsoever over whether
the United States will be able to exclude disputes concerning
military activities from the Convention's dispute resolution
mechanism, and that the United States will be able to decide
for itself whether an activity is a ``military'' one for the
purposes of the Convention?

Answer. No. I am confident that if the United States accedes to the
Convention, we would invoke this exception and exclude U.S. military
activities from any form of dispute resolution mechanisms or
procedures. I am equally confident that the United States will be able
to decide for itself what constitutes a military activity for purposes
of the Convention. Many other State Parties to the Convention,
including the other four permanent members of the U.N. Security
Council, have submitted declarations exempting their military
activities from dispute resolution. Each State Party retains the right
to determine what activities constitute ``military activities.''
______

Responses of Gen. William Fraser III, to Questions Submitted
by Senator John F. Kerry

Question. In your role as the Commander of U.S. Transportation
Command, and also as an aviator, would you address how the treaty aids
the unimpeded flow of sealift and airlift through strategic
chokepoints?

Answer. Unimpeded movement of our strategic sealift vessels and
airlift aircraft through the world's strategic chokepoints remains
essential to global mobility. Currently, the U.S. relies upon customary
international law as the primary legal basis to secure global freedom
of access. However, some countries may seek to redefine or reinterpret
customary international law in ways that directly conflict with our
interests. The Law of the Sea Convention provides legal support against
erosion of essential navigation and overflight freedoms. Accession will
give the U.S. leverage against countries seeking to reshape current
internationally accepted rules we depend upon to transport our cargo
and passengers.

Question. Does the Convention support your efforts to maintain
global mobility and partner with private industry to ensure the
delivery of troops, equipment, and supplies to and from the fight?

Answer. Yes, it does. The Law of the Sea Convention supports our
national security interests by defining the rights of U.S. military and
civilian vessels as they meet our mission requirements, reaffirms the
sovereign immunity of our vessels owned by the U.S. as well as those
used for government noncommercial service, and preserves our right to
conduct military activities and operations in Exclusive Economic Zones.
The Convention will help to simplify the complex maritime environment
for our military forces and our commercial partners who play a critical
role in developing new routes for transporting DOD cargo and in
enabling access to a vast global infrastructure used for the transport
of DOD cargo. This Convention provides important legal support for our
commercial partners who transport our cargo, unescorted by U.S.
warships, under the legal regimes of the Law of The Sea Convention. It
also supports our civil air carrier partners who transport nearly all
our military passengers and a significant amount of DOD air cargo.

Question. What are the impacts to USTRANSCOM should the United
States fail to ratify the Convention?

Answer. There are no immediate impacts to U.S. military ships and
commercial partners carrying DOD cargo. Over time, however, customary
international law may be interpreted in different ways, particularly by
emerging powers such as China, which may attempt to exert influence in
areas traditionally accepted as international passageways. Ratifying
the Convention will help to counter those interpretations and ensure
our rights to navigate through coastal areas, international straits and
Archipelagic Sea Lanes. The Law of the Sea Convention codifies, among
other things, the Rights of Innocent Passage, Transit Passage and
Archipelagic Sea Lanes Passage, reducing the risk of such challenges by
Convention signatories. The Convention also supports the right of
passage through and operations within foreign Exclusive Economic Zones,
which some nations currently attempt to treat as areas of coastal state
sovereignty.

Question. Please explain how the Law of the Sea Convention enhances
USTRANSCOM's ability to traverse through the Arctic region.

Answer. Currently, little surface transit takes place through the
Arctic, but we do exercise Arctic overflight while enroute to the
CENTCOM AOR. As Arctic ice melts and the region increases in importance
as a navigable area both on the sea and for overflight, it will become
increasingly important for USTRANSCOM to traverse the region freely as
more nations claim and secure extended Continental Shelf rights. As
Arctic transit becomes practicable, the Law of the Sea Convention will
define the regional international straits and determine the rights of
vessels transiting those straits. Becoming a Party would guarantee that
right by treaty law, vice reliance upon evolving interpretations of
customary international law.

Question. How does the Law of the Sea Convention support commercial
partners who are carrying cargo for U.S. forces?

Answer. More than 90 percent of all U.S. military supplies and
equipment are transported by sea in DOD and U.S.-flagged charter and
liner ships. The Law of the Sea Convention provides a legal basis for
the sovereign immune status of DOD vessels and U.S.-flag long-term
charters, and also provides important legal protection for U.S.-flag
liner shipping used for the transport of DOD cargo. Liner shipping,
U.S.-flagged vessels conducting commercial business while carrying DOD
cargo, would be afforded the same protections as any flagged ship under
the Convention even though they do not enjoy sovereign immune status.
______

Response of GEN Charles Jacoby, Jr., to Question Submitted
by Senator John F. Kerry

Question. Would a rule-based international framework such as Law of
the Sea Convention aid you in your efforts to maintain stability and
secure U.S. interests in the Arctic?

Answer. Yes. Use of diplomacy and the framework provided by the Law
of the Sea Convention would facilitate military cooperation in the
Arctic and would enhance my leadership position for building military
partnerships in the region as a combatant commander. A rule-based
framework aligns with my responsibility to support the peaceful opening
of the Arctic in a manner that strengthens international cooperation.
The Convention provides a crucial roadmap for resolving friction that
may arise as the Arctic opens, allowing conflict to be resolved
diplomatically, without coercion.
______

Response of GEN William Fraser III, GEN Charles Jacoby, Jr., and ADM
Samuel Locklear III to Question Submitted by Senator John F. Kerry

Question. As a combatant commander, if you had all of the material
resources you could possibly ask for at your disposal, would you still
support the Convention?

Answer. Yes. The Law of the Sea Convention provides an
internationally recognized legal framework to support our freedom of
navigation and overflight rights. It gives the United States a stronger
diplomatic and legal position to assert our rights where the
alternative might be to rely on my capabilities as a combatant
commander to ensure access and mobility in the maritime domain.
______

Responses of ADM Samuel Locklear to Questions Submitted
by Senator John F. Kerry

Question. As a combatant commander, if you had all of the material
resources you could possible ask for at your disposal, would you still
support the Convention?

Answer. Yes. As a combatant commander, regardless of the level of
available resources, I would still support the Convention.

Question. How has the Convention helped to resolve disputes in the
South China Sea? Please provide specific examples.

Answer. The Convention provides a legal framework for nations to
resolve maritime and boundary disputes, including many of the disputes
in the South China Sea. Generally, Article 279 of the Convention states
that Parties ``shall settle any dispute concerning the interpretation
or application of this Convention by peaceful means. . . .'' The
Convention recognizes several methods of dispute resolution, and does
not mandate a particular method. Specifically, Article 280 states that
Parties may ``agree at any time to settle a dispute between them
concerning the interpretation or application of this Convention by any
peaceful means of their own choice.'' These means include
``negotiation'' (Article 283), ``conciliation,'' (Article 284),
``arbitration'' (Article 287), or decision by the International
Tribunal for the Law of the Sea (Article 287) or the International
Court of Justice (Article 287).
An example of how the Convention helped to resolve a dispute in the
South China Sea is the maritime boundary between Vietnam and the
People's Republic of China in the Gulf of Tonkin (Beibu Gulf in Chinese
and Bac Bo Gulf in Vietnamese). Both Vietnam and China are parties to
the Convention: Vietnam signed it in December 1982, and ratified it in
July 1994; China signed it in December 1982, and ratified it in June
1996. The process of dispute resolution in the Gulf of Tonkin between
the two nations had three stages: (i) brief negotiations in 1974, (ii)
negotiations between October 1977 and June 1978, (iii) and negotiations
between 1992 and 2000. In 1993, the two nations reached a general
agreement on the basic principles to be applied to settle the dispute,
including ``applying the International Law of the Sea.'' On December
25, 2000, the two nations signed an Agreement on the Delimitation of
the Territorial Seas, Exclusive Economic Zones, and Continental
Shelves. Article 1, Section 1 of the Agreement acknowledged, ``The
Parties have determined the demarcation line for the territorial seas,
exclusive economic zones and continental shelves of the two countries
in the Beibu Gulf in accordance with the 1982 United Nations Convention
on the Law of the Sea, generally accepted principles of international
law and international practice, based on the full consideration of all
relevant circumstances of the Beibu Gulf and on the equitable
principle, and through friendly consultation.'' (Emphasis added.)
An example of how the Convention has helped to resolve a dispute
elsewhere in the Asia-Pacific region, similar to some of the disputes
in the South China Sea, includes the March 2012 case between Bangladesh
and Burma before the International Tribunal for the Law of the Sea
concerning their maritime boundary. That case demonstrates that, if the
Parties to a particular dispute have the political will to utilize the
Convention's methods of dispute resolution, the Convention provides an
effective legal framework for resolving maritime and boundary disputes.

Question. In your dealings with military officials in the region,
does our non-party status to this Convention have an impact on your
mission?

Answer. Yes. In the Asia-Pacific region, the United States has
national interests in security and stability, freedom of navigation and
open access to the maritime domain, respect for international law, and
unimpeded commerce and economic development. We can best protect our
national security and our leadership role in the Pacific by acceding to
the Convention. As the Secretary of Defense stated in his May 23
testimony, a key component of our strategy is to reenergize and
strengthen our network of defense and security partnerships throughout
the Asia-Pacific region. An area of universal interests among our
allies and partners is protection of the rights, freedoms, and uses of
the sea that underpin all nations' access to the world's oceans.
Joining the Convention will enhance seamless integration of
international legal authorities between our forces and those of our
partners and will place the United States in the best position to lead
international efforts in the maritime domain.
As we look into the future, our status as a non-Party will
increasingly disadvantage the United States. Presently, the United
States is forced to rely on customary international law as the basis
for asserting our rights and freedoms in the maritime domain. In
situations when coastal States assert maritime claims that exceed the
rights afforded to them by the Convention, U.S. Pacific Command
challenges such claims through a variety of means including Freedom of
Navigation operations, military-to-military communications, and
diplomatic protests through the State Department. When challenging such
excessive claims through military-to-military or diplomatic exchanges,
the United States typically cites customary international law and the
relevant provisions of the Convention. Unfortunately, because we are
not a party to the Convention, our challenges are less credible than
they would otherwise be. Other States are less persuaded to accept our
demand that they comply with the rules set forth in the Convention,
given that we have not joined the Convention.

Question. How does not being a party to the Convention hamper you
when you push back against spurious territorial claims and restrictions
on U.S. military activity?

Answer. The United States, as well as our allies and partners, face
various attempts from particular coastal States to limit military
activities in large areas of the ocean. The Convention provides a
stable legal framework of rights, freedoms, and uses of the sea, as
well as a robust negotiating history, upon which U.S. Pacific Command
could rely to challenge such coastal States. As a non-party to the
Convention, however, we are not able to effectively, credibly rely on
the Convention as a source of law to protect our interests and
challenge excessive maritime claims of coastal States.
______

Response of ADM James Winnefeld, Jr., to Question Submitted
by Senator Robert P. Casey, Jr.

Question. The United States has declined membership in the United
Nations Convention on the Law of the Sea for three decades. Why should
joining the Convention on the Law of the Sea be a priority for the
United States at this time? From the perspective of the U.S. military,
what are the expected advantages of membership in the Convention on the
Law of the Sea? What are the possible drawbacks?

Answer. Joining the Convention now is a priority because the global
environment has changed since the Convention's negotiation and entry
into force. From the perspective of the U.S. Armed Forces, joining the
Convention is essential to protecting navigational freedoms and U.S.
national security interests while positioning our forces for the future
as we confront an increasingly complex security environment. Through
internal legislation and their own efforts to interpret the Convention,
rising powers seek to erode the favorable navigational provisions that
are essential to the global mobility of U.S. forces. As a preeminent
maritime power, we must operate inside of the Convention to influence
and lead in manner that prevents this erosion and locks in vital
navigational provisions. As we rebalance toward the Asia-Pacific
region, our status as a Party to the Convention will position the U.S.
Armed Forces to exercise more influence and leadership as tensions and
disputes arise in the maritime domain. As the Arctic becomes available
for increased navigation and use, the U.S. Armed Forces will be better
postured to promote and protect U.S. national security interests and
effectively interact with the other seven Arctic Council nations who
are parties to the Convention. From my perspective, there are no
drawbacks to joining the Convention.
______

Response of ADM Jonathan W. Greenert to Question Submitted
by Senator Robert P. Casey, Jr.

Question. Some observers have argued that U.S. membership in the
United Nations Convention on the Law of the Sea will restrict the U.S.
Navy's ability to navigate the seas and conduct maritime operations
freely.

What is the possible negative impact, if any, of U.S.
accession to the Convention on the Law of the Sea on the
freedom of U.S. Navy operations?
Are there specific provisions within the Convention that
protect U.S. freedom to conduct maritime military operations?

Answer. U.S. Navy operations have been conducted consistent with
the navigational provisions of the Convention for the past 30 years
specifically because those provisions reinforce our sovereign and
security interests. Accession to the Convention will have no negative
impact on the freedom of U.S. Navy operations. The Convention's
provisions protect U.S. freedom to conduct maritime military
operations. Specifically, Articles 58 and 87 preserve the right to
exercise high-seas freedoms in foreign exclusive economic zones,
Article 17 provides the right to exercise innocent passage through
foreign territorial seas without discrimination based on cargo or means
of propulsion, Article 38 provides the right of navigation and
overflight through international straits in the normal mode of
operation, and Article 95 provides warships on the high seas with
complete immunity from the jurisdiction of foreign nations. The
Convention's navigational provisions were designed to ensure continued
protection of sovereign rights and enable naval forces to engage in
unimpeded free navigation of the high seas to defend Member States'
security and economic interests in the maritime domain.
______

Response of ADM Samuel Locklear to Question Submitted
by Senator Robert P. Casey, Jr.

Question. The United States has significant national security and
economic interests in the Asia-Pacific maritime region. The Department
of Defense's announcement of plans to shift additional forces to the
Pacific indicates that this region is an increasingly high priority for
the U.S. military.

Has the United States status as a nonmember of the United
Nations Convention of the Law of the Sea hampered our ability
to protect and promote our interests in this critical maritime
region up to this point? If so, how?
How will accession to the Convention improve our ability to
pursue these interests?

Answer. Not being a party to the U.N. Convention on the Law of the
Sea (UNCLOS) is used against the U.S. when we challenge--diplomatically
or operationally--excessive maritime claims of nations in the Asia-
Pacific region. Most States in that area are parties to the Convention
and cite its language as legal authority for their claims. Some of
these countries state the U.S. invocation of the UNCLOS language is
disingenuous as a non-party since the U.S.'s legal foundation is based
in customary international law as opposed to treaty law. The United
States asserts the Convention embodies customary international law,
which is binding on all nations regardless of their status with respect
to the Convention. However, customary international law is created by
state practice over time. States' claims and actions create and alter
customary international law. It is not necessarily static. However, the
Convention binds the parties to the language of the Convention and that
language only changes through a formal amendment process. By acceding
to the Convention, the United States will be in a better position to
interpret and control that language.

Letters Submitted for the Record by Senator John F. Kerry

Letters Submitted for the Record by Senator James M. Inhofe

THE LAW OF THE SEA CONVENTION
(TREATY DOC. 103-39)

----------

THURSDAY, JUNE 14, 2012 (p.m.)

U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 2:36 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. John F. Kerry
(chairman of the committee) presiding.
Present: Senators Kerry, Shaheen, Coons, Lugar, Corker,
Risch, Inhofe, DeMint, Isakson, Barrasso, and Lee.

OPENING STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS

The Chairman. The hearing will come to order.
Thank you all for being here. I am sorry we are late.
Let me begin. At the outset, let me say to people that I
apologize that we are back in the smaller hearing room here. We
tried a month ago to reserve Hart 219 for this afternoon, and
we simply were not able. Somebody else had it for this time.
So we are here, and I know there are a bunch of people
outside who would have liked to have come in. And I am sorry
that we are not able to accommodate that, but it is not for any
other reason. We are going to try and have our hearings there
because we know there is interest, and it is just easier for
everybody. But that is why we are back in here this afternoon.
This is our third hearing on the Law of the Sea. We are
going to have some more after this, no doubt. And I am
particularly looking forward to this afternoon because what I
like about it is that we have folks with different points of
view on the same panel and an opportunity to really dig in,
which I hope we will do. And I think that will be useful to
everybody here.
Senator Inhofe, along with a number of other colleagues,
requested that I invite four witnesses to testify, and so we
did. We invited all four. Two of them, Secretary Rumsfeld and
Steven Groves, agreed to join us today, along with two other
distinguished witnesses. And I am really happy that all of you
could take the time to be here with us.
Donald Rumsfeld, everybody knows, is currently president of
the Rumsfeld Foundation; has held various very senior positions
in previous administrations, most recently serving as Secretary
of Defense under President George W. Bush.
He is joined by John Negroponte, a veteran also of multiple
administrations. Most recently, Mr. Negroponte served as our
first Director of National Intelligence and then as Deputy
Secretary of State in the George W. Bush administration. And he
is currently vice chairman at McLarty Associates.
We are also pleased to have John Bellinger. From 2001 to
2005, he served in the White House as the associate counsel to
President George W. Bush, and then as the Legal Adviser to the
National Security Council. And from 2005 to 2009, he was the
Legal Adviser to the State Department. He is now a partner at
the law firm Arnold & Porter.
And finally, rounding out the panel is Steven Groves, the
Bernard and Barbara Lomas Fellow at the Heritage Foundation,
and Mr. Groves was previously senior counsel to the Senate
Permanent Subcommittee on Investigations.
So welcome to all of you.
Now this morning, we heard a panel from some of our most
senior operational commanders, along with the Vice Chairman of
the Joint Chiefs and the top officers in the Navy and the Coast
Guard, and they added their voices to that of Chairman of the
Joint Chiefs and the Secretary of Defense and the Secretary of
State, calling for ratification of the treaty.
We have also here heard and we have introduced into the
record letters from other combatant commanders, all of whom
strongly support joining the Law of the Sea Convention.
I think it is my understanding, drawing on the two hearings
we have had, that even the critics of the Law of the Sea are
beginning to join the consensus that the navigational bill of
rights provided for in the treaty and which our military and
our shippers rely on every day are beneficial to the United
States.
As I see it--and just listening, I hope I am not
mischaracterizing it--I think the bulk of the debate is really
not focused on the navigational provisions, but rather on other
aspects of the treaty. And I believe personally--I am not going
to go into this at length because I don't think that would be
fair in terms of my chairmanship. But I do think that there are
a lot of criticisms that are inaccurate, and what I want to try
to do is separate what is accurate, what is not, so that the
committee can, hopefully, in the resolution of ratification
deal with those things that we think we need to deal with.
But let me give you an example of that. The International
Seabed Authority has been accused of being, but is not, some
bloated U.N. bureaucracy. It is totally separate from the
United Nations and has a staff of less than 40. Nothing in its
13-year history suggests that it is an organization that is out
of control or is somehow going to act inconsistent with our
interests. Or that in joining it, we would not be able to
effectively use our veto in the ISA Council to advance U.S.
interests.
Other criticisms have focused on the royalty provisions,
other things. But I think we need to dig into facts, and I am
going to just sort of let that happen.
The one thing I do want to put out here is it is clear that
the original provisions of the 1982 Convention were not fully
consistent with free market principles and would have
disadvantaged our businesses. If I were looking strictly at the
four corners in the 1982 Convention, I would have had problems,
as Ronald Reagan did and others did.
But those problems, I think in most people's judgment, have
been addressed in full. Bob Stevens, the CEO of Lockheed
Martin, recently wrote to me urging that we pass this
Convention. And this is what he said.
``The multibillion dollar investments needed to establish
an ocean-based resource development business must be predicated
upon clear legal rights established and protected under the
treaty-based framework of the Law of the Sea Convention,
including the International Seabed Authority. Other
international players recognize this same reality and are
acting upon it. Countries, including China and Russia, are
moving forward aggressively within the treaty framework, and
several of these countries currently hold exploration licenses
from the International Seabed Authority.
``Unfortunately, without ratifying the Convention, the
United States cannot sponsor claims with or shape the deep
seabed rules of the ISA. Yet that is the critical path forward
if the United States intends to expand and ensure access for
both U.S. commercial and Government interests to new sources of
strategic mineral resources.''
I might add that Lockheed is not alone. I recently received
a letter from Rex Tillerson, the head of ExxonMobil. He
expressed ExxonMobil's support for ratification and said this.
``As an American company engaged in the global market for
energy development, ExxonMobil is interested in exploring for
oil and gas resources that may exist under the vast new areas
that are recognized for sovereignty purposes under the Law of
the Sea. The exploration and development of offshore resources
is complicated and costly, and operating in the extended areas
addressed under the Law of the Sea will be even more so. Before
undertaking such immense investments, legal certainty in the
property rights being explored and developed is essential.''
I think our businesses have overwhelmingly made that point,
including the Chamber of Commerce, the American Petroleum
Institute, the telecommunications industry, and the Chamber of
Shipping of America, who just wrote to me in support of the
treaty. And I would like to enter each of those letters in the
record.
So this is part of the area we will be going forward. In a
few weeks, we will have many of these people here to testify,
to talk about the economic realities.
But today, we have experts who really understand the
negotiation of the treaty and so forth and have examined it.
And we look forward to a very healthy dialogue and,
hopefully, very productive results for the committee.
Senator Lugar.

OPENING STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA

Senator Lugar. Thank you, Mr. Chairman.
This morning the Foreign Relations Committee heard
unequivocal testimony from our uniformed military leadership in
support of the Law of the Sea Convention. At an upcoming
hearing, the committee will hear from a broad spectrum of
ocean-related businesses that strongly support this treaty.
When the Convention was before this committee in 2003 and
2007, military and business support for the Law of the Sea was
similarly overwhelming. This underscores that Americans who are
involved in the oceans professionally on a daily basis--those
who defend our country's interests on the seas and those who
invest their money and create jobs related to ocean
enterprises--want this Convention ratified.
Unlike some treaties, such as the Kyoto agreement or the
Comprehensive Test Ban Treaty, where United States
nonparticipation renders the treaty virtually irrelevant or
inoperable, the Law of the Sea will continue to form the basis
of maritime law regardless of whether the United States is a
party. International decisions related to national claims on
Continental Shelves beyond 200 miles from our shore, resource
exploitation in the open ocean, navigation rights, and other
matters will be made in the context of the treaty whether we
join it or not.
Consequently, the United States cannot insulate itself from
the Convention merely by declining to ratify. It is the
accepted standard in international maritime law and the
dominant forum for the evolution of international ocean policy.
Americans who use the ocean and interact with other nations on
the ocean have to contend with the Law of the Sea on a daily
basis.
They want the United States to participate in the
structures of Law of the Sea to defend their interests and to
make sure that other nations respect our rights and our claims.
Among the questions addressed by Law of the Sea is how should
resources in the deep seabed or on a nation's Extended
Continental Shelf beyond the 200-mile limit be exploited?
The treaty makes it possible for a mining or drilling
company to stake an unequivocal legal claim on the ocean floor
and have it recognized under international law. Some have
argued that the United States accession to the Law of the Sea
Convention is unnecessary to secure the legal basis for
companies to fully exploit oil, natural gas, and mineral wealth
on the ocean floor. But that is not the opinion of the American
companies that might invest their resources in this activity.
They are in favor of the treaty, because without the
certainty of title provided by the Law of the Sea Convention,
they would not go forward with many projects requiring large
investments. Their concern is that after doing the expensive
exploration, research, testing, and construction necessary to
exploit a site, they have to be certain that another entity
won't be able to free-ride off their investment or challenge
their claim in international courts.
The oil drilling and mining companies prefer to pay a small
royalty beginning in the 6th year of production in return for
an international system that gives them undisputed claim to the
resources produced. This royalty provision of the Convention
was negotiated with the participation of extraction companies.
They judged that it is reasonable given the legal certainty it
secures and the value of what might be produced, especially
since the first 5 years of production will not be subject to
any royalty.
This is why Law of the Sea is endorsed by the United States
Chamber of Commerce, the American Petroleum Institute, and
every industry that has a stake in the deep seabed mining and
drilling. In other words, our resource extractors are telling
us that if we want them to move forward with large-scale
development of ocean floor resources that could contribute
significantly to United States energy and national security and
create jobs, we need to ratify Law of the Sea.
I have been especially critical of President Obama and the
State Department for failing to approve the Keystone XL
pipeline because it provides clear long-term benefits to job
creation and energy security. In that case, the President's
delay is unnecessarily disadvantaging the United States economy
over concerns that have largely been resolved.
If the U.S. Senate declines to ratify Law of the Sea, I
believe we will be doing the same thing. During this Congress
few topics have been more central to Senate deliberations than
job creation, energy security, and the needs of our military.
The Law of the Sea Convention is the rare initiative that would
contribute to all three objectives.
I welcome, as you have, Mr. Chairman, our distinguished
witnesses and look forward to their testimony.
The Chairman. Senator Lugar, thank you very much.
So we will proceed. Mr. Secretary Rumsfeld, if you would
lead off, sir, I would appreciate it. And then Secretary
Negroponte, Counselor Bellinger, and Mr. Groves.

STATEMENT OF HON. DONALD RUMSFELD, FORMER U.S. SECRETARY OF
DEFENSE, THE RUMSFELD FOUNDATION, WASHINGTON, DC

Mr. Rumsfeld. Mr. Chairman and members of the committee,
thank you for your invitation.
I have submitted some brief prepared remarks, and I will
try to adjust them down to 5 minutes.
The Chairman. Without objection, all of the testimonies
will be placed in the record in full as if read in full.
Mr. Rumsfeld. It is a pleasure to appear with these experts
on this subject. I am 30 years away from it, but I am pleased
to be here.
It was 30 years ago that President Reagan asked me to meet
with world leaders to represent the United States in opposition
to the Law of the Sea Treaty. Our efforts soon found a
persuasive supporter in British Prime Minister Margaret
Thatcher. Today, as the U.S. Senate again considers approving
this agreement, the reasons for their opposition, I believe,
remain as persuasive.
When I met with Mrs. Thatcher in 1982, she promptly grasped
the issues at stake. Her conclusion on the treaty was
unforgettable. She said what this treaty proposes is nothing
less than the international nationalization of roughly two-
thirds of the Earth's surface. And then referring to her
battles dismantling Britain's state-owned mining and utility
companies, she added, ``And you know how I feel about
nationalization.''
The major idea underlying the Law of the Sea Treaty is that
the riches of the oceans beyond national boundaries are the
common heritage of mankind and, thus, supposedly owned by all
people, which means they are unowned.
This idea of ownership, which is encompassed in the treaty,
requires that anyone who finds a way to make use of such riches
by applying their labor or their technology or their risk-
taking are required to pay royalties of unknown amounts,
potentially billions--possibly even tens of billions--over an
extended period, an ill-defined period of time, to the new
International Seabed Authority for distribution to less
developed countries.
This, in my view, is a new idea of enormous consequence. It
establishes a way of looking at industry investment, talent,
risk, and good fortune that argues in favor of distributing a
significant portion of the value of the minerals in the deep
seabeds to developing countries. I suppose it is also
conceivable that it could become a precedent for the resources
of outer space.
The principle that advanced countries, when they make use
of resources that previously belonged to no one, owe royalties
to less developed countries is a novel principle that has, in
my view, no clear limits. I know of no other treaty that
follows that pattern.
The idea is fundamental and integral to the Law of the Sea
Treaty. It is the major reason I believe that treaty should not
be ratified.
I don't argue against developed countries providing
financial and other forms of aid to poor countries. There are
moral and practical arguments in favor of such aid. But the
decision to provide such aid is, has been, and probably should
be a sovereign choice for each nation.
In the case of our country, it is a choice of our citizens
and you, their elected representatives. Very simply, I do not
believe the United States should endorse a treaty that makes it
a legal obligation for productive countries to pay royalties to
less productive countries based on rhetoric about ``common
heritage of mankind.''
The wealth distribution idea incorporated in the Law of the
Sea Treaty is especially objectionable because the mechanism
for the redistribution is poorly designed. It uses a newly
created multinational Seabed Authority, which is effectively a
U.N. agency, instead of the U.S. Congress through our foreign
aid programs, or through the World Bank of which we and others
are members.
If the treaty were to be ratified, the United States
apparently would receive a permanent seat on the Council of the
Authority. Even so, the Authority would not be effectively
accountable to the American people any more than any other U.N.
agency is accountable. And it must be acknowledged that the
United Nations has a poor record in administering its programs.
For example, the U.N. Oil for Food Programme was a multibillion
dollar scandal.
Some businesses, as the chairman and the ranking member
have indicated, have expressed support for the treaty in that
it would provide greater certainty, which I agree could be
helpful. I was in business for 20 years, and there is no
question but that they make that argument and it is a valid
one. And it needs to be considered and weighed.
The most persuasive argument for the Law of the Sea Treaty,
in my view, is the U.S. Navy's desire to ``lock in'' some
navigation rights. It is correct that the treaty would provide
some benefits, clarifying some principles, and perhaps making
it easier to resolve certain disputes. But the U.S. Navy has
done quite well without this treaty for the past 200 years and
certainly during the 20 or so years since the treaty has been
in effect, relying often on customary international law to
assert navigation rights.
In my view, the Law of the Sea Treaty would not make a
large enough additional contribution regarding navigation
rights or business certainty to counterbalance the problems it
would create. As Members of the Senate carefully read each of
the 208 pages of this document, the 320 articles, and also the
1994 Agreement, I think they will appreciate the basis for
those concerns and uncertainties.
I respect the concerns raised by the Navy, by the military,
and by some in the business community. But the fundamental
objections raised by Mrs. Thatcher in her 1982 objection to
effectively nationalizing the world's oceans through a new,
multinational bureaucracy I believe outweigh the advantages and
make the
treaty, on balance, a net loss for U.S. interests.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Rumsfeld follows:]

Prepared Statement of Hon. Donald Rumsfeld

Mr. Chairman and members of the committee, 30 years ago President
Ronald Reagan asked me to meet with world leaders to represent the
United States in opposition to the Law of the Sea Treaty. Our efforts
soon found a persuasive supporter in British Prime Minister Margaret
Thatcher. Today, as the U.S. Senate again considers approving this
flawed agreement, the reasons for President Reagan and Mrs. Thatcher's
opposition remain every bit as persuasive.
When I met with Mrs. Thatcher in 1982, she promptly grasped the
issues at stake. Her conclusion on the treaty was unforgettable: ``What
this treaty proposes is nothing less than the international
nationalization of roughly two-thirds of the Earth's surface.'' Then,
referring to her battles dismantling Britain's state-owned mining and
utility companies, she added, ``And you know how I feel about
nationalization. Tell Ronnie I'm with him.''
President Reagan, for his part, had just been elected to office.
The treaty had been presented to him as a done deal requiring only his
signature and U.S. Senate consent to its ratification. Then as now,
most of the world's nations had already approved it. The Nixon, Ford,
and Carter administrations had all gone along with it. American
diplomats generally supported the treaty and were shocked when Reagan
changed America's policy. Puzzled by their reaction, the President was
said to have responded, ``But isn't that what the election was all
about?''
Yet, as the man known as the Gipper might say, here we go again. An
impressive, if unlikely, coalition is now arrayed in support of U.S.
ratification of the United Nations Law of the Sea Treaty. As during the
Reagan years, dozens of diplomats and national security officials,
including every living former Secretary of State have endorsed the
Obama administration's goal of ratification. The U.S. Navy wants to
``lock in'' existing and widely accepted rules of high-seas navigation.
Business groups say the treaty could help them by creating somewhat
more certainty.
Can so many people, organizations, and countries be mistaken? The
answer, I believe, is ``Yes.'' Various proponents have their particular
considerations, each valid, but none, in my view, has made a compelling
case that the treaty would, on balance, benefit America as a whole.
Though modest ``fixes'' were made in 1994 in a separate agreement
signed by some, but not all, of the treaty's parties in the hope of
addressing some of the flaws identified in the Reagan-era version of
the treaty, its most serious defect is unaltered: the Law of the Sea
Treaty remains a sweeping power grab that could prove to be the largest
mechanism for the worldwide redistribution of wealth in human history.
The treaty proposes to create a new global governance institution
that would regulate American citizens and businesses, but which would
not be accountable politically to the American people. Some of the Law
of the Sea Treaty's proponents pay little attention to constitutional
concerns about democratic legislative processes and principles of self-
government, but I believe the American people take seriously threats to
these foundations of our Nation.
The treaty creates a United Nations-style body called the
``International Seabed Authority.'' ``The Authority,'' as U.N.
bureaucrats call it in Orwellian shorthand, would be involved in all
commercial activity such as mining and oil and gas production in
international waters. It is to this entity that the United States,
pursuant to the treaty's article 82, would be required to transfer a
significant share of all royalties generated by American companies--
royalties that would otherwise go to the U.S. Treasury for the benefit
of the American people.
Over time, hundreds of billions of dollars could flow through the
``Authority'' with little oversight. The United States could not
control how those revenues are spent. Under the treaty, the Authority
is empowered to redistribute these so-called ``international
royalties'' to developing and landlocked nations with no role in
exploring or extracting those resources. It would constitute a massive
form of global welfare, courtesy of the American taxpayer. It would be
as if fishermen who exerted themselves to catch fish on the high seas
were required, on the principle that those fish belonged to all people
everywhere, to give a share of their take to countries that had nothing
to do with their costly, dangerous, and arduous efforts.
Worse still, these sizable ``royalties'' could go to corrupt
dictatorships and state sponsors of terrorism. For example, as a treaty
signatory and a member of the ``Authority's'' executive council, the
Government of Sudan--which has harbored terrorists and conducted a mass
extermination campaign against its own people--would have just as much
say as the United States on issues to be decided by the ``Authority.''
Disagreements among treaty signatories are to be decided through
mandatory dispute resolution processes of uncertain integrity.
Americans should
be uncomfortable with unelected and unaccountable tribunals appointed
by the Secretary General of the United Nations serving as the final
arbiter of such disagreements.
Even if one were to agree with the principle of global wealth
redistribution from the United States to other nations, other U.N.
bodies have proven notably unskilled at financial management. The U.N.
Oil-for-Food Programme in Iraq, for instance, resulted in hundreds of
millions of dollars in corruption and graft that directly benefited
Saddam Hussein and those nations friendly to Iraq. The Law of the Sea
Treaty is another grand opportunity for scandal on an even larger
scale.
The most persuasive argument for the Law of the Sea Treaty is the
U.S. Navy's desire to shore up international navigation rights. It is
true that the treaty might produce some benefits, clarifying some
principles and perhaps making it easier to resolve certain disputes.
But our Navy has done quite well without this treaty for the past 200
years, relying often on centuries-old, well-established customary
international law to assert navigational rights. Ultimately, it is our
naval power that protects international freedom of navigation. The Law
of the Sea Treaty would not make a large enough additional contribution
to counterbalance the problems it would create.
In his farewell address to the Nation in 1988, President Reagan,
advised the country: ``Don't be afraid to see what you see.'' If the
Members of the U.S. Senate fulfill their responsibilities, actually
read the Law of the Sea Treaty and consider it carefully, I believe
they will come to the conclusion, as I have, that the treaty's costs to
our security and sovereignty would far exceed any benefits for the
United States.

The Chairman. Thank you, Mr. Secretary. Appreciate it.
Secretary Negroponte.

STATEMENT OF HON. JOHN NEGROPONTE, FORMER U.S. DEPUTY SECRETARY
OF STATE, WASHINGTON, DC

Ambassador Negroponte. Thank you, Mr. Chairman and members
of the committee, for this opportunity to appear before this
committee to discuss the Law of the Sea Convention.
Let me say at the outset and as unequivocally as possible
that I believe the United States should accede to this treaty.
As you have heard recently from the Secretaries of State and
Defense, the Chairman of the JCS, and our maritime service
chiefs, there are real costs to remaining outside the treaty.
For the benefit of our country, I hope this is the year that we
finally become party to the Law of the Sea.
My involvement with this treaty dates back to 1970 when I
was a member of the National Security Council staff. I was
given the assignment of helping coordinate the preparation of
President Nixon's first directive on the Law of the Sea, and I
have worked on this issue on and off in the ensuing years,
although I would not claim to be an expert.
In the Reagan administration, I served as an Assistant
Secretary of State for Oceans and International Environmental
and Scientific Affairs at the State Department, and then as
President Reagan's Deputy National Security Adviser. And then
in the George W. Bush administration, as Director of National
Intelligence and, finally, as Deputy Secretary of State.
These experiences have only strengthened my support for the
treaty. And as you will recall, Senator, I was the lead
administration witness in the last administration when we
appeared before the committee in 2007.
The United States has consistently sought to balance the
interests of countries in controlling activities off their
coasts and the interests of all countries in protecting freedom
of navigation. The United States joined a group of Law of the
Sea treaties in 1958 by which it is still bound. But those
treaties left open some important issues.
For example, they did not set forth the maximum breadth of
the territorial sea, an issue of critical importance to freedom
of navigation. And they did not elaborate a procedure for
providing legal certainty as regards the Continental Shelf.
Under President Nixon, the United States proposed the
concept of a treaty that would address these concerns, and it
was President Nixon, by the way, who first introduced the
notion of a U.S. policy supporting this concept of the common
heritage of mankind. I think what we have been debating in the
ensuing years is exactly how you define that in ways with which
we can live.
Formal negotiations were launched a little over 3 years
later, and the Convention was finalized in 1982. The United
States supported the 1982 Convention, with the exception of the
deep seabed provisions. And in 1983, President Reagan issued a
statement explaining that because of certain concerns with
these provisions, the United States would not sign the
Convention.
He affirmed, however--and I think this is the very
important--that the United States would voluntarily follow the
bulk of the treaty. Negotiations began during the George
Herbert Walker Bush administration to rewrite the deep seabed
mining provisions. An implementing agreement was signed in
1994, which dealt with each of the problems identified by
President Reagan.
The Clinton administration submitted the Convention and the
1994 Agreement to the Senate in July 1994, and President George
W. Bush urged approval of the Convention, both in 2004 and in
2007, arguing that, ``Joining will serve the national security
interests of the United States and secure U.S. sovereign rights
over extensive marine areas including the valuable natural
resources they contain.''
Why is it important for the United States to join the
Convention now? To begin, the United States would gain legal
protection for its sovereignty, sovereign rights and
jurisdiction in offshore zones, the freedom of maneuver and
action for its military forces, and protection for economic and
marine research interests at sea.
U.S. firms would be able to obtain essential
internationally recognized and exclusive rights to explore and
exploit deposits of strategic minerals on the ocean floor
beyond national jurisdiction and secure recognized title to the
recovered resources. The Convention, as revised by the 1994
Agreement on Implementation, provides the commercial regime
needed for private industry, and it fully satisfies the
criteria articulated in 1982 by President Reagan.
Allow me to cite a few specific practical reasons of how
remaining outside the Convention damages U.S. national
interests. These are not academic or philosophical points, but
real world examples of how we are undercutting our national
interests by failing to join.
First, the Convention is now open for amendment and could
be changed in ways that adversely impact the navigational
rights and high seas freedoms on which our military depends for
global mobility. If we join now, our rights are protected in
two ways.
First, it will allow us to shape the interpretation,
application, and development of specific amendments to the
nonseabed parts of the Convention. If we delay joining until
after an amendment is adopted, we could choose only to accept
or reject another party's amended version.
In addition, once the United States takes its permanent
seat at the International Seabed Authority, it will have a veto
over any amendments related to the seabed parts of the
Convention.
Second, as tensions flair in critical regions like the
Persian Gulf and South China Sea, it is important that the
United States provide its men and women in uniform with every
means available to protect the navigational rights enshrined in
the treaty. Right now, the United States has two ways to defend
its maritime interests. We can initiate a diplomatic process to
lodge a complaint with a state that denies us free passage, or
we can assert our right to passage by putting our vessel in
harm's way.
The freedom of navigation program is an important tool in
our military's arsenal, but it does carry a risk of escalation.
Law of the Sea is an additional tool we can use, and it is one
the Navy and the Coast Guard have asked us repeatedly to
provide them.
Third, by not joining the treaty the United States is
limited in its leadership ability to resolve maritime disputes
between its allies, such as Japan and Korea, and in
strategically important
regions, such as the Gulf of Aden or the South China Sea.
Fourth, by remaining on the outside, we have created self-
imposed obstacles to securing the most widespread possible
cooperation in our counterproliferation and counternarcotics
operations at sea. The United States refusal to join the
Convention undermines the confidence of other countries, and
they do bring this up, in our willingness to abide by the
accepted rules of the road when conducting interdiction
activities.
Fifth, and critically important, our failure to join the
Convention to date is negatively impacting our businesses. At
least one U.S. company, Lockheed Martin, as has been mentioned,
is prepared to harvest critical rare earth minerals on the deep
seabed--and I personally spoke to representatives of Lockheed
about this--minerals that are used in our weapon systems, cell
phones, and automobiles.
But as a nonparty to the treaty, the United States cannot
sponsor Lockheed to go out and get these minerals from the
seabed. While the United States watches, 17 countries have
approved exploration claims for deep seabed mining.
Five new applications will be considered this summer at the
annual session of the International Seabed Authority. The
United Kingdom and Belgium are joining China, India, Germany,
France, Japan, South Korea, and seven other nations in
commercial exploration of strategic minerals while the United
States watches from ashore.
Similarly, our energy companies are less likely to invest
the billions of dollars necessary to exploit oil and gas
reserves in the Arctic and elsewhere because of the legal
uncertainty surrounding the outer limit of the United States
Continental Shelf. The only way to give the companies the
clear, internationally recognized title that they need before
investing this type of money is to join the treaty and work
through its Continental Shelf process.
Last, Mr. Chairman, one other point I would like to make
with respect to the diplomatic aspect of this question and one
which I think is important as a person who was a diplomatic
practitioner for more than 40 years. And that was the
unprecedented nature, I felt, of the concession by the rest of
the international community in its willingness to reopen this
Convention because of the objections that the United States
raised when President Reagan said he would not sign the treaty.
And after learning of our objections, they came to us and
invited us and said we are prepared to reopen this part 11 of
the Law of the Sea Treaty to try and meet your objections so
that you will feel more comfortable coming onboard. We did
that. We held these talks.
Twelve years later, we reached agreement on the revised
part 11. And I think, as a matter of diplomatic practice and in
terms of credibility in relationships with the countries with
which we deal, the idea that they accommodated our concerns and
reopened the treaty and modified that chapter and for us again
to reject this Convention now that those concerns have been
met, I would say would be tantamount to a diplomatic slap in
the face, if not more.
Mr. Chairman, I am confident that the committee will agree
to--that United States accession to the treaty is the best way
to secure essential navigational and economic rights related to
the ocean.
Thank you.
[The prepared statement of Ambassador Negroponte follows:]

Prepared Statement of Ambassador John Negroponte

Mr. Chairman, thank you for the opportunity to appear before this
committee to discuss the 1982 U.N. Convention on the Law of the Sea.
Let me say at the beginning of my testimony and as unequivocally as
possible that I believe the United States should accede to this treaty.
As you have heard recently from the Secretaries of State and Defense,
and the Chairman of the Joint Chiefs of Staff as well as our maritime
service chiefs, there is strong consensus that it is in our national
interests to do so, and, as I will elaborate in my remarks, there are
real costs of remaining outside the Convention.
For the benefit of our country, I hope this is the year we finally
become party to the Law of the Sea.
There is broad and bipartisan consensus from our Nation's military,
political, and business leadership to join the treaty because, as the
world's greatest maritime power with a host of maritime interests,
merely treating the Convention as customary law is not good enough.
As the committee has heard hours of previous testimony, I hope not
to repeat general points here about why the United States should sign
on to the treaty which I wholeheartedly support, but rather I will cite
specific practical reasons of how remaining outside the Convention
damages U.S. national interests. These are not academic or
philosophical points, but real world examples of how we are undermining
our national interests by not officially joining.
First, the Convention is now open for amendment and could be
changed in ways counter to our interests in navigational freedoms or
access to seabed resources. If we join now, however, our rights are
protected in two ways: first, by the Convention's requirement that
amendments to the nonseabed parts of the Convention only apply to those
countries that ratify them. Even countries that join the Convention
after it is amended must deal with those that have not ratified an
amendment according to the terms of the unamended Convention. If we
delay until after an amendment is adopted, we could only choose the
amended version. Regarding amendments to the seabed parts of the
Convention, once the United States takes its permanent seat at the
International Seabed Authority it will have a veto over any amendments
related to that part.
Second, the United States cannot currently participate in the
Commission on the Limits of the Continental Shelf (CLCS) which oversees
ocean delineation on the outer limits of the Extended Continental Shelf
(Outer Continental Shelf). Even though it is collecting scientific
evidence to support eventual claims off its Atlantic, Gulf, and Alaskan
coasts, the United States, without becoming party to the Convention,
has no standing in the CLCS.
This not only precludes it from making a submission claiming the
sovereign rights over the resources of potentially more than 1 million
square kilometers of the OCS, it also denies the United States any
right to review or contest other claims that appear to be overly
expansive. This is becoming especially urgent with each passing year as
the Commission is reviewing an influx of claims.
Third, and especially acute as it relates to current tensions in
the Persian Gulf or naval mobility in the Pacific, the United States
today forfeits legal authority to other states, some of them less than
friendly to U.S. interests, that seek to restrict rights enshrined in
the Law of the Sea central to American national security strategy, such
as the freedom of navigation.
Relatedly, the United States also puts its sailors in unneeded
jeopardy when carrying out the Freedom of Navigation (FON) program to
contest Law of the Sea abuses.
Fourth, the United States is limited in its leadership ability to
act within the Convention to help mitigate maritime disputes between
strategic allies, such as Japan and Korea, and in strategically
important regions, such as the Gulf of Aden or the South China Sea.
Fifth, the United States is frustrated in expanding the
Proliferation Security Initiative (PSI) and gaining greater cooperation
in counterpiracy, counternarcotics, and counterterrorism operations at
sea. Although our allies are supportive of our efforts on these fronts,
they understandably indicate that U.S. refusal to join the Convention
has eroded their confidence that the United States will abide by
international law when conducting interdiction activities.
Sixth, U.S. firms and citizens cannot take advantage of the
arbitration processes established within the Convention to defend their
rights against foreign encroachment or abuse.
Seventh, the United States is unable to nominate a candidate for
election to the Law of the Sea Tribunal and thus is deprived of the
opportunity to shape directly the interpretation and application of the
Convention.
Eighth, American energy and deep seabed companies are at a
disadvantage in making investments in the OCS due to the legal
uncertainty over the outer limit of the U.S. Continental Shelf, nor can
they obtain international recognition, and, as a result, financing for
mine sites or title to recovered minerals on the deep seabed beyond
national jurisdiction. As a result, our once-lead in ocean technologies
has atrophied and we have now fallen behind other countries in critical
areas such as deep seabed mining.
Potential U.S. developers of deep seabed minerals are falling
farther and farther behind international competitors for deep seabed
minerals. While lack of international recognition of U.S. claims to
areas beyond national jurisdiction is keeping the sole U.S. claimant on
shore, 17 countries have 12 approved mine site claims and five new
applications will be considered this summer at the annual session of
the International Seabed Authority. The U.K. and Belgium are joining
Germany, France, Japan, South Korea, India, China, and seven other
nations in commercial exploration of seabed critical and strategic
minerals while the United States watches from shore.
Ninth, and as referenced before, the United States is unable to
fill its permanent seat on the International Seabed Authority and
therefore is unable to influence this body's work overseeing minerals
development in the deep seabed beyond national jurisdiction.
Last, and really a point of clarification rather than a specific
cost, let me be clear as the first Director of National Intelligence
that joining the Convention in no way hinders our intelligence
gathering to include not impairing in anyway our submarine activities.
I would now like to focus specifically on the Arctic, a region of
particular interest to me, and how not being a state party to the
treaty is undermining our interests in this increasingly important
region of the world.
In 2008, I led a U.S. delegation to Ilulissat, Greenland, for an
international conference of Arctic Foreign Ministers to discuss
emerging regional issues. The United States is the only Arctic nation
not to have joined the treaty and our nonparty status diminished our
voice in this forum.
Furthermore, the United States is in a weaker legal position in the
opening of the Arctic to police new shipping along the Alaskan coast
such as greater regulatory authority afforded under article 234 and to
apply internationally developed rules and standards to foreign
shipping, to contest disputed boundary claims and to press our own
under article 76, and to challenge Canada's assertion that the
Northwest Passage falls within its internal waters.
Why is it imperative for the United States to join the Convention
now?
For starters, the United States would gain legal protection for its
sovereignty, sovereign rights and jurisdiction in offshore zones, the
freedom of maneuver and action for its military forces, protection for
economic, environmental, and marine research interests at sea while
seizing an extraordinary opportunity to restore the mantle of
international leadership on, over and under nearly three-quarters of
the earth.
U.S. firms would be able to obtain essential internationally
recognized exclusive rights to explore and exploit deposits of critical
and strategic minerals on the ocean floor beyond national jurisdiction
and secure recognized title to the recovered resources. The Convention,
as revised by the 1994 Agreement on Implementation, provides the
commercial regime needed for private industry in full compliance with
the criteria articulated in 1982 by President Reagan when he laid out
his conditions for a convention he would sign.
More difficult to measure than the tangible benefits gained from
U.S. accession is the diplomatic blight on America's reputation for
rejecting a carefully negotiated accord that enjoys overwhelming
international consensus and a treaty that was adjusted in unprecedented
fashion to specifically meet the demands put forth by President Reagan.
Remaining outside the Convention undermines U.S. credibility and limits
our ability to achieve critical national security objectives.
The treaty was negotiated over decades during which American
delegations scored important victories. To the dismay of the rest of
the world that negotiated the Convention with the United States in good
faith, after many years the Senate has yet to have an up-or-down vote.
In my opinion, this is a constitutional abdication of congressional
leadership.
Through inaction, the United States is forfeiting concrete
interests while simultaneously undermining something more intangible,
the legitimacy of U.S. leadership and its international reputation.
The United States should join the Law of the Sea Convention because
it remains committed to the rule of law and its historic role as an
architect and defender of a world order that benefits all nations,
including and especially the United States of America.
Thank you, and I look forward to responding to your questions and
expanding on any of the points in my testimony.

The Chairman. Thank you, Mr. Secretary.
Mr. Bellinger.

STATEMENT OF HON. JOHN B. BELLINGER III, FORMER LEGAL ADVISER,
U.S. DEPARTMENT OF STATE, PARTNER, ARNOLD & PORTER, LLP,
WASHINGTON, DC

Mr. Bellinger. Thank you, Mr. Chairman and Ranking Member
Lugar.
I don't go back quite as far with the treaty as either
Secretary Rumsfeld or Secretary Negroponte, although I have
spent a lot of time with both of them inside the White House.
As you mentioned, I served for all 8 years in the Bush
administration, first as the Legal Adviser for the National
Security Council in the White House for the first term and then
as the Legal Adviser for the State Department in the second
term.
What I can do is explain why during those 8 years the Bush
administration decided to support the Law of the Sea Convention
because I started from the beginning there. And I do, let me
say,
appreciate very much the concerns that have been raised about
the Convention, including by Senators on this committee,
because the Bush administration carefully looked at almost all
of these same issues before we ultimately decided to support
the treaty.
And let me say President Bush did not decide to support the
treaty out of a blind commitment to multilateralism. I don't
think anyone has ever accused the Bush administration of an
overabundance of enthusiasm for international organizations or
multilateral treaties.
When we came into office in 2001, we decided not to support
several of the treaties that had been supported by the Clinton
administration, including the Comprehensive Test Ban Treaty and
the Kyoto Protocol. Bush administration officials were
similarly skeptical about the Law of the Sea Treaty. We
remembered President Reagan's concerns.
But after a year-long interagency review, we concluded that
the Convention strongly advanced U.S. national security,
economic, and environmental interests. And in the
administration's first treaty priority list in February 2002,
we told this committee that there was ``an urgent need for
Senate approval of the Convention.''
We reviewed the serious concerns that President Reagan had
raised about the Convention in 1982. We concluded that these
concerns had been satisfactorily addressed by the amendments to
the Convention in 1994. The other Western countries that
President Reagan and Secretary Rumsfeld had successfully
persuaded not to sign the treaty, including Britain, Germany,
and Japan, had all joined the treaty after the treaty was
amended.
So between 2003 and 2009, senior Bush administration
political appointees from the Departments of Defense, State,
Commerce, Interior, Homeland Security testified and sent
letters to this committee and other committees strongly
endorsing the Convention. Defense Department appointees twice
testified in favor of the treaty. President Bush himself issued
statements in 2007 and 2009, urging the Senate to approve the
Convention.
Let me end by addressing some of the concerns that have
been raised because we did address some of those same concerns.
First, reliance on customary international law alone does not
give the United States important rights that are available only
to parties of the Convention. Most important, U.S. companies
would not have the legal certainty that they need before they
are willing to invest billions in development in the Arctic or
the deep seabed.
By not joining the Convention, the U.S. Government is
preventing U.S. oil, gas, and mining companies from making
investments that could produce enormous wealth and jobs for the
U.S. economy. Moreover, the United States would not be able to
take its permanent seat on the Council of the International
Seabed, which is currently making decisions that affect U.S.
interests.
Second, the United States would only be required to pay
royalties to the Deep Seabed Authority if it were actually
developing resources on the U.S. Extended Continental Shelf.
Moreover, U.S. oil and gas companies and the U.S. Treasury
would be able to keep 100 percent of the value of the
production at any site for the first 5 years and then between
99 and 93 percent of the value for the remaining years.
This would be an enormous net benefit, not a loss, for the
U.S. Treasury. If these fees would actually cause the economic
problems that are claimed by critics, then certainly other
major industrial countries would not have agreed to pay them.
Third, the seabed authority only has limited authority to
address mining activities on the deep seabed beyond the
jurisdiction of any country. It has no authority to regulate
activities in the world's oceans or on the U.S. Extended
Continental Shelf.
If critics are seriously concerned about the potential
actions of the ISA, then the most effective way to restrict its
activities would be for the United States to become party to
the Convention and take its permanent seat and effective veto
power on the ISA Council.
Finally, joining the Convention does not, in my view,
subject the United States to significant new environmental
litigation risks. In fact, the litigation risk to the United
States and U.S. companies would be much greater if U.S.
companies were to try to exploit the resources on the U.S.
Extended Continental Shelf or on the deep seabed contrary to
the terms of the Convention.
Mr. Chairman, through determined diplomacy, including by
Secretary Rumsfeld, the United States has been able to achieve
all of its important objectives in the original 1982 Law of the
Sea Convention and the 1994 amendments. After careful review,
the Bush administration concluded that the amended Convention
strongly serves U.S. military, economic, and environmental
interests. And we concluded that important U.S. objectives,
especially our goals to exploit the valuable resources on our
Extended Continental Shelf in the Arctic and on the deep seabed
and to participate in the Convention's decisionmaking bodies
could not be achieved through other means.
For these reasons, President Bush decided to support the
Law of the Sea Convention, and he urged the Senate to approve
it rapidly.
Mr. Chairman and members of the committee, thank you for
this opportunity to appear today.
[The prepared statement of Mr. Bellinger follows:]

Prepared Statement of John B. Bellinger III

Mr. Chairman, Ranking Member Lugar, thank you for inviting me to
appear before the committee today to discuss the Convention on the Law
of the Sea. My last appearance before this committee was at this
committee's last hearing on the Law of the Sea Convention in September
2007, when I appeared together with then-Deputy Secretary of State John
Negroponte and then-Deputy Secretary of Defense Gordon England to
support the Convention on behalf of the Bush administration.
I am now a partner in the international and national security law
practices at Arnold & Porter LLP and an Adjunct Senior Fellow in
International and National Security Law at the Council on Foreign
Relations. Although I am advising several clients on legal issues
relating to the Law of the Sea Convention, I am appearing today in my
personal capacity and not on behalf of any client.
I served for 8 years as a senior legal official in the
administration of President George W. Bush, and I was actively involved
in the administration's consideration of the Convention for all 8
years. During the first term, I served in the White House as Senior
Associate Counsel to the President and Legal Adviser to the National
Security Council from 2001-2005. I was in the White House Situation
Room on September 11. Although I spent the vast majority of my time in
this position focused on military, intelligence, and counterterrorism
issues, I was also responsible for coordinating the Bush
administration's treaty priorities and for reviewing all treaties
transmitted to the Senate by the President.
In the second term, I served as the Legal Adviser for the
Department of State from 2005-2009 under Secretary of State Condoleezza
Rice, after a confirmation hearing before this committee in March 2005
and confirmation by the full Senate in April 2005. As Legal Adviser, I
was the most senior international lawyer in the administration and was
responsible, among other duties, for the negotiation and legal
interpretation of treaties and for securing Senate approval and
Presidential ratification of treaties supported by the administration.
I also represented the United States before international tribunals.
Today, I would like to explain why the Bush administration decided,
after a careful review, to support the Law of the Sea Convention. I
will also address some of the concerns that have been raised by critics
of the Convention.
Let me emphasize at the outset that I very much appreciate many of
the concerns that have been raised about the Convention, including by
Senators on this committee. I watched this committee's hearing on May
23 and listened to the concerns that were raised. During the Bush
administration, we carefully examined many of these same issues before
allowing administration witnesses to testify in favor of the treaty
before this committee in 2003 and 2007. Although some of the criticisms
of the Convention are inaccurate or based on outdated information,
other criticisms raise legitimate concerns that the Bush administration
reviewed before we decided to support the Convention.
When the Bush administration came into office in January 2001, we
began a careful review of all of the treaties that had been submitted
to the Senate by the Clinton administration to determine which treaties
the Bush administration would support and would not support. The Bush
administration did not support all of the treaties that had been
supported by the prior administration. For example, the Bush
administration did not support the Comprehensive Nuclear Test Ban
Treaty, which had been strongly supported by the Clinton
administration. We did not support the Kyoto Protocol, which had been
signed by the Clinton administration. Many Bush administration
officials were similarly skeptical of the Law of the Sea Convention
because it was a multilateral treaty, and President Reagan had refused
to sign it. However, after a year-long interagency review, the Bush
administration concluded that the Convention was in the U.S. national
interest and decided strongly to endorse the treaty. In February 2002,
the administration submitted its first Treaty Priority List to this
committee and listed the Law of the Sea Convention as a treaty for
which there was an ``urgent need for Senate approval.''
Let me emphasize that the Bush administration did not decide to
support the Law of the Sea Convention out of a blind commitment to
multilateral treaties or international organizations. No one has ever
accused the Bush administration of an overabundance of enthusiasm for
the United Nations or multilateralism. Indeed, the Bush administration
was especially skeptical of the United Nations and many U.N. bodies,
such as the Human Rights Council. And the Bush administration was
especially committed to defending U.S. sovereignty and international
freedom of action, particularly after September 11.
The Bush administration decided to support the Law of the Sea
Convention and to provide senior administration officials to testify in
favor of the Convention only after weighing the Convention's benefits
against its risks. We ultimately concluded that, on balance, the treaty
was clearly in the U.S. national security, economic, and environmental
interests.
First and foremost, the Bush administration concluded that the
Convention was beneficial to the United States military, especially
during a time of armed conflict, because it provided clear treaty-based
navigational rights for our Navy, Coast Guard, and aircraft. This was
especially important for the Bush administration as we asked our
military to take on numerous new missions after the 9/11 attacks during
the Global War on Terrorism; several countries had challenged U.S.
military activities in their territorial waters, and the administration
concluded that it was vital to have a treaty-based legal right to
support our freedom of movement and activities. We also concluded that
joining the Convention would support our Proliferation Security
Initiative.
Second, the administration concluded that the Convention was in the
U.S. commercial and economic interests because it codified U.S. rights
to exploit the vast and valuable resources in the U.S. Exclusive
Economic Zone--the largest in the world--and on its substantial
Extended Continental Shelf (ECS), to lay and service submarine
telecommunications cables, and to engage in mining in the deep seabed
outside the sovereign jurisdiction of the United States. Later, as the
melting Arctic ice opened up new commercial opportunities on the U.S.
Extended Continental Shelf off of Alaska, the administration concluded
that codifying U.S. rights in the Arctic and participating on the
Continental Shelf Commission created by the Convention was even more
important than before.
Third, the administration concluded that joining the Convention
supported important U.S. environmental interests in the health of the
world's oceans and the living resources in them.
The Bush administration reviewed the specific concerns that
President Reagan had raised about the Convention, which focused on Part
XI of the Convention, regarding deep seabed mining. We concluded that
all of these concerns had been satisfactorily addressed by the
amendments made to the Convention in 1994. For example, the provisions
in the original Part XI requiring transfer of technology to less
developed countries or mandating limits on deep seabed mining based on
nonmarket factors had been eliminated. Moreover, the United States had
been given a permanent seat on the Council of the International Seabed
Authority and the power to veto all decisions of the International
Seabed Authority relating to budgetary or financial matters. During our
review, we noted that, in his January 1982 statement on ``U.S. Policy
and the Law of the Sea,'' President Reagan had stated that the ``The
United States remains committed to the multilateral treaty process for
reaching agreement on the law of the sea.'' President Reagan had said
that if U.S. concerns were addressed, ``my administration will support
ratification.''
We also noted that after 1994, all of the major industrialized
countries--including the United Kingdom, Japan, Italy and Germany--had
decided to join the Convention. These were the countries that had
followed President Reagan's lead and had refused to sign the 1982
Convention because they shared U.S. concerns about the Convention's
deep seabed mining provisions, but then concluded that the 1994
amendments had fixed the original problems with the treaty. China and
Russia--two members of the U.N. Security Council that also jealously
protect their sovereignty and freedom of action--had also joined the
Convention in 1996 and 1997, respectively.
As a result of its reviews of the Convention, the Bush
administration did identify several concerns. The administration
concluded, however, that these concerns could be adequately addressed
through declarations and understandings that could be included with the
Senate's Resolution of Advice and Consent to Ratification.
A broad array of senior Bush administration political appointees
from a variety of agencies testified in favor of the Convention, and
wrote letters supporting the Convention, between 2003 and 2009. In
October 2003, Assistant Secretary of State John Turner, Legal Adviser
William H. Taft IV, and Deputy Assistant Secretary of Defense Mark
Esper testified before this committee in favor of the treaty. Dr.
Esper, who had previously served as chief of staff at the Heritage
Foundation, testified on behalf of the Department of Defense that the
administration had ``undertaken a review of the Law of the Sea
Convention to ensure that it continues to meet U.S. needs in the
current national security environment.'' Dr. Esper testified that the
review ``did not reveal particular problems affecting current U.S.
operations.'' He stated that the administration ``supports accession to
the Convention because the Convention supports navigational rights
critical to military operations.''
Ambassador Taft testified on behalf of the Bush administration in
favor of the Convention on several additional occasions before other
Senate committees. Ambassador Taft had broad experience in defense
matters, having served previously as General Counsel of the Department
of Defense and later as Deputy Secretary of Defense and Acting
Secretary of Defense during the Reagan administration, and as
Ambassador to NATO in the administration of President George H.W. Bush.
In addition, in June 2004, the Senate Select Committee on
Intelligence held a closed hearing on the intelligence implications of
U.S. accession to the Convention. The Director of Naval Intelligence,
the Assistant Director of Central Intelligence for Collection, and
Ambassador Taft all expressed support for the Convention and stated
that the Convention would not affect the conduct of U.S. intelligence
activities.
In March 2004, this committee unanimously reported the Convention
with a recommendation that the full Senate vote on it promptly. The
full Senate, however, did not vote on the treaty in 2004.
In 2007, the Bush administration stepped up its efforts to urge the
Senate to approve the Convention. On February 8, 2007, then-Assistant
to the President for National Security Affairs, Stephen Hadley, wrote
to this committee to urge the Senate to approve the Convention ``as
early as possible in the 110th Congress.'' Mr. Hadley stated that ``As
the President believes, and many members of this administration and
others have stated, the Convention protects and advances the national
security, economic, and environmental interests of the United States.''
On May 15, 2007, President Bush himself issued a statement on
``Advancing U.S. Interests in the World's Oceans,'' in which he said
``I urge the Senate to act favorably on U.S. accession to the United
Nations Convention on the Law of the Sea Convention during this session
of Congress.''
In September 2007, senior administration witnesses again testified
before this committee in favor of the Convention. This time, Deputy
Secretary of State John Negroponte and Deputy Secretary of Defense (and
former Secretary of the Navy) Gordon England testified. Secretary
Negroponte had previously served as the Deputy National Security
Adviser during the Reagan administration. I joined Deputy Secretary
Negroponte, and Deputy Secretary England was joined by Admiral Patrick
Walsh, the Vice Chief of Naval Operations, and Admiral Bruce MacDonald,
the Judge Advocate General of the Navy.
Shortly before the hearing, on September 17, 2007, then-Governor of
Alaska Sarah Palin wrote to the committee to ``put my administration on
record in support of the Convention as the predicate for asserting
sovereign rights that will be of benefit to Alaska and the Nation.''
Governor Palin noted that Senate ``ratification has been thwarted by a
small group of Senators who are concerned about the perceived loss of
U.S. sovereignty. I believe that quite the contrary is true.''
Also before this committee's 2007 hearing, the Chairman of the
Senate Intelligence Committee, Jay Rockefeller, and Vice Chairman
Christopher Bond wrote a letter to this committee stating that ``we
concur in the assessment of the Intelligence Community, the Department
of Defense, and the Department of State that the Law of the Sea
Convention neither regulates intelligence activities nor subjects
disputes over intelligence activities to settlement procedures under
the Convention. It is therefore our judgment that accession to the
Convention will not adversely affect U.S. intelligence collection or
other intelligence activities.''
After the September 2007 hearing, Secretary of Homeland Security
Michael Chertoff, Secretary of the Interior Dirk Kempthorne, and
Secretary of Commerce Carlos Gutierrez all submitted letters to the
committee strongly endorsing the Convention.
In December 2007, this committee again favorably reported the
treaty to the full Senate, but the full Senate again did not act on the
treaty before the end of the 110th Congress.
The Bush administration, however, continued to support Senate
approval of
the treaty. On January 9, 2009, President Bush signed National Security
Presidential Directive 66, relating to ``Arctic Region Policy.'' In
this directive, President Bush again called on the Senate promptly to
act favorably on the Law of the Sea Convention.
I would now like to address some of the concerns that have been
raised by critics of the Law of the Sea Convention.
Reliance on Customary International Law. Some have suggested that
it is not necessary for the United States to join the Convention in
order to enjoy its benefits because the main provisions of the treaty
are now accepted as ``customary international law.'' According to this
argument, the United States can enjoy international freedom of
navigation and exploit the resources on the U.S. Extended Continental
Shelf and on the deep seabed, without having to assume any obligations
ourselves under the treaty, because these provisions have become
accepted as customary international law.
Reliance on customary international law to protect U.S. interests
is insufficient for many reasons:
First, asserting customary international law does not give the
United States important rights that are available only to parties to
the Convention. For example, the U.S. may not take our permanent seat
on the Council of the International Seabed Authority, or have a U.S.
national elected to the Continental Shelf Commission, unless we are
party to the Convention. These bodies are currently making important
decisions that affect our interests without our participation. For
example, the Continental Shelf Commission is reviewing the claims of
Russia and other Arctic coastal states to their Continental Shelves in
the Arctic, and we have no say in its decisions. Similarly, the Council
of the ISA is adopting rules relating to deep seabed mining without
U.S. input. And the U.S. may not sponsor U.S. companies, such as
Lockheed, to engage in mining on the deep seabed.
Second, it is not at all clear that all of the substantive
provisions of the Convention are, in fact, recognized as customary
international law. It could be extremely difficult for the U.S. to
establish that there was general agreement by countries around the
world that a country has a legal right to exploit the resources on its
Extended Continental Shelf or on the deep seabed, without joining the
Convention. Similarly, contrary to the claims of some, the U.S. does
not have a clear right to its Extended Continental Shelf under the 1958
Convention on the Continental Shelf; the lack of clarity in the 1958
Convention is a principal reason why President Nixon endorsed the
concept of a new Law of the Sea Convention.
Third, U.S. companies have been unwilling to begin costly
exploration and extraction activities in reliance on theoretical and
untested legal arguments that have not been accepted by other countries
and that are flatly contrary to the terms of Law of the Sea Convention.
Companies instead want the clear legal certainty provided by the
Convention before making investments that could run into the billions
of dollars. Critics of the Convention who are concerned about the
possibility of international litigation should be much more concerned
about the possibility of lawsuits against the United States or U.S.
companies if the United States were to engage in resource extraction on
the U.S. Extended Continental Shelf or on the deep seabed contrary to
the terms of the Convention, than about possible environmental claims
against the United States if the U.S. were to join the Convention.
Moreover, a U.S. company that initiates deep seabed mining outside the
Convention risks having a foreign company sponsored by a country that
is party to the Convention jump on its claim after it has proven to be
profitable. No U.S. company would want to take that legal risk.
Fourth, relying on customary international law does not guarantee
that even the benefits we do currently enjoy are secure over the long
term. Customary international law is not the most solid basis upon
which to protect and assert U.S. navigational and economic rights. It
is not universally accepted and may change over time based on State
practice. We therefore cannot assume that customary law will always
continue to mirror the Convention, and we need to lock in the
Convention's rights as a matter of treaty law. Indeed, it is surprising
that opponents of the Convention who are usually critical of the
haziness and unpredictability of ``customary international law'' should
urge the U.S. military and U.S. businesses to rely on it to protect
their essential interests.
U.N. ``Taxes''/Royalty Payments. Some have objected that the U.S.
would be obligated to pay fees to the International Seabed Authority--
which some have inaccurately called ``U.N. taxes''--if the U.S. were to
join the Convention and allow resource development on its Extended
Continental Shelf. Some have suggested that these fees could result in
the loss of billions of dollars to the U.S. Treasury. The Bush
administration carefully considered these concerns and concluded that
the licensing and fee structure established by the Convention was
acceptable.
First, the fees are minimal in comparison to the enormous economic
value that would be received, and the jobs that would be created, by
the United States if its industry were to engage in oil, gas, and
mineral development on the U.S. Extended Continental Shelf in the
Arctic. The U.S. would be required to make no payments for the first 5
years of production at any site, and then to pay a fee of 1 percent per
year starting in year 6, up to a maximum of 7 percent in year 12.
Assuming the U.S. Government imposed, for example, a royalty fee of
approximately 18 percent on the value of production on the U.S.
Extended Continental Shelf, that would be 18 percent more than the U.S.
would gain if we stayed outside the Convention. In other words, joining
the Convention would attract substantial investment, and produce
substantial revenues for the Treasury, that would not otherwise be
produced. So, even when the Convention payment is at its highest rate
of 7 percent, the U.S. Treasury would still be 11 percent better off
with respect to each production site than it would be if the U.S. does
not join the Convention. This would be an enormous benefit--not a
loss--to the U.S. budget.
Second, these fees would only have to be paid by the United States
if there is actually production on the U.S. Extended Continental Shelf.
Third, these fees were negotiated by U.S. negotiators in
consultation with experts from the U.S. oil and gas industry, who
deemed them to be acceptable.
Fourth, all of the Western industrialized countries, including our
major allies, as well as Russia and China, have concluded that these
fees are acceptable and have joined the treaty. If these fees would
actually cause the economic woes claimed by critics, then certainly
these other countries would not have been willing to agree to pay them.
Instead, most of these countries are already busily surveying and
staking claims to their Extended Continental Shelves so that their oil,
gas, and mining companies can exploit these resources. For example,
Norway--which already has a sovereign wealth fund worth $700 billion,
all of which has been derived from Arctic oil and gas profits--is
preparing to make a claim to the oil and gas on its Extended
Continental Shelf in the Arctic. Russia, Canada, and Denmark are all
preparing to make similar claims in the Arctic using the provisions of
the Convention, and they have agreed to pay royalties if they exploit
the resources on their Extended Continental Shelves.
Finally, royalty fees would not be paid to the United Nations. They
would be paid through the International Seabed Authority, and back to
the Parties to the Convention under a distribution formula developed by
the Seabed Authority's Council, where the U.S. would have a permanent
seat and a decisive voice on how fees would be spent.
International Seabed Authority. Some have objected to the creation
of, or to having the U.S. join, the International Seabed Authority
created by the Convention. Critics claim that the ISA is a large U.N.
bureaucracy that is hostile to American interests, that includes
undemocratic governments, that would regulate U.S. activities over or
under the world's oceans, and that would distribute money to rogue
regimes. These claims are inaccurate or exaggerated.
First, the ISA is not part of the United Nations. It is an
independent body that is not part of the U.N. Moreover, the ISA is very
small. It has fewer than 50 employees.
Second, the ISA has already been in operation for 18 years. The
United States cannot prevent its coming into existence or its
operations by not joining the Convention.
Third, the U.S. is guaranteed a permanent seat on the Council of
the ISA, with veto power over financial and substantive decisions of
the ISA, but only if the U.S. joins the Convention. If critics are
concerned about the potential actions of the ISA (including the
potential distribution of fees to rogue states), the most effective way
to restrict its activities would be for the U.S. to become party to the
Convention and to exercise its veto rights over Council decisions.
Indeed, if Russia, China, and other countries begin to pay fees to the
ISA, the U.S. would be able to affect how these fees are distributed if
it takes its guaranteed seat on the ISA Council.
Fourth, the ISA has authority only to regulate mining activities on
the deep seabed beyond the jurisdiction of any country. It has no
authority to regulate activities on the deep seabed unrelated to
mining, or with respect to resource development on the Continental
Shelf of the U.S. or other countries. Nor does the ISA have authority
over activities of the United States or other countries in the world's
oceans.
Finally, while the United States participates in numerous
international organizations in which undemocratic countries are also
members and even hold leadership positions, the International Seabed
Authority is the only international organization where the U.S. alone
is given a permanent seat and veto authority over its activities.
Environmental Obligations/Environmental Disputes. Some have argued
that the Convention might obligate the U.S. to comply with
international environmental agreements (such as the Kyoto Protocol) to
which the U.S. is not a party, or subject the U.S. to mandatory dispute
resolution for marine pollution (such as atmospheric pollution or
pollution from land-based sources). I share the concerns of some
critics of the Convention about the goals of some groups to embroil the
U.S. in international litigation. As the State Department Legal Adviser
during the Bush administration, I witnessed first-hand the efforts of
many groups hostile to U.S. counterterrorism actions to wage
``lawfare'' against the United States. In my view, however, joining the
Law of the Sea Convention does not subject the United States to
significant new legal risks, especially when compared to the benefits
of joining the Convention.
The terms of the Convention do not require Parties to comply with
other international environmental treaties. With respect to land-based
sources and pollution through the atmosphere, Part XII, Section 5 of
the Convention requires Parties at most to adopt laws and regulations
to prevent, reduce and control marine pollution, but in doing so,
parties are required only to ``tak[e] into account internationally
agreed rules, standards and recommended practices and procedures.''
This does not impose an obligation to comply with Kyoto or any other
environmental treaty or standard, including treaties to which the U.S.
is not a party.
In addition, the U.S. would not be subject to dispute resolution
for allegedly violating the Kyoto protocol or any other environmental
treaty, including agreements governing pollution from land-based
sources. The Convention's dispute settlement system applies only to
disputes ``concerning the interpretation or application'' of the
Convention itself, not to the alleged violation of other treaties.
Articles 297 and 298 of the Convention further exclude certain
potentially sensitive disputes from dispute settlement.
Finally, as I have noted previously, those who are rightly
concerned about international litigation against the United States
should be much more concerned about subjecting the United States and
U.S. businesses to international claims if the United States were to
try to claim the resources on its Extended Continental Shelf or on the
deep seabed without becoming party to the Law of the Sea Convention. In
my view, the risk of environmental litigation against the United States
if it joins the Convention is low. The risk of international litigation
against the United States if it were unilaterally to claim the
resources on its Extended Continental Shelf or on the deep seabed,
without becoming party to the Convention, is much higher.
In closing, I want to focus on the bigger picture. In deciding
whether to accede to the Law of the Sea Convention, as with any treaty,
the question for the President and the Senate is whether the treaty, on
balance, is in the national interest of the United States. Do the
advantages of the treaty outweigh its disadvantages? Can the
disadvantages or risks be mitigated? Can the United States achieve its
objectives in other ways?
No treaty the United States has ever joined has been 100 percent
perfect from our point of view. And yet the U.S. Senate has approved
and the United States has become party to thousands of treaties,
including hundreds of multilateral treaties, over its history, which
have benefited the United States greatly. Many of these treaties have
required the United States to give up theoretical rights that we might
otherwise have tried to assert, in order to persuade other countries to
do the same. Many of these treaties have dispute resolution mechanisms
in which the dispute bodies can rule, and even have ruled, against the
United States, but they have also ruled in favor of the United States.
This is all in the nature of treaties. Over the course of our history,
numerous Presidents and Senators have concluded that entering into
treaties with other countries is not a sign of weakness, but rather the
most effective way for the United States to get other countries to do
what we want them to do.
Through dogged diplomacy and the insistence of President Reagan,
the United States has been able to achieve all of its important
objectives in the original 1982 Convention and the 1994 amendments. The
Bush administration concluded that the Convention, as amended, strongly
serves U.S. military, economic and commercial, and environmental
interests. We concluded that the concerns we did identify with the
Convention could be addressed in our instrument of ratification. And we
concluded that important U.S. objectives--especially our goals to
develop the valuable resources on our Extended Continental Shelf in the
Arctic and on the deep seabed and to participate in the Convention's
decisionmaking bodies--could not be achieved through other means, for
example, through reliance on customary international law alone. For
these reasons, President Bush decided to support the Law of the Sea
Convention and urged the Senate to approve it rapidly.
Mr. Chairman and members of the committee, thank you for this
opportunity to appear before you today.

The Chairman. Thank you very much, Secretary Bellinger.
Mr. Groves.

STATEMENT OF STEVEN GROVES, BERNARD AND BARBARA LOMAS FELLOW,
THE HERITAGE FOUNDATION, WASHINGTON, DC

Mr. Groves. Thank you, Mr. Chairman, for inviting me to
testify this afternoon regarding U.S. accession to the United
Nations Convention on the Law of the Sea.
At a recent hearing, a prominent treaty proponent stated
that opposition to UNCLOS is based on mythology and ideology.
At the outset, allow me to ensure you that my concerns and the
concerns of many others are not based in mythology or on strict
adherence to ideology without regard for facts or evidence.
To the extent that treaty skeptics base their opposition on
ideology, it is an ideology that places the protection of
American sovereignty over the advancement of narrow commercial
interests and over a misplaced desire to please the
international community. Joining UNCLOS would affect our
sovereignty and national interests in several ways.
It would expose the United States to adverse judgments from
international tribunals from which there are no appeals. It
would obligate the United States to make an open-ended
commitment to transfer an incalculable amount of royalty
revenue to an international organization for redistribution to
the developing world. And it would require the United States to
seek permission to mine the deep seabed from a council of
foreign countries that includes Sudan.
Ceding American sovereignty should not be done lightly
since it was achieved and has been preserved through great
sacrifice. When the Founding Fathers wrested sovereignty away
from Great Britain and declared our independence, they stated
their reasons for doing so. Among those reasons were the
imposition of taxes from afar and for transporting us beyond
the seas to be tried for pretended offenses.
More than 230 years later, the Senate is considering a
treaty that would siphon off royalty revenue that belongs to
the American people, but instead will be remitted to Kingston,
Jamaica, to be spent in other countries. The treaty would also
transport the United States to tribunals in Germany and the
Netherlands to answer for pretended offenses.
The Founders had a deep respect for the law of nations and
for the opinions of mankind, but I doubt that they could fathom
that the United States would subject itself to such an
arrangement.
But opposition to UNCLOS is, of course, based on more than
ideology. Our skepticism is based on the available evidence,
longstanding U.S. law and policy, customary international law,
U.S. experiences in other international organizations, U.S.
experiences in international tribunals, the provisions of the
Convention itself, and, of course, the facts.
First, in regard to navigational rights and freedoms, we
know the following facts. For more than 230 years, the U.S.
Navy has successfully protected our maritime interests,
regardless of the fact that the United States has not joined
the Convention.
The Navy has never been successfully denied access to any
international strait, archipelagic water, or territorial sea.
Indeed, at the hearing on May 23, General Dempsey, the Chairman
of the Joint Chiefs of Staff, admitted that failure to join
UNCLOS would not compromise our ability to project force around
the world.
In regard to developing the resources of the Extended
Continental Shelf, we know the following facts. The United
States currently exercises full jurisdiction and control over
its Extended Continental Shelf and has successfully demarcated
its limits in the Gulf of Mexico and the Arctic Ocean through
treaties with Mexico and Russia.
Since August 2001, the United States has leased blocks of
the Extended Continental Shelf in the Gulf of Mexico for
development to United States companies, such as Chevron, as
well as companies from Brazil, Denmark, France, Italy, Norway,
and the United Kingdom.
Regarding the transfer of royalties to the International
Seabed Authority under article 82, we know the following facts.
This committee cannot know the amount of royalty revenue that
the U.S. Treasury will forgo because no study has been
conducted to determine the value of the hydrocarbon resources
of the vast U.S. Extended Continental Shelf.
As such, if the United States accedes to the Convention, it
will be making an open-ended commitment to transfer an
incalculable sum of royalty revenue to the authority for
redistribution to developing and landlocked countries.
Regarding the Convention's mandatory dispute resolution
provisions, we know the following facts. That acceding to
UNCLOS would expose the United States to baseless international
lawsuits. That environmental activists, legal academics, and at
least one member of the Convention have contemplated initiating
climate change litigation against the United States. And that
adverse judgments issued by UNCLOS tribunals are final, not
subject to appeal, and are enforceable in the United States.
Finally, in regard to U.S. rights to mine the deep seabed,
we know the following facts. That pursuant to U.S. law,
longstanding U.S. policy, and customary international law, U.S.
persons and corporations have the right to explore and exploit
the deep seabed, regardless of whether or not the United States
is a party to UNCLOS.
These are the facts. And collectively, they indicate that
there are real costs and foreseeable risks that the United
States will undertake if it joins the Convention.
Now, proponents of accession claim that there are no costs
whatsoever, that the United States will only enjoy benefits
from membership, and that if only the United States would join
the Convention, everything would work out just fine. In light
of the facts, I believe that it is the proponents' claims that
are based in mythology and on blind faith.
Thank you again, Mr. Chairman, for inviting me to testify
today, and I look forward to any questions that you have.
[The prepared statement of Mr. Groves follows:]

Prepared statement of Steven Groves

Mr. Chairman and members of the committee, thank you for inviting
me to testify before you today regarding the United Nations Convention
on the Law of the Sea (UNCLOS).
UNCLOS, like any complex treaty or piece of legislation, should be
thoroughly examined by the Committee to determine its costs as well as
its benefits. At bottom, the disagreement between those who favor U.S.
accession to the Convention and those who oppose boils down to a
disagreement regarding whether the benefits of membership are
outweighed by the costs.
By its nature, no treaty comes without costs. As with comprehensive
legislation, there are often provisions of a treaty that are
uncontroversial and attractive in themselves. Likewise, there are other
provisions that are controversial and divisive. This rule generally
holds true for all treaties, including those involving arms control,
human rights, the environment, international courts, and others. UNCLOS
is no exception.
However, unlike most other treaties, the terms of UNCLOS prevent
the United States from exempting itself from its more controversial
provisions. Specifically, pursuant to article 309, UNCLOS forbids
states parties from submitting reservations or exceptions that would
otherwise allow the United States to disregard provisions that do not
comport with the U.S. Constitution or longstanding U.S. law and policy.
My testimony today focuses on the costs associated with U.S.
accession to UNCLOS and whether the benefits of accession are such that
the costs are outweighed. The costs of accession are not imaginary. Nor
is opposition to U.S. accession based on purist ideology, but rather on
the available evidence, current U.S. law and policy, customary
international law, U.S. experience in other international
organizations, the U.S. record in international tribunals, and of
course the provisions of the convention itself.
In summary:

If the U.S. accedes to UNCLOS, it will be required by
article 82 to transfer royalties generated from hydrocarbon
production of the U.S. ``Extended Continental Shelf'' (ECS) to
the International Seabed Authority for redistribution to
developing and landlocked countries. Since the value of the
hydrocarbon resources lying beneath the U.S. ECS may be worth
trillions of dollars, the amount of royalties that the U.S.
Treasury would be required to transfer to the Authority would
be substantial. In any event, U.S. accession would amount to an
open-ended commitment to forgo an incalculable amount of
royalty revenue for no appreciable benefit.
U.S. accession to UNCLOS is not necessary to develop or
secure title to the hydrocarbon resources of the ECS. Under
international law and longstanding U.S. policy and practice,
the U.S. has established full jurisdiction and control over its
ECS and is in the process of delimiting its ECS boundaries on a
worldwide basis. The successful delimitation of areas of U.S.
ECS and subsequent leasing of those areas in the Gulf of Mexico
to U.S. and foreign oil exploration companies demonstrate that
the United States does not need to achieve universal
international recognition of its ECS to provide ``certainty''
to oil exploration companies.
Proponents of U.S. accession to UNCLOS contend that by
failing to join the Convention the United States is forbidden
from mining the deep seabed--the ocean floor lying beyond the
ECS and designated as ``the Area.'' However, no legal barriers
prevent U.S. access, exploration, and exploitation of the
resources of the deep seabed. The United States has long held
that U.S. corporations and citizens have the right to develop
the resources of the deep seabed and may do so whether or not
the United States accedes to UNCLOS.
U.S. accession to UNCLOS would expose the U.S. to lawsuits
regarding virtually any maritime activity, such as alleged
pollution of the marine environment from a land-based source or
through the atmosphere. Regardless of the lack of merits of
such a case, the U.S. would be forced to defend itself against
every such lawsuit at great expense to U.S. taxpayers. Any
adverse judgment rendered by an UNCLOS tribunal would be final,
could not be appealed, and would be enforceable in U.S.
territory.
Finally, it is not essential or even necessary for the
United States to accede to UNCLOS to protect and preserve its
navigational rights and freedoms. The navigational and maritime
boundary provisions of the Convention either codify customary
international law that existed well before the Convention was
adopted in 1982 or ``refine and elaborate'' navigational rights
and regimes that are now widely accepted as binding
international law.

ARTICLE 82 AND THE COSTS OF COMPLIANCE

Proponents of U.S. accession to UNCLOS extol the supposed benefits
of joining the Convention but are reluctant to discuss its very real
costs.
One area where the U.S. can expect to experience significant
costs--with no appreciable benefit--is in its compliance with article
82 of the Convention: ``Payments and contributions with respect to the
exploitation of the Continental Shelf beyond 200 nautical miles.''
If the U.S. accedes to UNCLOS, it will be required pursuant to
article 82 to transfer royalties generated on the U.S. Continental
Shelf beyond 200 nautical miles (nm)--an area known as the ``Extended
Continental Shelf'' (ECS)--to the International Seabed Authority. These
royalties will likely total tens or even hundreds of billions of
dollars over time. Instead of benefiting the American people, the
royalties will be distributed by the Authority to developing and
landlocked nations, including some that are corrupt, undemocratic, or
even state sponsors of terrorism such as Cuba and Sudan.
Article 82 of UNCLOS requires member states to ``share'' a portion
of their royalty revenue for all oil, gas, or other mineral resources
extracted from the ECS:

The coastal State shall make payments or contributions in
kind in respect of the exploitation of the nonliving resources
of the Continental Shelf beyond 200 nautical miles from the
baselines from which the breadth of the territorial sea is
measured.

These payments are to be made to the Authority on an annual basis
by the states parties, and are based on the value of production at the
particular site--in most cases, an offshore drilling platform
extracting oil or natural gas from the ECS. According to a recent study
conducted for the Authority, such payments are considered
``international royalties.''
The potential size of the U.S. ECS worldwide is significant. The
value of the hydrocarbon deposits lying beneath the U.S. ECS is
difficult to estimate, but it is likely substantial. According to the
U.S. Extended Continental Shelf Task Force, ``Given the size of the
U.S. Continental Shelf, the resources we might find there may be worth
many billions if not trillions of dollars.''
Member states begin to pay these ``international royalties'' during
the 6th year of production at the drilling site. Starting with the 6th
year of production, UNCLOS members must pay 1 percent of the value of
the total production at that site to the Authority. Thereafter, the
royalty rate increases in increments of 1 percentage point per year
until the 12th year of production, when it reaches 7 percent. The rate
remains at 7 percent until production ceases at the site.
As such, if the United States accedes to UNCLOS it would be
obligated to transfer to the Authority a considerable portion of the
royalties generated on the U.S. ECS that would otherwise be deposited
in the U.S. Treasury for the benefit of the American people. For
example, the royalty rate of the majority of blocks currently under an
active lease on the U.S. ECS is 12.5 percent. Beginning in the 12th
year of production on such an ECS block the U.S. would be required to
transfer 7 percent--more than half--of its royalty revenue to the
Authority and do so each year until production ends on that lease. The
remaining 5.5 percent of the royalty would be retained by the Treasury.
Given that resources of the U.S. ECS ``may be worth many billions
if not trillions of dollars,'' this would amount to a substantial sum
over time.

But there is the rub. There has been no comprehensive study to
determine the value of the oil and natural gas that lies beneath the
U.S. ECS. The total area of the U.S. ECS is reportedly twice the size
of California and stretches from the U.S. east coast to the South
Pacific and up to the Arctic Ocean. How can this committee be expected
to conduct a proper assessment of the financial impact of U.S.
accession to UNCLOS if the value of the natural resources on the U.S.
ECS is unknown? If the value of U.S. hydrocarbons on the ECS is unknown
then so too is the amount of royalty revenue that the United States
will ultimately forgo if it accedes to the Convention.
As such, by acceding to UNCLOS the United States will be making an
open-ended international commitment to transfer an indefinite sum of
royalty revenue (indefinite, but likely in the tens if not hundreds of
billions of dollars) to the Authority for redistribution to developing
and landlocked nations.

DETERMINING THE EXTENT OF THE U.S. EXTENDED CONTINENTAL SHELF

Some proponents of U.S. accession to UNCLOS claim that U.S. oil
companies cannot achieve the ``certainty'' they require to develop the
hydrocarbon resources on the ECS unless the United States accedes to
the Convention and receives the approval of the Commission on the
Limits of the Continental Shelf--an international committee of
geologists and hydrographers located at U.N. headquarters in New York
City. For example, in 2007, former Deputy Secretary of State John
Negroponte stated, ``In the absence of such international recognition
and legal certainty, U.S. companies are unlikely to secure the
necessary financing and insurance to exploit energy resources on the
extended shelf.''
However, pursuant to longstanding law and policy the United States
already enjoys and exercises full jurisdiction and control over its
ECS. In addition to the 1945 Truman Proclamation, in which President
Harry S Truman declared that the United States ``regards the natural
resources of the subsoil and seabed of the Continental Shelf beneath
the high seas but contiguous to the coasts of the United States as
appertaining to the United States, subject to its jurisdiction and
control,'' in 1953 Congress passed the Outer Continental Shelf Lands
Act, which defined the outer Continental Shelf as ``all submerged lands
lying seaward and outside of the area of lands beneath navigable waters
. . . and of which the subsoil and seabed appertain to the United
States and are subject to its jurisdiction and control.''
After the adoption of UNCLOS in 1982, the U.S. affirmed its
jurisdiction over its entire Continental Shelf, including the ECS.
Specifically, in November 1987 a U.S. Government interagency group
issued a policy statement declaring its intent to delimit the U.S. ECS
in conformity with article 76 of UNCLOS (which provides a formula for
measuring the extent of a coastal state's ECS). That statement read, in
pertinent part, ``The United States has exercised and shall continue to
exercise jurisdiction over its Continental Shelf in accordance with and
to the full extent permitted by international law as reflected in
Article 76, paragraphs (1), (2) and (3).''
Indeed, the United States has already demarcated areas of its ECS
in the Gulf of Mexico, the Bering Sea, and the Arctic Ocean via
bilateral treaties with Mexico and Russia. In the Gulf, for example,
the U.S. and Mexico have negotiated a series of treaties to delimit
their maritime and Continental Shelf boundaries, including areas of
abutting ECS:

In November 1970, the U.S. and Mexico signed a treaty to
maintain the Rio Grande and Colorado River as the agreed
international boundary between the two nations. As part of the
treaty, the two nations demarcated their maritime boundaries in
the Gulf of Mexico and the Pacific Ocean out to 12 nm.
In May 1978, building on the 1970 treaty, the two nations
signed a treaty delimiting their maritime boundaries in the
Gulf and in the Pacific out to 200 nm. The treaty demarcated
boundary lines in the Gulf where their respective 200 nm
Exclusive Economic Zones (EEZ) abutted, leaving a ``doughnut
hole'' of approximately 5,092 square nm (now known as the
``western gap'') where their 200 nm boundary lines did not
meet. A second doughnut hole was created in the eastern Gulf
where the EEZ of the U.S., Mexico, and Cuba fail to intersect
(the ``eastern gap'').
In June 2000, the U.S. and Mexico signed a treaty dividing
the area of ECS within the western gap. Of the 5,092 square nm
of ECS in the western gap, 1,913 (38 percent) went to the
United States and 3,179 (62 percent) went to Mexico. The treaty
established a drilling moratorium over a narrow strip along the
boundary within the western gap due to the possibility that
transboundary hydrocarbon reservoirs are located along the
boundary.
In February 2012, the U.S. and Mexico signed a treaty
regarding the exploitation of transboundary reservoirs located
along the Continental Shelf boundary shared by the two nations
in the Gulf, including along the ECS boundary within the
western gap. The treaty has not yet been transmitted to the
U.S. Senate for its advice and consent.

Collectively, these treaties between the United States and Mexico,
particularly the June 2000 ECS delimitation treaty, demarcated an area
of U.S. ECS--the 1,913 square nm of submerged Continental Shelf in the
northern portion of the western gap. There is no evidence that the
``international community'' does not, or will not, recognize the ECS in
the northern portion of the western gap and its resources as being
subject to the jurisdiction and control of the United States.

The United States exercises jurisdiction and control over its ECS
as evidenced by the fact that the Department of the Interior has made
the western gap in the Gulf of Mexico available for hydrocarbon
development since August 2001. Specifically, the Bureau of Ocean Energy
Management (BOEM) offered the northern portion of the western gap for
lease almost immediately after the 2000 U.S.-Mexico ECS delimitation
treaty was ratified. That treaty entered into force on January 17,
2001. Seven months later, on August 22, BOEM offered the area of U.S.
ECS in the western gap in Lease Sale 180. In that lease sale, three
U.S. companies (Texaco, Hess, and Burlington Resources Offshore) and
one foreign company (Petrobras) submitted bids totaling more than $2
million for seven lease blocks in the western gap.
BOEM has offered western gap ECS blocks in 19 lease sales between
2001 and 2010. Seven U.S. companies (Burlington, Chevron, Devon Energy,
Hess, Mariner Energy, NARCA Corporation, and Texaco) submitted bids to
lease ECS blocks in the western gap. Five foreign companies--BP, Eni
Petroleum (Italy), Maersk Oil (Denmark), Petrobras, and Total
(France)--also bid on western gap ECS blocks during those sales. BOEM
collected more than $47 million in bonus bids in connection with lease
sales on those ECS blocks. Of the approximate 320 blocks located in
whole or in part on the western gap ECS, 65 (approximately 20 percent)
are currently held under active leases by nine U.S. and foreign oil
exploration companies.

The successful delimitation and subsequent leasing of ECS areas in
the Gulf of Mexico demonstrate that the United States does not need to
achieve universal international recognition of its ECS. The United
States identified and demarcated areas of ECS in the western gap in
cooperation with the only other relevant nation, Mexico, and that area
was subsequently offered for development to U.S. and foreign oil and
gas companies. All of this was achieved without U.S. accession to
UNCLOS or the approval of the Commission on the Limits of the
Continental Shelf.
Even though approximately 20 percent of the only area of U.S. ECS
that has been made available for lease by BOEM is currently under an
active lease, the U.S. oil and gas industry has supported and will
likely continue to support U.S. accession to UNCLOS in order to achieve
even greater ``certainty.'' That is their prerogative, of course, and
achieving a maximum amount of certainty is a legitimate and desirable
goal for a capital-intensive commercial enterprise. However, the
successful delimitation of the ECS in the western gap and the U.S.
Government's continuing lease sales of ECS blocks would appear to have
provided the certainty necessary for several major U.S. and foreign oil
exploration companies to secure leases for the development of the U.S.
ECS.

U.S. RIGHTS TO DEEP SEABED MINERALS

Proponents of U.S. accession to UNCLOS contend that by failing to
join the Convention the United States is forbidden from mining the deep
seabed--the ocean floor lying beyond the ECS and designated as ``the
Area.'' However, no legal barriers block U.S. access, exploration, and
exploitation of the resources of the deep seabed. The United States has
long held that U.S. corporations and citizens have the right to explore
and exploit the resources of the deep seabed and may do so whether or
not the United States accedes to UNCLOS.
The United States made its position on its right to engage in deep
seabed mining very clear in March 1983 during the final days of the
Third U.N. Conference on the Law of the Sea. Specifically, in response
to statements from other U.N. member states that UNCLOS nonparties
would not have the right to engage in deep seabed mining, the U.S.
stated the following:

Some speakers asserted that existing principles of
international law, or the Convention, prohibit any State,
including a nonparty, from exploring for and exploiting the
mineral resources of the deep sea-bed except in accordance with
the Convention. The United States does not believe that such
assertions have any merit. The deep sea-bed mining regime of
the Convention adopted by the Conference is purely contractual
in character. The United States and other nonparties do not
incur the obligations provided for therein to which they
object.
Article 137 of the Convention [forbidding claims of
sovereignty over the deep sea-bed or its resources] may not as
a matter of law prohibit sea-bed mining activities by
nonparties to the Convention; nor may it relieve a party from
the duty to respect the exercise of high seas freedoms,
including the exploration for and exploitation of deep sea-bed
minerals, by nonparties. Mining of the sea-bed is a lawful use
of the high seas open to all States . . . . The practice of the
United States and the other States principally interested in
sea-bed mining makes it clear that sea-bed mining continues to
be a lawful use of the high seas within the traditional meaning
of the freedom of the high seas.

The U.S. legal position set forth in 1983 on deep seabed mining
remains the same today. According to the ``Restatement of the Law,
Third, of the Foreign Relations Law of the United States,'' the United
States may engage in deep seabed mining activities even if it does not
accede to UNCLOS, provided that such activities are conducted without
claiming sovereignty over any part of the deep seabed and as long as
the mining activities are conducted with due regard to the rights of
other nations to engage in mining. As related by the Restatement,
``like the fish of the high seas the minerals of the deep sea-bed are
open to anyone to take.''
The U.S. position is also reflected in the Deep Seabed Hard Mineral
Resources Act of 1980, which Congress enacted 2 years before the
adoption of UNCLOS to provide a framework for U.S. corporations to
conduct deep seabed mining until such time as the United States joins
an acceptable convention on the law of the sea. The DSHMRA states the
U.S. position on the legality of deep seabed mining as follows:

[I]t is the legal opinion of the United States that exploration
for and commercial recovery of hard mineral resources of the
deep seabed are freedoms of the high seas subject to a duty of
reasonable regard to the interests of other states in their
exercise of those and other freedoms recognized by general
principles of international law.

In sum, the long-held position of the United States, both
domestically and internationally, is that U.S. citizens and
corporations have the right to explore and exploit the deep seabed
regardless of whether or not the United States is a party to UNCLOS.
exposure to baseless international lawsuits
``The possibility that a small island state, or another
injured party, would bring a liability claim against states
responsible for climate change no longer is a topic for fiction
or a theoretical prospect. There is a rise in plans for
litigation worldwide for consequences of global warming.''--
International law professors Michael Faure and Andre
Nollkaemper

Part XV of UNCLOS addresses the settlement of maritime disputes
between parties to the Convention. Part XV contemplates that UNCLOS
states parties, in accordance with the U.N. Charter, will attempt to
resolve maritime disputes peacefully without resort to the Convention's
compulsory procedures. When a dispute arises between two UNCLOS
members, they are obligated to ``proceed expeditiously to an exchange
of views regarding its settlement by negotiation or other peaceful
means.'' States parties may also resort to a nonbinding ``conciliation
procedure'' under Annex V of the Convention.
But if a maritime dispute cannot be settled in a voluntary manner,
any UNCLOS state party may compel another state party to defend itself
in one of four forums: the International Tribunal for the Law of the
Sea (ITLOS), the International Court of Justice (ICJ), an arbitral
tribunal organized under Annex VII, or a ``special'' arbitral tribunal
organized under Annex VIII. Within ITLOS, a special tribunal, the
Seabed Disputes Chamber (SDC), was established to resolve disputes
about activities on the seabed floor beyond the limits of national
jurisdiction, known as ``the Area.''
Acceding to UNCLOS would expose the U.S. to lawsuits on virtually
any maritime activity, such as alleged pollution of the marine
environment from a land-based source or through the atmosphere.
Regardless of the merits, the U.S. would be forced to defend itself
against every such lawsuit at great expense to U.S. taxpayers. Any
judgment rendered by an UNCLOS tribunal would be final, could not be
appealed, and would be enforceable in U.S. territory.
Unlike a resolution passed by the U.N. General Assembly or a
recommendation made by a human rights treaty committee, judgments
issued by UNCLOS tribunals are legally enforceable upon members of the
Convention. Article 296 of the Convention, titled ``Finality and
binding force of decisions,'' states, ``Any decision rendered by a
court or tribunal having jurisdiction under this section shall be final
and shall be complied with by all the parties to the dispute.''
Judgments made by UNCLOS tribunals are enforceable in the same
manner that a judgment from a U.S. domestic court would be. For
example, Article 39 of Annex VI states that ``The decisions of the
[Seabed Disputes] Chamber shall be enforceable in the territories of
the States Parties in the same manner as judgments or orders of the
highest court of the State Party in whose territory the enforcement is
sought.'' In other words, if the United States accedes to the
Convention, the U.S. Government will be required to enforce and comply
with SDC judgments in the same manner as it would enforce and comply
with a judgment of the U.S. Supreme Court. In other words, the U.S.
court system will serve not as an avenue for appeal from UNCLOS
tribunals, but rather as an enforcement mechanism for their judgments.
The domestic enforceability of UNCLOS tribunal judgments was
confirmed by U.S. Supreme Court Justice John Paul Stevens in the
landmark 2008 case, Medellin v. Texas. In Medellin, Justice Stevens,
writing a concurring opinion, cited Article 39 of Annex VI for the
proposition that UNCLOS members--presumably including the United States
if it accedes to the Convention--are obligated to comply with the
judgments of the Convention's tribunals.
U.S. accession to the Convention would provide an opportunity and
legal forum for other UNCLOS members to initiate lawsuits against the
U.S. challenging the adequacy of its efforts to protect the marine
environment. Although current U.S. law may satisfy many of the general
environmental obligations set forth in the Convention, the U.S. might
nevertheless be forced to defend itself in a costly and politically
embarrassing lawsuit challenging the sufficiency and enforcement of
U.S. domestic environmental laws and regulations. One such lawsuit--the
MOX Plant Case (Ireland v. United Kingdom)--has already been litigated
in UNCLOS tribunals.
Acceding to UNCLOS would commit the U.S. to controlling its
pollutants, including alleged ``harmful substances'' such as carbon
emissions and other greenhouse gases (GHG), in such a way that they do
not negatively impact the marine environment. The U.S. would also be
obligated to adopt laws and regulations to prevent the pollution of the
marine environment from the atmosphere and could be liable under
international law for failing to enact legislation necessary to prevent
atmospheric pollution. Moreover, such domestic laws and regulations
``shall'' take into account ``internationally agreed rules, standards
and recommended practices and procedures.'' The ``internationally
agreed rules, standards and recommended practices'' that could be
invoked by UNCLOS litigants may include instruments such as the U.N.
Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol.
A consensus has emerged within the international environmental and
legal community that the United States is the best target for an
international climate change lawsuit. One law professor has
characterized the United States as a likely target because it is a
developed nation with high per capita and total GHG emissions, adding
that the ``higher the overall historic and present contribution to
global emissions by the defending party, arguably the better the chance
of a successful outcome.''
Over the past decade, there has been a steady drumbeat to initiate
an international climate change lawsuit against the United States, and
UNCLOS tribunals have featured prominently among the potential forums
identified as a venue for such a case.

In 2002, the Prime Minister of Tuvalu, a Pacific island
nation consisting of a chain of nine coral atolls, stated his
intention to initiate a climate change lawsuit against the
United States because of its failure to adopt the Kyoto
Protocol. That year, at the World Summit for Sustainable
Development held in Johannesburg, Tuvalu's Government lobbied
other small island nations to join them in such a suit at the
International Court of Justice.
In 2003, the Washington, DC-based Environmental Law
Institute published ``The Legal Option: Suing the United States
in International Forums for Global Warming Emissions'' by law
professor Andrew L. Strauss. According to Strauss, the U.S.
rejection of the Kyoto Protocol ``makes the United States the
most logical first country target of a global warming lawsuit
in an international forum.'' The article proposed various
forums for initiating a lawsuit against the United States,
including UNCLOS tribunals, but Strauss lamented, ``As the
United States has not adhered to the Convention, however, a
suit could not be brought directly against it under the
Convention.''
In her 2005 book ``Climate Change Damage and International
Law,'' law professor Roda Verheyen posed a hypothetical case
that could be brought against the United States for its alleged
responsibility in melting glaciers and causing glacial outburst
floods in the Himalayas. The claim would include compensation
for flood damages as well as additional funds to monitor
glacial lakes and prevent future floods. Verheyen based
liability for such damages on the U.S.'s alleged violation of
its commitments under the UNFCCC and failure to ratify the
Kyoto Protocol.
In December 2005, the Inuit Circumpolar Council, an
international nongovernmental organization representing Inuit
peoples in Alaska, Canada, Greenland, and Russia, filed a
petition against the United States at the Inter-American
Commission on Human Rights (IACHR), a human rights body
operating within the Organization of American States. The
petition requested that the IACHR direct the United States to
adopt mandatory measures to limit its emissions and to provide
assistance to help the Inuit adapt to the impacts of climate
change.
In 2006, the ``International Journal of Sustainable
Development Law & Policy'' published ``Potential Causes of
Action for Climate Change Damages in International Fora: The
Law of the Sea Convention,'' in which law professor, William C.
G. Burns, cited UNCLOS's marine pollution provisions as a basis
for a cause of action for rising sea levels and changes in
ocean acidity. Burns named the United States as ``the most
logical State to bring an action against given its status as
the leading producer of anthropogenic greenhouse gas emissions,
as well as its failure to ratify Kyoto,'' but noted that the
U.S. ``is not currently a Party to the Convention.''
In a September 2011 speech to the U.N. General Assembly,
Johnson Toribiong, President of the Pacific island nation of
Palau, called upon the General Assembly to seek an advisory
opinion from the International Court of Justice ``on the
responsibilities of States under international law to ensure
that activities carried out under their jurisdiction or control
that emit greenhouse gases do not damage other States.''

In sum, the United States would be at the top of the list of
potential defendants in an UNCLOS climate change lawsuit, if the U.S.
accedes to the Convention. Thus far, the United States has denied
potential climate change claimants their day in international court by
refusing to accede to UNCLOS. Clearly, accession to the Convention
would open the door to these litigants as well as to their advocates in
the international academic, environmental, and nongovernmental
organization communities.

NAVIGATIONAL RIGHTS AND FREEDOMS

In 1993, the Department of Defense issued an Ocean Policy Review
Paper on ``the currency and adequacy of U.S. oceans policy, from the
strategic standpoint, to support the national defense strategy.'' The
paper concluded that U.S. national security interests in the oceans
have been protected even though the U.S. is not party to UNCLOS:

U.S. security interests in the oceans have been adequately
protected to date by current U.S. ocean policy and implementing
strategy. U.S. reliance on arguments that customary
international law, as articulated in the nondeep seabed mining
provisions of the 1982 Law of the Sea Convention, and as
supplemented by diplomatic protests and assertion of rights
under the Freedom of Navigation Program, have served so far to
preserve fundamental freedoms of navigation and overflight with
acceptable risk, cost and effort.

Almost 20 years later, there is no evidence that suggests a change
in circumstances such that U.S. accession to UNCLOS has become
essential to the successful execution of the U.S. Navy's global
mission.
Throughout its history, the United States has successfully
protected its maritime interests despite not being an UNCLOS member.
The reason is simple; Enjoyment of the Convention's navigational
provisions is not restricted to UNCLOS members. Those provisions
represent widely accepted customary international law, some of which
has been recognized as such for centuries. UNCLOS members and
nonmembers alike are bound by the Convention's navigational provisions.
The body of international law known as the ``law of the sea'' was
not invented in 1982 when UNCLOS was adopted, but rather ``has its
origins in the customary practice of nations spanning several
centuries.'' It developed as customary international law, which is
``that body of rules that nations consider binding in their relations
with one another. It derives from the practice of nations in the
international arena and from their international agreements.'' Although
not a party to UNCLOS, the United States is bound by and acts in
accordance with the customary international law of the sea and
considers the UNCLOS navigational provisions as reflecting
international law.
Most of the UNCLOS navigational provisions have long been
recognized as customary international law. The Convention's articles on
navigation on the high seas (Articles 86-115, generally) and passage
through territorial waters (Articles 2-32, generally) were copied
almost verbatim from the Convention on the High Seas and the Convention
on the Territorial Sea and the Contiguous Zone, both of which were
adopted in 1958. The United States is party to both Conventions, which
are considered to be codifications of widely accepted customary
international law.
Similar to other multilateral conventions, such as the Vienna
Convention on Diplomatic Relations, UNCLOS is said to ``have codified
settled customary international law or to have `crystallized' emerging
customary international law.'' UNCLOS codified customary law relating
to navigation on the high seas and through territorial waters and
``crystallized'' emerging customary law, such as the concepts of
``transit passage'' through international straits and ``archipelagic
sea-lanes passage.'' As summarized by Defense Department official John
McNeill in 1994, UNCLOS ``contains a comprehensive codification of
long-recognized tenets of customary international law which reflect a
fair balance of traditional ocean uses.'' In short, the Convention's
navigational provisions have attained such a status that all nations--
UNCLOS members and nonmembers alike--are expected to adhere to them.
One way to determine the extent to which UNCLOS's navigational
provisions have achieved the status of binding international law is to
study the behavior of nations. Behavior in conformity with the
Convention--known as ``state practice''--is additional evidence that
its navigational provisions reflect international law. Indications that
a state is acting in conformity with international law may be found in
states' ``legislation, the decisions of their courts, and the
statements of their official government and diplomatic
representatives.'' A nation's inaction regarding a particular
navigational provision may also be viewed as state practice because it
can be deemed to be acquiescence.
The consistent practice of states--maritime states, coastal states,
UNCLOS members, and nonmembers--indicates that the UNCLOS navigational
provisions are almost universally accepted law. The ``Restatement of
the Law, Third, of the Foreign Relations Law of the United States''
notes:

[B]y express or tacit agreement accompanied by consistent
practice, the United States, and states generally, have
accepted the substantive provisions of the Convention, other
than those addressing deep sea-bed mining, as statements of
customary law binding upon them apart from the Convention.

This has long been the U.S. position. Since the Reagan
administration, the official U.S. policy has been that the UNCLOS
provisions on the traditional uses of the oceans, including the
provisions on navigation and overflight, confirm international law and
practice. Specifically, in March 1983, President Ronald Reagan
announced the U.S. oceans policy in light of his decision not to sign
UNCLOS. Reagan announced that ``the United States is prepared to accept
and act in accordance with the balance of interests relating to
traditional uses of the oceans--such as navigation and overflight'' and
``will recognize the rights of other states in the waters off their
coasts, as reflected in the Convention, so long as the rights and
freedoms of the United States and others under international law are
recognized by such coastal states.''
Reagan's 1983 oceans policy statement confirmed what was already
widely recognized: that the navigational provisions of UNCLOS generally
reflect customary international law and as such must be respected by
all nations.
Yet proponents of U.S. accession to UNCLOS maintain that the United
States cannot fully benefit from these navigational rights unless it is
a party to the Convention, which ``provides'' and ``preserves'' these
rights. This is simply incorrect. The United States enjoys the same
navigational rights as UNCLOS parties enjoy.
At the December 1982 final plenary meeting of the Third United
Nations Conference on the Law of the Sea, some nations took the
opposite position, contending that any nation that chose not to join
the Convention would forgo all of these rights. On March 8, 1983, the
United States, exercising its right to reply, expressly rejected that
position:

Some speakers discussed the legal question of the rights and
duties of States which do not become party to the Convention
adopted by the Conference. Some of these speakers alleged that
such States must either accept the provisions of the Convention
as a ``package deal'' or forgo all of the rights referred to in
the Convention. This supposed election is without foundation or
precedent in international law. It is a basic principle of law
that parties may not, by agreement among themselves, impair the
rights of third parties or their obligations to third parties.
Neither the Conference nor the States indicating an intention
to become parties to the Convention have been granted global
legislative power . . . .
The United States will continue to exercise its rights and
fulfill its duties in a manner consistent with international
law, including those aspects of the Convention which either
codify customary international law or refine and elaborate
concepts which represent an accommodation of the interests of
all States and form part of international law.

In sum, it is not essential or even necessary for the United States
to accede to UNCLOS to benefit from the certainty and stability
provided by its navigational provisions. Those provisions either codify
customary international law that existed well before the Convention was
adopted in 1982 or ``refine and elaborate'' navigational rights that
are now almost universally accepted as binding international law.
One prominent proponent of U.S. accession to UNCLOS recently stated
that opposition to the Convention was not based on ``facts'' or
``evidence'' but rather on ``ideology and mythology.'' The facts and
evidence, however, are as follows:

The U.S. already has full jurisdiction and control over its
entire Continental Shelf--including its ``Extended''
Continental Shelf. Through Presidential proclamations, acts of
Congress, and bilateral treaties with neighboring countries,
the United States has successfully demarcated the limits of its
maritime boundaries and key areas of its ECS;
The U.S. has clear title to all hydrocarbon resources lying
under the ECS and currently enjoys the rights to any and all
royalty revenue generated from the exploitation of such
resources;
The U.S. has demonstrably exercised jurisdiction and control
over its ECS, as evidenced by the fact that it has been leasing
blocks for development to U.S. and foreign oil exploration
companies since August 2001;
The ``western gap'' in the Gulf of Mexico is the only area
of ECS that has been offered for development by the United
States, and 20 percent of that area is currently under lease.
U.S. companies such as Chevron and companies from Brazil,
Denmark, France, Italy, Norway, and the United Kingdom hold
active leases on the western gap ECS;
No comprehensive study has been conducted to determine the
value of the hydrocarbon resources that lie beneath the vast
U.S. ECS that is likely twice the size of California;
The U.S. Extended Continental Shelf Task Force estimates
that the U.S. ECS resources ``may be worth many billions if not
trillions of dollars'';
If the U.S. accedes to UNCLOS it will be making an open-
ended commitment to transfer an incalculable sum of royalty
revenue from the U.S. Treasury to the International Seabed
Authority for redistribution to developing and landlocked
nations;
The policy and law of the United States, both domestically
(i.e., the Deep Seabed Hard Mineral Resources Act) and
internationally, is that U.S. citizens and corporations have
the right to explore and exploit the deep seabed regardless of
whether or not the United States is a party to UNCLOS;
Acceding to UNCLOS would expose the United States to
international lawsuits, including baseless environmental cases
and suits based on alleged U.S. contributions to global climate
change;
Certain UNCLOS states parties, environmental activists, and
international legal academics are actively exploring the
potential of using international litigation against the United
States in an UNCLOS tribunal to advance their climate change
agenda;
An adverse judgment in a climate change lawsuit initiated
under UNCLOS would be final, not subject to appeal, and
enforceable in the United States. Such a judgment would impose
massive regulatory burdens on U.S. companies, which would pass
the costs on to American consumers;
For more than 200 years before UNCLOS was adopted in 1982
and for 30 years since then, the U.S. Navy has successfully
protected U.S. maritime interests regardless of the fact that
the U.S. has not joined the Convention;
The U.S. Navy has never been successfully denied access to
any international strait or archipelagic water and regularly
exercises its freedom of navigation and overflight rights on
the high seas and ``innocent passage'' through territorial
waters;
The U.S. Navy's ``Commander's Handbook on the Law of Naval
Operations'' is the preeminent operational manual regarding
navigational rights and is considered the gold standard by
maritime nations worldwide, many of which have adopted it for
use by their own navies; and,
The United States is a member of the International Maritime
Organization and a founding member of the Arctic Council--
organizations in which it actually means something to have a
``seat at the table.''

All of these facts collectively represent compelling evidence that
the United States need not accede to UNCLOS in order to advance its
maritime and national security interests. Indeed, the evidence suggests
that there are real costs involved in accession that outweigh the
supposed benefits, which are dubious and insubstantial.
UNCLOS is a controversial and fatally flawed treaty. Accession to
the Convention would result in a dangerous loss of American
sovereignty. It would require the U.S. Treasury to transfer billions of
dollars to an unaccountable international organization in Jamaica,
which in turn is empowered to redistribute those American dollars to
countries with interests that are inimical to the United States. The
Convention's mandatory dispute mechanisms will result ultimately in
troublesome and costly lawsuits and adverse judgments if the United
States is deemed to have ``violated'' the Convention--most likely when
the United States has acted in its own best interests.
The U.S. Navy's support for the navigational rights enshrined in
UNCLOS is far outweighed by the Convention's nonnavigational
provisions. The practices of the Navy and the navies of other major
maritime powers created the very customary international law upon which
the navigational provisions of UNCLOS are based. The Navy enjoys those
same navigational rights and freedoms despite nonaccession to the
treaty. The Navy's insistence that a failure to join UNCLOS will hinder
its ability to conduct its global mission successfully is belied by the
facts and demonstrably disproved by history.

The Chairman. Thank you very much, Mr. Groves.
I really appreciate it, and that is a good, articulate
summary of the position. I think it helps us really join the
discussion here, which I am thrilled to be able to tell you I
am very happy is between Republicans. [Laughter.]
So I am going to look to you guys to thrash it through. It
is sort of interesting to me that this treaty----
Mr. Rumsfeld. Mr. Chairman, in defense of John Negroponte,
he is a career diplomat.
The Chairman. Career diplomat, with no party affiliation.
[Laughter.]
John, is that true?
Mr. Rumsfeld. I wouldn't want him tarnished.
The Chairman. Don't tarnish him. Fine. Mr. Secretary, thank
you for saving him from perdition.
Let me just say to all of you that it is sort of
interesting to me that this Democratic chairman is working very
hard to get something done which President Nixon conceived of,
President Reagan fixed and supported and pushed, President
George Herbert Walker Bush refined, and President George W.
Bush, with whom I had many disagreements, obviously----
[Laughter.]
The Chairman [continuing]. Saw fit to send to the Senate.
And I don't think that is inconsequential. I don't think it is
inconsequential that today five former Republican Secretaries
of State, beginning with Henry Kissinger, all said we have got
to do this. So let us explore it.
I want to explore it. And I am going to ask you guys to
sort of engage in a lot of this dialogue, if I can.
But Mr. Groves, let me just sort of follow through a little
bit, if I can. You, in your testimony, your written testimony,
say that there is no legal barrier. I think you repeated it
just at the end of your testimony now. There is no legal
barrier to prevent U.S. access, exploration, and exploitation
of the resources of the deep seabed. So we can go out there and
we can go ahead and dig.
And the United States, as part of your position, has long
held that U.S. corporations and citizens have the right to go
out and develop the resources of the deep seabed, whether or
not the United States accedes to UNCLOS. Is that a fair
statement? You believe that?
Mr. Groves. Yes, Mr. Chairman.
The Chairman. OK. Now, if that is true, is it your general
point that under international law, there is no legal right,
except by a treaty, to exclude another nation from mining in
the deep seabed because it is out on the high seas?
Mr. Groves. Correct. Correct. Another country couldn't
unreasonably interfere----
The Chairman. They can't interfere with us?
Mr. Groves. Correct.
The Chairman. OK. But that works both ways, doesn't it?
Mr. Groves. Yes, we can't unreasonably interfere with other
countries' claims as well.
The Chairman. So if the United States, without joining the
treaty, decides to do some deep seabed mining, under
international law, we couldn't prevent the Chinese or the
Russians from piggybacking half a mile away from our mining
claim or 200 yards away, could we?
Mr. Groves. No. As long as it didn't unreasonably interfere
with our own claim.
The Chairman. Well, what would be the legal--where would be
the legal recourse for that?
Mr. Groves. You mean if they did----
The Chairman. What is to back up our claim? We don't have a
claim. We are out in the deep sea without any legal instrument
because we are not a party to the treaty. Where would our claim
be?
Mr. Groves. The only claims that exist right now on the
U.S. side are those held by Lockheed Martin. Those are actually
legacy claims----
The Chairman. No, no, no. I am talking broader here.
What would be--by what mechanism would--particularly, let
us say Russia and China, which are signatories to this treaty,
get the legal claim 100 yards from where we are, and we are not
party to it. If you can find a company that is dumb enough and
go drill without being party to the treaty, but let us presume,
for the purposes of your argument, you say go to it. Go dig.
What is the mechanism by which they are going to assert any
right?
Mr. Groves. Well, if the Russian--in your hypothetical, Mr.
Chairman----
The Chairman. Well, it is not a hypothetical. It is real
under your regimen. Under your regimen, it is real. You are
saying don't join the treaty. Go out and dig. That is your
theory, and you just agreed.
Mr. Groves. No, but your hypothetical was that there is a
Chinese or Russian claim within a couple of hundred yards of an
existing United States claim.
The Chairman. Or let us say it is right on the same spot.
But the Law of the Sea folks have acceded to that because they
are the members, and we are not. And they say, ``Screw you,
U.S. These guys are part of it, and we are giving them the
claim.''
Mr. Groves. Well, two things would happen, Mr. Chairman. If
Russia or China or any other country interferes with a claim
that has been made under the auspices of U.S. law, particularly
the Deep Seabed Hard Mineral Resources Act, then this would be
a bilateral problem between the United States and whichever
other country was doing that.
They would be infringing on our claim. And so, the relief--
--
The Chairman. We don't have a claim. There is no claim.
What are you doing? Claiming into the thin air? Claiming to
God? Who are you claiming to?
Mr. Groves. No, there is a U.S. statute and regulatory
framework called the Deep Seabed Hard Mineral Resources Act
that allows U.S. companies to apply for licenses from the
Administrator of NOAA to make a claim in the deep seabed, and
countries can move under those statutes and those regulations
to make claims and engage in deep seabed mining.
So there is a claim.
The Chairman. Now, Mr. Bellinger and Secretary Negroponte,
isn't that precisely what brought--the kind of thing that
brought the Bush administration to say that the only way as a
lawyer you could conceivably say to Lockheed Martin or another
company go drill is to know that you have certainty with
respect to the claim. And you wouldn't have certainty, would
you not, under the structure that Mr. Groves has described?
Mr. Bellinger. Thanks, Mr. Chairman.
As you know, a cardinal feature of the Bush administration
was, in fact, to preserve our freedom of action and our
sovereignty. So we were not quick to sign up to obligations
that would tie us down.
But in looking at the best way for U.S. business,
particularly as new technologies became available that would
allow us to mine in the deep seabed or with the melting Arctic
ice to exploit oil/gas resources in the Arctic, that the best
way to allow companies to do that was to have the legal
certainty that was provided under the Convention.
We did look at customary international law, which, in fact,
the Navy does rely on successfully for their naval activities.
Although we thought again that the Convention would be better.
But we saw that the only way that U.S. business could, in fact,
engage in deep seabed mining or oil and gas exploitation in the
Arctic was through the treaty.
The Chairman. Well, I mean, isn't it accurate that if 161
nations have signed up for the treaty and that is the agreed-
upon international mechanism for legitimizing claims under the
ocean, would the United States be advantaged or disadvantaged
in just staking its claim outside of that regimen relative to
somebody who had a legitimized claim under it?
Mr. Bellinger. The companies told us and they continue to
tell you that that would be very risky, and these are companies
who would want to invest literally billions of dollars out in
the deep seabed or the Extended Continental Shelf. They would
not want to invest that kind of money based on a risky claim.
They would prefer the certainty that the treaty provides.
The Chairman. I would like to ask both of you, if you
would, I thought that Mr. Groves did an excellent job of kind
of laying out the case, so to speak. But I think we need to
examine that now, and I want to try and do that.
He suggested that there would be an invitation to adverse
judgments. There are three big reasons. Adverse judgments.
Second, the transfer of an unbelievable amount of royalty. And
third, that we would have to request permission to mine from
Sudan.
Can you, both of you, speak to those, if you would, and
give us a sense of what the committee ought to think about
that? Just--go ahead.
Ambassador Negroponte. I mean, maybe we can share these,
John. On the question of royalties, I think one of the really
important points that I am not sure we have mentioned this
afternoon is that if you look at the original part 11 that was
negotiated and concluded in 1982, the fees were very high and
very costly. And that was one of the things, I think, that
threw people off.
In the amended version now of part 11 in the annex there,
it says that those fees and that fee structure does not apply,
and it leaves it to subsequent determination by a council of
which if we acceded to the treaty, we would be a member and if
we ratified this amendment to the treaty. We would be a member
of that council, and the procedure for making decisions on that
kind of issue would be by consensus.
So we would be in a very advantageous position to protect
our interests. So I think as far as distribution of fees,
decisionmaking process, and these new arrangements, I think our
interests would be very well protected.
The other point was already made about how from year zero
to year five, there would be no royalties in the case of oil
and then up to 7 percent beyond that. But again, that is in the
case of actually----
The Chairman. Well, I think it is important to recognize
that--I think this is important because the companies will tell
you this. One of the reasons everybody got happy about this is
that it is
1 percent for the first 5 years. It is an additional percent
for the next year, an additional percent each year up. So you
are really looking at 6 percent, 7 percent, 8 percent, up until
you get to 12 years.
So the top amount is 7 percent. So you are going up very
slowly. The top amount is 7 percent. But many of those
companies believe that with modern technology, they have an
ability to exploit well within that period, and they are not
looking at these enormous amounts of royalties.
I mean, that is----
Ambassador Negroponte. Right.
The Chairman. But would you come back for a moment to the
adverse judgments? There is a fear here that----
Ambassador Negroponte. I will defer to John on that.
Mr. Bellinger. Sure. I think it is much more likely that
there would be an adverse judgment or certainly litigation
against a U.S. company that tried to engage in deep seabed
mining or mining on the U.S. Extended Continental Shelf outside
the treaty. I think anybody could see that.
To rely on a speculative legal argument accepted by no
country in the world, that is flatly contrary to the terms of a
Convention that has existed for 30 years, for ExxonMobil or
Lockheed to spend billions of dollars relying on an academic
theory suggested by a think tank, I think that is something
that would create great legal risk for it. It is not surprising
to me that their CEOs have written to say their preference is
to rely on the terms of the treaty.
With respect to other litigation, environmental litigation,
I think the risk is relatively low. We have not seen other
countries, and as you point out, there are lots of major
industrial countries, including Japan and the U.K. and others,
who are potential targets for environmental litigation. They
have not been sued for climate change.
And so, let me--the last thing I will say is I suffered
under lawfare, along with Secretary Rumsfeld, as the legal
adviser for the Bush administration. There were lots of
unfounded claims relating to terrorism against us. So I have
seen these.
But I think in respect to environmental litigation, I just
don't see that joining the treaty is going to open us up to
significant new claims.
The Chairman. I resisted saying that, well, you should have
suffered, but----
[Laughter.]
Mr. Bellinger. Mr. Chairman, if I could just----
The Chairman. Only joking. Only joking.
If I can come back for a minute, just one thing, and then I
am going to turn to Senator Lugar. Isn't it a fact, though,
that no environmental suit would be allowed unless we were a
party to an international agreement?
Mr. Bellinger. That is exactly the point, Mr. Chairman.
The Chairman. OK. Senator Lugar.
Senator Lugar. Mr. Chairman, I am prepared to come after
Senator Risch.
The Chairman. Oh, Senator Risch, he has a conflict. So I am
happy to recognize him.
Senator Risch. Thank you, Mr. Chairman.
I will try to be brief. First of all, I would like to place
in the record, without objection, a letter addressed to the
chairman and ranking member and the committee, dated June 14,
2012, and it is on Heritage Action stationery. It is by
numerous former Government officials, including, obviously, Mr.
Rumsfeld, John Bolton, Edwin Meese, many, many others, who
reach a very, very different conclusion than two of the
witnesses here today. I ask it be placed in the record.
The Chairman. Absolutely. Without objection, that will be
made part of the record.
Senator Risch. I have got--there are so many parts to this.
I am going to focus on just one, and it is going to pick up
right where you left off, Mr. Bellinger. I have your testimony
in front of me, and this caught my eye. So I am going to focus
on it.
And on the fourth paragraph on page 10, you state, ``Some
have argued that the Convention might obligate the United
States to comply with international environmental agreements,
such as Kyoto Protocol, to which the United States is not a
party.'' You stated that.
I am one of those people, except you understated it. I
don't believe that it might. I believe it will.
The first sentence of the next paragraph, you state
conclusory, ``The terms of the Convention do not require
parties to comply with other international environmental
treaties.'' That was your conclusion. Then you quote a real
small portion of one sentence to reach that conclusion.
I know you are familiar with this, but I wish you would
take the treaty in front of you there and open with me to
article 212, subsection 1. It is on page 175. Have you got that
in front of you? Pardon?
Mr. Bellinger. I have it here.
Senator Risch. OK. Great. The very first part of the
sentence says, ``States shall adopt laws and regulations to
prevent, reduce, and control pollution.'' Nothing wrong with
that. The United States has already done that. There is no
sideboards on it. It doesn't say exactly what we have to do, as
long as we enact some kind of laws. Don't have any difficulty
with that.
But then, when you turn to article 222 and if you will go
down to the middle of the first paragraph, if you read what we
just read. I am sorry. Article 222, page 180.
Mr. Bellinger. Page what?
Senator Risch. Page 180. It is about the middle of the
page, and the treaty goes on to state that the signatories
``shall''--again, the word ``shall.'' ``Shall adopt laws and
regulations and take other measures necessary to implement
applicable international rules and standards established
through competent international organizations or diplomatic
conference to prevent, reduce, and control pollution.''
That is going to be the law of the land if we accede to
this treaty. How long do you think it is going to take a
Federal judge to find Kyoto or any one of the other conventions
that they have as being a competent international organization,
which has set standards and rules which by this language we
have acceded to?
I mean, you are going to find a gaggle of judges tripping
over each other to force the EPA and other organizations in the
United States to say you shall, just as the Congress or the
U.S. Senate has said, you shall adopt these rules and
regulations. That doesn't trouble you at all?
Mr. Bellinger. Well, Senator, I really do appreciate your
concerns because these were exactly some of the issues that we
looked at in the Bush administration. You will recall in our
first year, one of the treaties that we rejected was, in fact,
the Kyoto Protocol. So the Bush administration was very
concerned about that.
Senator Risch. And that is good, but we want to focus on
this language, which is black and white----
Mr. Bellinger. I just want to emphasize that we were
approaching this from a perspective that I think is sympathetic
to your position.
With respect to 212, and then I will go on to 222, it says
we shall adopt laws and regulations to prevent, reduce, and
control pollution, but then only taking into account
internationally agreed rules.
Senator Risch. Sure.
Mr. Bellinger. So we don't have to enact Kyoto.
Senator Risch. Nothing wrong with that.
Mr. Bellinger. 222 says that we shall enforce those laws
that have been adopted in accordance with article 212,
paragraph 1. So it says we have to enforce our own laws.
Senator Risch. Nothing wrong with that. But after what you
just read, the next word is ``and.'' ``And with other
provisions of this Convention and shall adopt laws and
regulations and take other measures necessary to implement,''
et cetera.
Mr. Bellinger. And the key word there, Senator, is
``applicable.'' Applicable international rules and standards.
If we haven't signed it, it is not applicable to us.
Senator Risch. Well, Mr. Bellinger, I would greatly
disagree with that reading of it. It doesn't say that at all.
If it did say that, you would say that in plain English.
What they mean by ``applicable,'' by the word
``applicable,'' is applicable rules to the situation at hand.
Mr. Bellinger. Well, I can--I understand your reading the
plain text of it. It is very difficult to read, as all of us
have pointed out, language like this. And I agree with you.
That is why it took us in the Bush administration a
considerable amount of time to work our way through these.
All I can tell you, Senator, is you raise a legitimate
concern. But the longstanding view of the Bush administration
and of the, I understand, the new administration is to say
applicable international rule means it has to apply to you.
Treaties that have been negotiated by other people to which we
are not party don't apply to us.
And Secretary Rumsfeld I think would probably agree there
were lots of international human rights rules that people said
we ought to abide by that we were not party to, and we would
say those are not applicable to us because we have not become
party to them.
Senator Risch. And you are willing to take the chance that
that torture--that tortured interpretation will be accepted by
a United States District Court in the United States?
Mr. Bellinger. Again, sir, I am with you on this in that
you raise concerns. I have seen lots of lawfare brought by
groups, by other countries, by people who were upset with the
United States. I think it is fair to raise that as a concern.
That is the view of the U.S. Government about the meaning of
those terms, and I think then, on balance, even if this is a
fair concern, you have to take into account the cost versus the
benefit.
And with respect to U.S. companies, there is a false choice
to suggest that U.S. companies, if we don't join the treaty,
can still go ahead and mine. And so, we are basically denying
them the opportunity, even if you have a fair point on
environmental litigation, the benefits of the treaty to U.S.
businesses and to the U.S. Treasury and to the U.S. Navy
outweigh what may well be a fair concern to raise.
Senator Risch. Appreciate your judgment in that regard, and
thank you, Mr. Bellinger.
And thank you, Mr. Chairman, for your----
The Chairman. Senator, as you are taking off or going home,
whatever it is, article 297. I would direct you to take a
moment to read that in your travels.
Senator Risch. I have read 297.
The Chairman. Paragraph C, which is pretty clear that the
only way in which anything regarding the environment would
apply to us is where it is applicable to us because we have
signed up to it or we are part of it, and I think that is
exactly what Mr. Bellinger is saying.
So, in fact, within the four corners of this agreement is a
dispensation against any state, the United States or anybody
else, who hasn't signed up to the international law. So there
is no standing. There is no exposure.
Senator Risch. I don't read it that way. But thank you, Mr.
Chairman.
The Chairman. Well that is the language. It is hard not to
read the language that way because that is what it says.
Senator Risch. I couldn't agree with you more that the
language is black and white.
The Chairman. If you only take one section, you can read it
your way. But if you apply the entire law, it is different.
Mr. Bellinger. And Senator Risch, and I know you need to
leave, I want to simply say from--I don't want that to be an
argument between us. I think it is a completely fair point
reading that language and a fair question to ask. And there is
an argument on the other side.
I have given you what is the view, I think, of both the
Bush administration, which looked at these things very
seriously and was very concerned about environmental litigation
and ultimately felt that that was the better interpretation of
that provision. And even counterbalancing those risks, still
overall the benefits of the treaty would still counterbalance
against the risks that you have raised.
So I understand and support those concerns.
Senator Risch. Appreciate it.
The Chairman. Thanks, Senator Risch.
Senator Coons.
Senator Coons. Thank you, Chairman Kerry.
And thank you for an opportunity to join you again in our
second hearing today on the Law of the Sea.
This morning, as others have noted, we had six four-star
officers testify that ratifying the Law of the Sea Convention
would substantially improve the flexibility and capability of
the United States and their ability to fulfill their respective
missions. Now they are not alone in doing so. Since 1994, their
predecessors have almost unanimously made the same claim.
Now that means that those who oppose this treaty need to
convincingly explain why the preponderance of admirals and
generals who have claimed the treaty is of value are wrong.
Opponents have made a strong effort to do so for almost 20
years, but leaders of our military continue to maintain their
claim that not ratifying makes the jobs of the men and women
who serve under them harder and more dangerous.
I want to be clear. I am grateful Secretary Rumsfeld, Mr.
Groves have come to testify about something on which they feel
strongly. The questions they raise about the treaty, especially
questions on the impact of sovereignty, are well worth
considering and answering, and I believe they have been
answered.
I hope we can answer them again today. And I hope we can do
it in a way that makes it clear to everyone this treaty is not
a threat to the American way of life, but at least in these
areas around navigation we have discussed earlier today are a
real benefit to the men and women who serve us in our Armed
Forces.
Ambassador Negroponte, if I might? This morning, I had an
exchange with Admiral Greenert, the Chief of Naval Operations,
in charge of giving his best advice to the President, and to
Admiral Locklear, Commander of Pacific Command. And we
discussed what freedom of navigation operations mean, how they
work, and what opponents of the treaty would have us entirely
rely on, and what that instead means for the men and women who
serve.
We have talked a lot about strategy. But I think it is
important to remember that, at the end of the day, there are
sons and daughters, mothers and fathers, who serve, and we put
them at times, I think, needlessly in harm's way because of our
refusal to ratify.
You said in your testimony, and I quote, that the ``United
States puts its sailors in unneeded jeopardy when carrying out
freedom of navigation programs to contest Law of the Sea
abuses.'' Could you elaborate on how men and women in uniform
actually out there in contested areas in the seas or in the air
are put in unneeded jeopardy?
Ambassador Negroponte. Well, and I repeated that earlier
this afternoon before you arrived, Senator, as well.
I think that there is an element----
Senator Coons. Well, forgive my late arrival.
Ambassador Negroponte [continuing]. Of risk involved in
this, and I am trying to think of specific examples. And I
think I would go back quite a ways here because I recall a time
at which I was working in the Bureau of Oceans, Environment,
and Science, and we had this challenge program, where we
identify maritime claims that we think are not supported by
international law and where we feel our navigational interests
are affected.
And if I remember correctly--and John will correct me if I
am wrong, or perhaps Secretary Rumsfeld--the Gulf of Libya was
one of those because the Libyans had a rather restrictive
interpretation of freedom of the seas in that gulf there. And
so, we would deliberately sail into what they considered waters
over which they had greater jurisdiction than we recognized.
And that always, especially when you are dealing with a regime
that was not exactly predictable, entailed a certain amount of
risk for those forces that were undertaking those exercises.
So I don't think that you can say that the Law of the Sea
is a substitute for the exercise of our navigational rights. We
are always going to exercise them. But I think it does reduce
the level of risk.
Senator Coons. Well, thank you, Ambassador.
One of the things I would welcome your expounding on a
little bit further, that some have seized upon comments made in
a previous panel by General Dempsey and some of the folks
testified today who suggested the Law of the Sea Treaty, this
Convention, if ratified, would not, in any way, help with force
projection, that a failure to ratify doesn't put our Nation at
greater risk.
But to be clearer, how would supporting this Law of the Sea
Treaty provide additional tools that would help our military
more safely conduct their missions?
Ambassador Negroponte. Well, I think another area, and
speaking as former Director of National Intelligence, I think
the fact that you have an internationally recognized freedoms
of navigation between the 12-mile outer limit of the
territorial sea and the 200-mile resource zone, and the fact
that this Convention now--not if it is modified someday by
somebody--but now recognizes the right of freedom of
navigation, that inherently protects certain intelligence
equities that we have as well.
Senator Coons. Mr. Groves, if I might, in your testimony,
you reference a Department of Defense issued ocean policy
review paper--I think it is from 1993--which states the freedom
of navigation program has served to preserve fundamental
freedoms of navigation and overflight with acceptable risk,
cost, and effort.
And I just have to question your assertion that 20 years
later, there is no evidence that suggest a change in
circumstances, such that U.S. accession to the Convention has
become essential to the successful execution of the Navy's
global mission. Over the past 5 years, as I mentioned in a
previous panel this morning, the actual number of countries
which the United States has challenged under this freedom of
navigation program has tripled.
It can't be without risk, without cost, and without effort.
I suppose perhaps we might differ about whether it is
acceptable. Do you see any change in the past 20 years that
might cause you to reconsider whether the freedom of navigation
program would have an additional valuable tool if we were to
accede to the treaty?
Mr. Groves. Thank you for the question, Senator.
You know, our Navy has had challenges throughout its
history. We managed a couple of world wars. We made it through
the cold war, the bulk of which or a great deal of which
happened after the Convention on the Law of the Sea was signed.
We have had bumping incidents with the Soviets. We have had EP-
3 incidents with China.
The challenges are always going to be there. The question
is whether joining the Convention is of such significance that
these challenges will either somehow go away or that we have
additional tools to address them. And my view is that due to
the other costs that are involved with the treaty, what I
believe to be a marginal effect of joining the Convention is
greatly outweighed.
That said, the Navy will continue to project force and will
continue to engage in freedom of navigation operations.
And as you heard from General Dempsey, our ability to
project force isn't based on the treaty. Thank God. It is based
on continuing to have a strong navy.
And so, it is just our view or my view that when you do the
cost-benefit analysis, whatever marginal benefit the Navy may
experience by joining the Convention is outweighed by the other
provisions that have those very real costs and risks.
Senator Coons. So if I hear you right, not to put words in
your mouth. But if I hear you right----
Mr. Groves. You can put words in my mouth. That is fine.
Senator Coons. You would agree, as we heard unanimously,
uniformly, from the generals, the admirals who testified this
morning--and General Dempsey and others who have consistently
testified--that there would be a benefit to the freedom of
navigation operations. There would be a benefit to our Armed
Forces in having another tool and having the opportunity to
pursue binding arbitration, for example, with allies, with whom
we do sometimes have to engage in these costly, risky
exercises.
You just view the overall costs of the treaty as exceeding
that real benefit, as being greater than that benefit?
Mr. Groves. I want to agree with our men and women in
uniform that there would be an actual benefit. But when I have
studied it, what has come clear to me is that nothing changes
operationally. We still do diplomatic protests and demarches in
the exact same way. I have read them when we protest a country
for an excessive maritime claim.
If we are going to do a freedom of navigation operation, we
would steam through in the same way, giving the same notice. So
what I have searched for, and what I have met with people over
at the Department of Defense for hours in an attempt to find
out, is what would exactly change operationally? Give me a
reason to believe that there is a tangible and real benefit for
the Navy here.
I haven't been satisfied on that front. And so, when you
weigh that against the other costs, I come down on the side of
skepticism.
Senator Coons. Well, Mr. Groves, I appreciate your
testimony. I would like to thank the whole panel for your
testimony today.
Part of what got me interested in this, as I mentioned at
our previous hearing, was a personal meeting with the former
Chief of Naval Operations, who, analyzing that same fact
pattern, came out in exactly the opposite place and saying that
there would be operations that would not need to be conducted,
that could instead be resolved through the mechanisms of this
treaty, and that that would reduce risk and cost and exposure
on duty and allow us to focus those very valuable resources on
areas where we genuinely needed to continue on these freedom of
navigation operations.
So thank you, Mr. Chairman. And thank you for the
opportunity.
The Chairman. Thank you very much, Senator.
Before I recognize Senator Lugar--are you taking off?--let
me just remind, I do think, Mr. Groves, I would just call your
attention to this fact because I went through their testimony
very carefully.
In the six four-stars who testified today, I really wanted
to see what they were specifically saying and see if I could
pin it down the way you did, too. And I came up with 16
advantages that they specifically define in their testimony,
and I commend it to my colleagues, 16 positive differentials
that come by virtue of signing onto this.
One of them was very clearly articulated in detail by
Commandant of the Coast Guard Papp, who talked about the
advantage in terms of their interdictions of narcotics, their
boarding and search in the Caribbean and elsewhere. There are a
whole series of very specific rules of the road, in a sense,
that relieve pressure cooker.
And here is what--you need to have the full statement of
General Dempsey. General Dempsey did say we wouldn't lose our
force, but he didn't say that there aren't additional risks, et
cetera. We are not going to lose our force because, hopefully,
the U.S. Congress and whoever is President is always going to
remain committed to have the strongest force possible, and we
will be able to protect our interests.
That is not the issue here, though. The issue is what
General Dempsey said in the rest of his statement, and I just
read it to you very quickly. He said, ``The failure to ratify
puts ourselves at risk of confrontation with others who are
interpreting customary international law to their benefit and
the risk of confrontation goes up.''
And what all of the commanders said today, and I think this
is a very important subtext to their testimony, was that the
world is changing very rapidly. Other nations are pressing for
resources in ways they have not ever been before. China, all
over the world, we know that. Resource-oriented policy beyond
anybody else.
And given that pressure for resources and that we are going
to become a planet of going from 7 billion to 9 billion in the
next 30, 40 years, that is only going to increase. What they
are saying, all of them, is that this provides an orderly
process for how to manage your way through that increased
pressure and tension, and that is part of what increases the
urgency.
The second thing they cited, and I think it is very
important for every member to realize this--and this is why I
said we will have a classified briefing--our intel community
will make it very clear that there are actors right now who are
behaving in ways that challenge us, where the Law of the Sea
would, in fact, have an ability to be able to address those
concerns. And that will be raised in the course of our
classified briefing.
So I do want to make sure the record is clear about both
what General Dempsey has said, what the four-stars said today,
and sort of where we are. You will have a chance to address
this if you want.
But let me get to Senator Lugar, and then we will come back
and finish up because I know there are a couple of colleagues
under pressure.
Senator Lugar. Well, thank you, Mr. Chairman.
I found the testimony very important just in terms of the
historical record of the evolution of this issue before
previous administrations and the Congress. Specifically, I
would mention testimony today that indicated that the Bush
administration made Law of the Sea a primary treaty objective,
beginning in 2002.
Now I remember that period because I had the privilege of
serving again as chairman of the Foreign Relations Committee as
Republicans got a majority, and we took seriously that list of
treaties and, as a matter of fact, were able to ratify a good
number. They came off the shelf and we had good debate. Law of
the Sea was among those, as we took that up in 2003 and,
ultimately, in 2004 the committee voted unanimously in favor of
the treaty.
Unfortunately, Senator Bill Frist, who was the Republican
majority leader, decided there were other priorities. And as a
result, we did not have floor debate, and that opportunity
passed.
Republicans lost the majority. Senator Biden became
chairman of the committee. He took it up again in 2007. Once
again, the Bush administration testified very strongly in
support of the treaty. On that occasion, as I recall, the
treaty received four negative votes in committee, but it went
to the floor with a pretty good majority. And Senator Harry
Reid, now the Democratic majority leader, did not find it
convenient to take up the treaty.
The question that was raised by Secretary Rumsfeld and in a
way by both you, Mr. Bellinger, and Ambassador Negroponte, is
an interesting philosophical one that I made note of. On the
one hand, and this really is not only President Reagan's
viewpoint, the statute was quoted by Secretary Rumsfeld.
Essentially, the question is, Is there such a thing as the
internationalization of the seas? Is this something that
belongs to all mankind? Suppose maybe someone might stretch
this some day and argue that the atmosphere belongs to all
mankind.
On the other hand, I received a letter, which maybe other
members of the committee have, from Mr. Bob Stevens over at
Lockheed Martin. I quote this part. It says, ``The multibillion
dollar investments needed to establish an ocean-based resource
development business must be predicated on clear legal rights
established and protected under the treaty-based framework of
the Law of the Sea Convention, including the International
Seabed Authority.''
So, on the one hand, you could take a position that the
ocean, whether it is close to our shorelines, 200 miles or not,
is nobody's business. In essence, there is no idea of
internationalization. Nobody owns it. It is just simply a
question of whether you want to go out and drill or not and
take your chances.
But what Mr. Stevens is saying is that as a practical
matter in terms of American businesses, very few such drillings
are going to occur that involve hundreds of millions of
dollars, if not more, without some legal basis, some assurance,
some treaty, as a matter of fact, that protects their ability
to do so. We can talk about all of those mineral resources
being out there until we are blue in the face, but the facts
are that there is very little drilling for them without people
feeling very precarious about it. And American businesses among
them are saying if we are serious about energy resources,
energy independence, and our own security, then we need this
framework.
It is a legitimate argument as to whether anybody owns
anything here. All I am saying is the treaty provides a
practical means by which we might proceed in this world and
particularly in this country, given the resources and the
investments that we have.
I come back to this with questions to those of you who have
been testifying about this. I think it is a central issue in
this. I would say, Secretary Rumsfeld, you have been I think
fairly even-handed in discussing philosophically the question.
But how do you come down on the question of Mr. Stevens'
letter?
Why would Lockheed Martin proceed without there being at
least the assurances provided by Law of the Sea?
Mr. Rumsfeld. Well, I don't know if they would proceed. But
it seems to me that a businessman makes a cost and a benefit
and risk analysis. They want as much certainty as they can get.
And there is no question, but it is perfectly logical for
businesses in this instance to prefer certainty.
On the other hand, businesses all the time enter into
uncertain investments. And, at some point, they decide that the
risk is realistic for the investment and they go right ahead
because there is nothing preventing them from doing that.
Second, I haven't thought about this, but having been in
business, seems to me the easiest thing in the world if
somebody really wanted to do it, the American companies have
the technology. They are skillful. They have resources. And
they can always do a joint venture with another company that is
a member of the Law of the Sea. I don't know why they couldn't.
Maybe they can't.
Maybe they wouldn't get a license if it was a joint
venture. But I don't know the answer to that question. But
there is nothing that I have seen that legally in any way
prevents them, other than their assessment, as the chairman
said, of what the risk is. And that is fair.
Senator Lugar. Well, of course, that is a good statement.
But the point is that companies are not taking the risk. We
keep asking American investors to find more energy and to at
least deliver us from the reliance we have had on Middle
Eastern oil, for example, or other situations.
And businesses could take that risk.
It is an interesting equation that perhaps you tie up with
somebody who is a Law of the Sea Treaty person. But this then
really does legitimize in a way the Law of the Sea. You are
using the Law of the Sea once again to make possible the lack
of risk for an American business and sharing whatever profits
there may be. Already objection has come that the sharing of
royalties is not in our interest even though that has been
downsized over the course of time.
But how did the Bush administration come in 2002 to the
thought that this should be the prime treaty? Why was there a
change of view at that point?
Mr. Bellinger. I guess that would go to me. My job, one of
my responsibilities as NSC legal adviser--although after 9/11
we were mostly focused on other things, like terrorism--was, in
fact, to look at all of the treaties that we had inherited from
the Clinton administration that were before the committee here
and decide which ones were our priorities.
And we took a really good scrub at it. Any administration
does. They are not confident in the priorities of the last
administration, and we knocked a number of things off the list.
The Law of the Sea Treaty we were particularly skeptical
of. There were lots of people in our administration, and we had
a lot of internal differences about whether this really was the
right thing. And it took us close to a year, until February
2002, to move it to the top of the list.
I wouldn't say it was the administration's top treaty
priority. We didn't rank them 1 to 100. But we said that this
was a treaty that was a priority that the Senate should act on.
And just to summarize, there were the military advantages,
particularly after 9/11, when we were asking our military to do
more with less, and it was easier to rely on a legal right. And
I think Secretary Rumsfeld acknowledges that part. But the
economic and business advantages were things that just could
not be gotten in other ways.
If there was another way to do it, I think it would not
have been--that would not have been a good argument. But we
couldn't see another way for American companies, particularly
as the Arctic opened up and enormous advantages were there for
us, and we were watching Canada, Russia, Denmark, Norway, all
making billions of dollars.
Norway has a sovereign wealth petroleum fund of $700
billion that it has gotten for its people from oil and gas up
in the Arctic. And so, we see what they have been doing up
there and said for our companies to be able to do this, we need
to become party to the treaty.
So that was an additional benefit. And then there were
environmental benefits as well for the health of the world's
oceans.
Senator Lugar. Thank you very much.
The Chairman. Thank you, Senator Lugar.
Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
I won't go into what I did this morning when we had the
generals there. I say to you, Secretary Rumsfeld, I commented
from my experience in the military that we have a chain of
command, and it is kind of interesting all of these people, and
this morning we had actually 24 stars before us. And yet I
submitted a letter of 33 stars who are retired.
It seems like once they retire, things kind of change. And
I always suspected that was a little bit had to do with the
chain of command. Of course, President Obama is the--and before
him, of course, President Bush was commander in chief.
The Chairman. Can I just say to you, Senator--no, I will
give you your time. I am not going to invade your time. But you
are impugning the integrity of their testimony this morning.
Senator Inhofe. No. No, I am not.
The Chairman. Each of them said they were there personally.
It was their personal belief. No one twisted their arm, and no
one requested them otherwise. And to suggest otherwise----
Senator Inhofe. OK.
The Chairman [continuing]. Is not to believe----
Senator Inhofe. Not suggesting otherwise. I know the chain
of command. That is all.
I would ask you, Secretary Rumsfeld, how does it serve our
national security interests to send nonappropriated,
essentially entitlement spending to an international
organization from payments that would go to countries but would
come from us? Is there any way you can see somehow that
enhances our national security?
Mr. Rumsfeld. No, Senator. I think what the admirals and
generals testified to was narrowly their interests that relate
to the Department of Defense.
Senator Inhofe. OK.
Mr. Rumsfeld. And they clearly did not get into anything
that is broader----
Senator Inhofe. Yes. In fact, I wasn't surprised that they
wouldn't want to get into that.
Mr. Rumsfeld. Right.
Senator Inhofe. But I would like to ask you, Mr. Groves, I
presented the case on two of these hearings now that I am still
waiting to see if anyone really disagrees with it, and that is
under our royalties currently, the royalty percentage ranges
between 12.5 and 18.75 percent. That varies because of the
point at which a company is not willing to go in and risk its
capital to go after. That is the main reason we have a range
instead of a specific amount.
The 7 percent, granted, it wouldn't happen for 12 years.
But at that point, it would. And while you said in your
testimony, Mr. Groves, that there is no way to try to predict
exactly what that would be, the U.S. Interagency Extended
Continental Shelf Task Force said it would be billions, if not
trillions.
So I felt that maybe a trillion dollars as an example would
not be unrealistic. Would you like to comment in terms of that,
the amount of money that we could be talking about here?
Mr. Rumsfeld. It sounds to me like we may have mixed the
royalties that relate to the 200-miles area, as opposed to the
deep seas.
Senator Inhofe. No, I am talking about the Extended
Continental Shelf.
Mr. Rumsfeld. Right.
Senator Inhofe. Yes, because I----
Mr. Rumsfeld. As I understand it, the other hasn't even
been set, has it?
Senator Inhofe. But the reason I am asking the question is
many are saying here, and they have said at both of these
hearings, that without this we can't get in and develop the
Extended Continental Shelf. That is a question I would like to
have you address.
Mr. Groves. Right. The major take-away you should have here
is that we don't know how much money is really at stake.
Senator Inhofe. That is right.
Mr. Groves. I mean, there has been no study about the value
of the hydrocarbon resources that are on the U.S. ECS, which is
vast. It is twice the size of California. Starts on the east
coast, goes to the west, up to Alaska, and down in the South
Pacific.
And yet we can sit here today and have no idea how much oil
and natural gas is out there, and yet pledge to sign on to a
treaty that would commit us to paying between a 1-percent and a
7-percent royalty on those hydrocarbons forevermore. So that
doesn't sound to me like a very fiscally responsible thing to
do when we don't even have the first clue about how much is out
there.
Now the ECS Task Force has put the only number out there
that I have ever found, which, as they said, could be trillions
of dollars. Trillions, with a ``T'' and plural. So we know, at
least from a gross estimation, that we are talking about a
significant amount of money.
But until that study is done, until we have even the
slightest idea of how much money we could be giving up for this
treaty, I don't think it is very responsible or prudent to
accede to it.
Senator Inhofe. I would agree with that. A lot of
discussion has been on the--talking about a place at the table.
I contended this morning that I am not sure where the table is.
I mean, we have the IMO, and apparently, it has performed well.
What I would like to have you do, Mr. Groves, is talk a
little bit about the differences between the Council and the
Assembly and how veto works in this respect.
Mr. Groves. Sure. The International Seabed Authority, or it
is called ``The Authority,'' is made up of a Secretariat, it is
made up of a Council of 36 countries, and it is made up of the
Assembly of 162 countries, and that is called the ``supreme
organ'' of the Authority.
Now there are a couple of narrow questions. Narrow, but
important questions that the Council can make recommendations
on that the Assembly must consider. One of those is the
distribution of these article 82 royalties. But what has been--
what is basically the ability to block consensus has been kind
of transmogrified by proponents of the Convention into this
blanket veto power that the United States would have over the
entire operations of the authority, when, in fact, it is a very
narrow ability.
And if we have the ability to block consensus on the
Council, so do the other 35 members, including my favorite
member, Sudan. But between the two bodies, when you have got a
council that is making recommendations about the distribution
of article 82 royalty and you have got an assembly, which is
the supreme organ making the final decisions about the
distribution of those royalties, we know in the end who is
going to win that discussion, regardless of whether there is
some balance of authority between the two bodies.
We know that because we've studied other international
organizations in a multitude of contexts.
Senator Inhofe. Well, it would seem to me that it is kind
of not all that significant to be talking about that anyway.
The big issue is they have the power to extract that money that
otherwise would be royalties to the United States.
Mr. Groves. Yes, sure. Before we are talking about this
supposed veto, we have already committed to make all of those
article 82 royalty payments to the Authority for
redistribution. So, for me, I think the horse is already out of
the pen.
Senator Inhofe. I noticed during the previous--yes?
Mr. Rumsfeld. A comment. The word ``veto,'' I think, is a
little confusing in the sense that it leaves the impression
like our Constitution where a President can veto something, or
it leaves the impression that like the United Nations, where we
and other countries have a veto in the Security Council.
In this instance, it is much more like our role in NATO,
where I served as Ambassador I guess 40 years ago, where it is
operated by consensus. And watching how that works is really
quite different from our Constitution or even different from
the U.N. Security Council.
A second point on the military issue that you raise. Again,
I am no expert, but I read this about the military activity
exemption. My impression is there is no definition of the so-
called ``military activity exemption'' and that the structure--
the executive, legislative, and judicial structure that Mr.
Groves described--would be where the definition of that phase
would eventually be decided.
And, if you think about it, a military activity can
simultaneously be an economic activity and an environmental
activity. I can remember we had lawsuits against us when I was
serving as Secretary of Defense the second time because SONAR
was adversely affecting whales.
And you can end up with a series of problems where people
contest this because of the lack of a definition, it would seem
to me. And frankly, I don't think I am smart enough to know
what that definition could be without leaving enormous areas of
ambiguity.
Senator Inhofe. Yes. I do remember that discussion. And Mr.
Groves, I noticed you were making some notes and had some
comments on responses from some of the witnesses. Is there
anything that you would like to add right now in this time that
might be helpful to us?
Mr. Groves. Oh, boy. Such a great open-ended question.
Well, I think I would just like to debunk the idea that there
are oil companies that are waiting for us to join this treaty
in order to engage in exploration of our Extended Continental
Shelf.
There is a chart in my testimony--I have got it, the one
that looks like this--that indicates all of the areas of the
Extended Continental Shelf in the Gulf of Mexico that the
United States has already leased out to American and foreign
oil exploration companies. So the idea that this is going to be
some great prohibition on this development is something that I
don't agree with.
These companies have made the business decision to buy
multimillion dollar leases from the U.S. Government to go out
on the Extended Continental Shelf, regardless that we are not a
party to this treaty and whatever international certainty that
comes along with it.
So if there was one thing I would add, I would just add
that.
Senator Inhofe. I appreciate that. And Mr. Chairman, I
appreciate the time. But one last thing, Are there any
frailties that you can think of in the IMO, something that
hasn't worked in the past that would be corrected by this?
Mr. Groves. The IMO is the forum where all of the things
that the proponents allege are being discussed at the Law of
the Sea meetings are actually being discussed.
Senator Inhofe. That is the real table when you say a place
at the table?
Mr. Groves. That is correct. That is where they are drawing
the traffic separation schemes and the archipelagic sea-lanes
through Indonesia and discussing treaties and other
environmental obligations. That is where actual multilateral
decisions are made, in that forum.
Senator Inhofe. Thank you, Mr. Chairman.
The Chairman. Before I recognize Senator Isakson, I just
think it would be helpful for the record. Mr. Bellinger, do you
have any comment with respect to the argument on the Outer
Continental Shelf?
Mr. Bellinger. This is the point on Mexico?
The Chairman. The argument that Mr. Groves just made with
respect to the ability to exploit and the royalties issue.
Mr. Bellinger. Yes, well, I think this is perhaps the most
important question for the Senate really is the suggestion is
that if we don't join the Convention, then we still get all the
benefits. And so, it is a choice between joining a flawed
Convention or not joining the Convention, and then U.S.
companies still get to do all those things and they don't have
to pay anything.
But that seems to me a false choice, at least based on what
companies have been saying to us. It is not, do the royalties
flow to the ISA or to the Treasury? Of course, if I had that
choice, I would much prefer to have all of the royalties paid
to the Treasury.
But the choice seems to be companies will either mine in
the deep seabed and in the Extended Continental Shelf and are
willing to pay a small amount of royalties after 5 years or
allow the U.S. Government to do it, or they won't do it at all.
So the choice is either lots of royalties for the Treasury and
lots and lots of money for U.S. companies and some small amount
that goes to the ISA, or nothing at all. That seems to be the
choice that is confronting us.
The Chairman. I see you were taking a deep breath. Were you
about to--did you want to add to that, sir?
Ambassador Negroponte. I would say that this argument is
particularly pertinent with respect to the Arctic, and I
represented Secretary Rice at one of the Arctic Circle
conferences with the Russians, the Danes, the Norwegians, and
the Canadians. And it was clear that this is one area where our
companies do feel inhibited from exploring and exploiting
beyond 200, where we may have Continental Shelf that extends as
far out as 600 miles in the Arctic Ocean.
So I think it is important that that issue be resolved, I
believe, for our----
The Chairman. We will come back to that. I want to come
back to that when we get into the second round.
I would just say to Mr. Groves, you are right. They are
buying some leases, and they are very smart to do so. But there
is a huge gulf between buying the lease and sitting on it.
There are a whole bunch of leases down in the gulf that have
been owned for years, but they don't exploit them. They are not
buying them and drilling.
And the differential is the capitalization that it requires
to exploit, and that is really where the nub of this is. But we
will come back to that. I want to come back to that if we can.
Senator Isakson.
Senator Isakson. Thank you, Mr. Chairman.
And I apologize that I am late, and I apologize to the
panel that I am late. I really have a compliment and then one
question that is, I think, significant.
But I want to thank Secretary Rumsfeld and Ambassador
Negroponte for their service to the country. I remember
Secretary Rumsfeld's transformation of our military and how
well it prepared us for the unseen events of the last decade. I
saw John Negroponte in Baghdad in the most difficult days of
our conflict there, and both of you deserve tremendous credit
for your service to the country.
My question is to Mr. Bellinger and Mr. Groves. I am not an
attorney. I love listening to attorneys going back and forth.
But I have a University of Virginia law school student who is
an intern for the summer. So I posed to him this question of
the veto. I said, ``I want you to research this thing and read
this thing, and I want to talk about the veto for a second
because some people say we have got a veto, and some people
says, well, now you see it and now you don't.''
He did a beautiful paper for me, and I want to read two
quotes from the treaty, and then I would like both of you to
comment on it as it relates to this question of do we have a
veto or do we not?
One is that the veto is the absence of any--I mean, the
consensus, as defined by the treaty, is the absence of any
negative objection or formal objection from the members. Is
that correct? Which means if there was a proposal before either
the Council or the Assembly, as long as nobody objected, then
they had consensus and they could move forward.
But if one member of the 35-member Council objected, then
what do you do? And I want to read this sentence. ``If all
efforts to reach a decision by consensus,'' which is nobody
objecting, ``have been exhausted, decisions on questions of
procedure in the Assembly shall be taken by a majority of the
members present and voting, and decisions on questions of
substance shall be taken by two-thirds majority of members
present and voting.''
That says to me that we may have a veto to stop something
from move because we can stop consensus, but the veto can be
overridden by a two-thirds vote of the full Aassembly or by a
majority vote of those voting in the Council. And I just would
like both of you to comment on am I right or is my law student
right, or am I wrong or is my law student wrong?
The Chairman. Before--can I help your law student a little
bit?
Senator Isakson. I am not mentioning his name. I don't want
to get him in trouble. [Laughter.]
The Chairman. Well, I don't want to get him in trouble
either. But he is actually taking that from the 1982 original
agreement and not from the agreement as amended.
Senator Isakson. Well, good. That is the kind of
information I am looking for. So I would like to hear from both
of you.
Mr. Bellinger. Well, I have the greatest respect for the
University of Virginia, where I have my own master's degree
from. So, and I love University of Virginia law students. But I
would say that the longstanding position of both
administrations, in fact, multiple administrations, on this
very point is that we fixed the problem in the Council voting
to give the United States the predominant voice.
One, we are a permanent member of the Council. So we are
the only country that is a permanent member of the Council. And
two, the Council has to be the one to make decisions on
administrative, budget, or financial matters. And on the
sentence that you just read where ultimately there is not
agreement and it gets referred back, you did not mention the
clause that says--and this is in section 3, paragraph 5,
``Except where the Convention provides for decisions by
consensus in the Council.''
And so, the United States is always in the Council. We are
always the permanent member. Section 3, paragraph 2 says the
decisionmakings and the organs of the Authority should be by
consensus. The clause there says that except where the
Convention provides for decisions by consensus in the Council,
which refers to administrative, budgetary, or financial
matters.
So the United States would have a veto over any decision
relating to administrative, budgetary, or financial matters,
which would include the distribution of fees. So that is why we
believe, the Bush administration, which looked at this,
believes the United States would have the critical role in
deciding where any of the fees went.
And I believe that Mr. Groves conceded that point. But even
if he didn't, that is our interpretation. And I can see this is
why you love lawyers.
Mr. Groves. I am a lawyer, and I don't concede anything,
John. Actually, I am a recovering lawyer.
Now there is no doubt what the treaty says in the black
letter law of the treaty when consensus can't be reached, and I
would concede that if the United States was a party of the
treaty and on the Council that it could muddy that up and block
consensus on some important issues.
The important part is what the treaty is silent about,
which is what happens where no consensus can be reached on the
Council at all. Let us say, hypothetically, because the United
States is putting its foot down on something regarding
royalties.
And from the silence of the treaty, the only rational
explanation is that the Assembly could act by passing a
resolution without the recommendations of the Council. You see,
at the end of the day, article 82 royalty distributions, the
Council only makes recommendations to the Assembly, and it is
the Assembly that makes the final decision.
And the reason why we know this to be true is that further
on in the article in the 1994 Agreement, it says that the
Council's decisions on financial matters shall be based on the
recommendations of the Finance Committee. So if the Council has
to be basing their recommendations on the recommendations of
the Finance Committee, then it goes all the way down the line.
At one point or another, someone is going to make a
decision. We see this in international organizations all the
time. And from my view, especially with the silence of the
treaty, it is going to be the supreme organ of the Authority,
the 162-member Assembly, that makes that decision.
Senator Isakson. Mr. Chairman. Mr. Chairman, you were
commenting about the 1994 Agreement, and I think that you are
talking about the title or part 11, which was the subsequent
amendments the United States proposed. Is that correct?
The Chairman. That, but also I think in 1994--on page 272,
section 3, decisionmaking, it actually gave us protection. I
will read it to you. ``Decisions of the Assembly''--and this
goes to Mr. Groves' deep concern about the Assembly and what
the Assembly might do. The achievements, what we achieved in
1994 through the implementing agreement, which is very
important, made clear that the Assembly is not permitted to
take action on any matter within the competence of the Council
unless the Council has first recommended that the Assembly do
so. So the Council controls the agenda.
Now let me read right out of it. ``Decisions of the
Assembly on any matter for which the Council also has
competence,'' and that is laid out, and that is the
distribution revenue and a whole bunch of other things. So the
competence is in the Council. ``Any decision for which the
Council has competence or on any administrative, budgetary, or
financial matter shall be based on the recommendations of the
Council. If the Assembly does not accept the recommendation of
the Council on any matter, it shall return the matter to the
Council for further consideration. The Council shall reconsider
the matter in the light of the views expressed by the
Assembly.''
In other words, it is a round robin. Council has the final
say. Council has the original say, has to go back to the
Council. There are serious limitations on it. And the Assembly
effectively does not have this fearful power to come in and do
something that you might be concerned about.
Now I might also add if you don't like what it is doing--I
mean, we can come back to this. But let us say you get your
businesses out there, and suddenly, the royalties are being
produced. And all of a sudden, it is a bonanza, and you get a
trillion dollars. And we can come back to that in a minute.
Article 317, page 208, ``A state party may, by written
notification addressed to the Secretary General of the United
Nations denounce this Convention and may indicate its reasons.
The denunciation shall take effect one year after the date of
receipt of the notification.''
In other words, you can just get out of it. You are not
bound to trillions of dollars. You are not locked in for a
lifetime. Just leave. If you don't like what it is doing and it
is acting against our interests, you get out of it.
So, I mean, this is really not as complicated as it is
being made, but we ought to continue to go at it.
Mr. Groves. If I may just comment briefly, Mr. Chairman?
The Chairman. Yes.
Mr. Groves. First, on the Council issue. Yes, the language
says that any of these administrative, budgetary, and financial
matters shall be based on the recommendations of the Council.
But just three paragraphs later, it says decisions by the
Assembly of the Council having financial or budgetary
implications shall be based on the recommendations of the
Finance Committee.
So if it is----
The Chairman. That is correct. We are a member of the
Finance Committee.
Mr. Groves. But we can't block consensus on the Finance
Committee.
The Chairman. I believe we can. You want to speak to that?
Mr. Bellinger. We are also a permanent member of the
Finance Committee, and we can block or control the Finance
Committee. These were really the great changes that the United
States made.
The Chairman. It is also stated----
Mr. Bellinger. Let me just add one thing, if I could,
Senator? Two things, really, for Senator Isakson. It is really
quite useful.
A paper was done by one of our negotiators, which I would
encourage your staff to look at--Bernie Oxman, back in 1994--
that described how all of President Reagan's concerns were
fixed by U.S. negotiators and how they ended up giving the U.S.
enormous influence over every one of these issues, including
the permanent seat on the Council and the effective veto. And I
will ask that that could be put into the record.
Mr. Bellinger. One of the most interesting things about
that, for both of you, is that Russia was so concerned that the
United States was given so much influence in the Council that
they refused to sign on and actually abstained from the vote
over the 1994 amendments because they felt that they
discriminated in favor of the United States.
Mr. Rumsfeld. Mr. Chairman, may I make a comment on this?
The Chairman. Absolutely. Yes, sir, Mr. Secretary.
Mr. Rumsfeld. As a law school dropout, I am glad I wasn't
asked to comment. But I have a question about the 1994
amendments. They have been mentioned repeatedly, and I don't
have any idea what their standing is, given the fact that a
number of countries have not signed onto them.
Second, one of the big issues for President Reagan was
technology transfer, and that was addressed in the amendment.
And as I recall, it went from mandatory technology transfer to
a recommendation that technology transfer occur from the
developed countries to the developing countries. I forget the
precise language, but it is something like that.
It seems to be that it is entirely possible, and I would be
happy to hear the experts on the subject, that in applying for
licenses, the decisions with respect to licenses could be
dependent on the degree of accommodation a company is willing
to make with respect to technology transfer.
So when we say that the Reagan concerns were fixed, they
were addressed for sure and in some instances fixed. But I
think in some instances, we punted.
The Chairman. I would let the experts speak to that, the
people who were there during that time. I think that is
important.
Mr. Bellinger. I will take a stab at that. Again, these
issues are addressed at length in Professor Oxman's article,
which describes all of the 1994 changes. The tech transfer
requirements, of course, were dropped. The production
limitations were dropped. The barriers to access to deep seabed
mining were dropped.
And the idea that the authority could actually decide who
could get mining rights and who couldn't, which was really one
of our concerns that we would have this group of countries that
would look at U.S. mining companies and say, ``Well, we don't
really like you'' was also dropped. And U.S. companies were
actually grandfathered in so they would not have to make some
of the same showings that other companies around the world
would have to show. That was one of the reasons for the Soviet
protest.
Mr. Groves. It is another reason why Lockheed has little
objection to the treaty.
Mr. Bellinger. And in addition, there would not be an
evaluation of the technical qualifications of applicants. It
would be based on a first-come, first-served basis as long as
people met basic financial qualifications.
Senator Isakson. Mr. Chairman.
The Chairman. Yes, sir.
Senator Isakson. I stirred up far too much of a hornet's
nest.
The Chairman. On the contrary, I think, actually, you have
helped clarify significantly some very important areas. And if
I could just take 30 seconds to add so that it is in the
record, I really want it to be in the record in this part.
Page 279, section 9, subsection 8, says, ``Decisions in the
Finance Committee on questions of procedure shall be taken by a
majority of members present and voting. Decisions on questions
of substance shall be taken by consensus.''
I can't think of an agreement, I can't think of an
international treaty in which the United States of America has
the only permanent seat and the ability to block anything and
protect our interests and, if we don't like it, can get out of
it. So I think it is important to have that in its proper
context.
Senator Isakson. I will just take 1 minute. This is a very
critical question, which is why I asked it, and I appreciate my
UVA law student doing such a good job. He got everybody
engaged.
But everybody has to remember they are communicating with a
University of Georgia Business School graduate when they are
talking to me, and I would like to ask Mr. Groves and Mr.
Bellinger, if you wouldn't mind, to try to give me a one-pager
that addresses this issue of consensus and veto and majority of
the members present voting to override or two-thirds to
override. If you could do that and how it applies,
understanding the 1994 amendments that may have taken place.
And one other question, Mr. Chairman, and don't respond to
this because I know it will drag it out. But I was reading
paragraph 4 as you were reading it. But paragraph 5 is still in
this book, and I need to know if the 1994 treaty extracted
paragraph 5, which refers to the majority of those voting,
present voting, and refers to the two-thirds majority.
We won't get into that debate now, but I would like to know
that.
The Chairman. Fair enough.
Senator Isakson. I apologize.
The Chairman. No, I think it is a terrific request, Senator
Isakson. I think it is very important, and we will look for
that full explanation. I think it would be very helpful to the
committee, indeed.
Mr. Groves. To the extent that anything in Law of the Sea
can be distilled to one page, we will do our best. [Laughter.]
The Chairman. Thank you.
Senator Lee. Thanks for your patience.
Senator Lee. Thank you, Mr. Chairman.
And thanks to all of you for your service today to this
committee and for your service to our country.
Mr. Bellinger, I wanted to start just by asking a basic,
fundamental question about something this treaty does. By
creating a royalty obligation as to the exploitation of
minerals from the seabed outside of the 200 nautical mile
range, aren't we creating a construct that recognizes ownership
or at least a degree of sovereignty in an international
organization? Isn't that what the word ``royalty'' implies?
If somebody can charge a royalty for the exploitation of
minerals on any property, doesn't that imply that they own that
land or at least that they possess the sovereign, the incidence
of sovereignty with respect to that land?
Mr. Bellinger. I wouldn't say so. I think I would just see
that as a fee that the United States has agreed to, to mine in
that area.
Senator Lee. So if you own land, and ExxonMobil wants to
develop oil on that land, and I say I am going to charge you a
royalty for exploiting this resource on Mr. Bellinger's land,
wouldn't I be implying that I have some sort of ownership or
sovereign right with respect to that land?
Mr. Bellinger. Well, again, not necessarily. I think that
it is something that was agreed to in the treaty without a
broad philosophical construct of the significance of what it
meant for a royalty provision. I mean, as you know--because I
know you have a long legal pedigree--that property rights and
bundles of sticks can get to be very complicated as far as what
is actually a property right, and it can be used in different
contexts and different things.
And it is the same with respect to treaties. So simply that
we agree to pay something here does not mean that we are
conceding that the international community owns the Extended
Continental Shelf.
Senator Lee. OK. But we are creating an interest, a
financial interest of one sort or another. One that could be
construed as a property interest.
I appreciated your acknowledgment with regard to Senator
Risch's comments on article 222, that as I believe you
acknowledged there was at least an ambiguity there as to the
meaning of the word ``applicable'' and the phrase ``implement
applicable international rules.''
If there is at least an ambiguity there, wouldn't that
suggest that an international arbitration panel, perhaps one
convened pursuant to annex 8 under the treaty, could also
conclude that there is an ambiguity there, and they could
decide that issue one way or the other?
Mr. Bellinger. I guess I would say on that, Senator, I
would think not. I mean, I think it is a good question for
someone who is reading that provision. But I can tell you as
someone who spent a lot of time reading treaties, particularly
ones that were allegedly--I mean, honestly, this was my job for
4 years as legal adviser, to defend against other countries who
claimed that certain things were applicable to the United
States.
And applicable means that we are legally bound by it, not--
--
Senator Lee. If we get a good arbitration panel, if we get
at least three who are well trained, who are doing it right,
doing it the way that we would like it to be done, your
position would be that they are going to reach the right
conclusion?
Mr. Bellinger. I certainly think it is pretty clear that
``applicable'' international obligation means something that is
we are legally bound by.
Senator Lee. OK. Thank you.
Secretary Rumsfeld, I recently had a retired Navy commander
in my office. He made the following statement regarding this
treaty. He said we should not in any way restrict the ability
of the U.S. Navy to serve its primary purpose--protecting the
Constitution of the United States of America against all
enemies, foreign and domestic.
Ratifying the U.N. Convention on the Law of the Sea will
expose the U.S. Navy to unnecessary, counterproductive, and
extraconstitutional bureaucratic and regulatory oversight. Do
you tend to sympathize with that statement?
Mr. Rumsfeld. Well, I have to confess I can't look around
all those corners, but we have seen an explosion of litigation
in the world. I don't know how many lawsuits have been filed.
But every time anyone in the U.S. Government turns around,
they get lawyered up. There is something like 10,000 lawyers in
the Department of Defense today. And I don't doubt for a minute
that that could happen.
It seems to me that the--I watched some of the military
panel this morning. And they are wonderful people, and they are
talented. As they said things, I did not hear a lot of
instances as to why we believe that with this, the Chinese or
the Iranians, for example, will alter their behavior notably. I
just didn't.
The Law of the Sea has been around. They haven't solved
some of the problems in the South China Sea. China and the
neighboring countries are members. And in terms of dispute
resolution, I haven't seen it.
In direct answer to your question, it seems to me that
anything that they said that they believe this treaty could or
should do that would benefit us--and there is no doubt in my
mind but there is certainly some things that it would with
respect to the military--the question is what is their weight
against some other aspects of it, the disadvantages?
It seems to me then the United States of America ought to
pursue those on a bilateral or a multilateral basis if they are
as important as they say. And I don't doubt for a minute that
the very credible military officers were making points that
were valid that could be pursued bilaterally or multilaterally.
Senator Lee. And at the end of the day, Mr. Secretary, any
legal rights, legal protections that we have, to the extent
they have to be enforced, would have to be enforced through our
own military might, would they not?
Mr. Rumsfeld. Regardless of whether you are in the treaty
or not.
Senator Lee. In the treaty or not. OK.
Mr. Groves, would you agree with that assertion? In the
treaty or not, legal rights, legal protections that we have,
whether we draw them exclusively from customary international
law, as we would were we not to ratify this treaty, or if we
were also to draw additional rights or perhaps same set of
rights from the treaty. Don't those have to be enforced, to the
extent they have to be enforced, by our military?
Mr. Groves. I would agree with that, and I think that the
members of this morning's panel would agree with that. They
have said, in no uncertain terms, that when push comes to
shove, we are going to assert our rights. We are going to
assert our power. We are going to project our power.
And we hope that they will do so whether or not they are in
any treaty or not to protect American national security
interests. Their only argument is that somehow being inside the
treaty will enhance their abilities to do so. I just haven't
seen where that enhancement lies.
Their diplomatic protests would be the same. The same
language. Their operational assertions would be the same. None
of those things would change. But somehow they are making a
claim that I just haven't found the substantiation for yet that
it enhances their ability to perform their mission.
Senator Lee. Thank you. Let me follow up with an additional
question I wanted to ask of you, Mr. Groves.
Let us suppose that we get into an international
arbitration, pursuant to, say, annex 8. We choose two
arbitrators. Our opponents choose two arbitrators. We can't
agree on the fifth arbitrator. So the fifth is chosen by the
U.N. Secretary General.
At the end of the day, three of the five arbitrators rule
against us. They rule against us on a theory that we think is
legally deficit. We think is wrong. It is against us. We don't
like it.
Is that judgment--notwithstanding our objections to it,
notwithstanding the errors that we see in it--is it enforceable
in U.S. courts?
Mr. Groves. It is enforceable on U.S. territory because
that is what the treaty says it is. And we have got at least
one Supreme Court Justice who says so in dicta in the Medellin
case. He discussed how decisions made by UNCLOS tribunals would
be enforceable in U.S. territory.
Senator Lee. Referring to Justice Stevens' opinion in
Medellin. Is there anything about our rescission from the
treaty, from the Convention, which couldn't become effective
until a year after we have provided notice anyway? But is there
anything about our withdrawal from the treaty, from the
Convention, that would affect the validity and the impact of
such a judgment after the fact?
Mr. Groves. Under international law, no. And we are
actually dealing with that issue right now in the Avena case,
regarding the Mexican death penalty cases that was litigated
through our system as Medellin v. Texas.
We withdrew, the Bush administration withdrew from the
optional protocol to the Vienna Convention on Consular
Relations after they got a really bad judgment from them. But
the judgment of the International Court of Justice in that case
is still pending. It still has legal force and effect because
we were under its jurisdiction when they made the judgment,
regardless of our subsequent withdrawal.
Senator Lee. Almost 30 years ago.
Mr. Groves. The Avena case was during the Bush
administration. You might be thinking of the Nicaragua case
during the Reagan administration.
Senator Lee. Indeed. Thank you very much. I see my time has
expired.
The Chairman. Thanks, Senator. I appreciate it.
Senator Lee, you might be interested to know that the U.S.
Senate has already approved a treaty that has the exact same
procedure in it, and that is the--we gave our advice and
consent to it in 1996. And not only does it subject the United
States to arbitration, but in fact, it subjects us to
arbitration under the Law of the Sea Convention.
Senator Lee. May the Senate not err twice.
The Chairman. Ratified. It seems to be working pretty well
without problems. That, incidentally, was passed out under
Chairman Jesse Helms. So----
Yes, Mr. Negroponte.
Ambassador Negroponte. Senator, I just had one point that I
wanted to make with respect to how adhering to the treaty might
be helpful in some circumstances with respect to our naval
activities and operations and Coast Guard. And clearly, when
you boil it down to a polar choice between the use of force and
the application of law, well, the application of American
military force is likely to win every time. I don't question
that.
But let us take the Proliferation Security Initiative, for
example. There are instances where countries, friendly
countries, have either had reservations and may even in some
instances have declined to cooperate with us on a particular
PSI mission because we are not party to the Law of the Sea. So
that is an example of where I think the cooperative atmosphere
on an issue of real security importance to the United States
could improve if we accede to the treaty.
The case of China and their exaggerated claims to the South
China Sea, they are out of sync and out of line with the Law of
the Sea because of the way they draw their baselines and their
historical interpretation of their jurisdiction over those
seas. And the best arguments are that they are not applying the
principles that are embodied in the Law of the Sea.
Well, we are disadvantaged in making that argument to them
and along with other countries in Southeast Asia because we are
not parties to the Convention. So, I mean, I can think of a
number of instances where the application----
And then the last one I guess I would cite is the passage,
free passage through straits. I think we got--I mean, that was
a really major accomplishment in the Law of the Sea Treaty.
Think of the complications we might have if we developed an
antagonistic relationship with a particular country that
decided it wanted to make it difficult for the free navigation
through straits for either surface or other kinds of vessels.
So those are three examples I can think of where the
treaty--and I don't think it is wrong for Mr. Groves to use the
word ``enhance.'' But diplomacy has its limitations, but it can
still be positive. ``Enhance'' is a positive word.
Senator Lee. Thank you.
The Chairman. Well, let me wrap this up a little bit, if I
can, because we are under certain time constraint here.
First of all, you all have been terrific, and I mean
everybody. I think it has been very, very helpful to have this
kind of back and forth.
I would just say to Senator Lee and some of the others and
Mr. Groves that you are operating on the principle that the
United States has already established full jurisdiction and
control over the Extended Continental Shelf. And I see you
nodding to say that. And you point to the 1945 proclamation by
Harry Truman regarding the Outer Continental Shelf Lands Act.
The problem is that nowhere in that proclamation or
anywhere else has President Truman or anyone else set out the
longitude and latitude markers of the outer edge of our
Continental Shelf. And the only way we can achieve certainty
with respect to those demarcations is through an international
agreement of some kind.
Now we are not going to go on at length about that. I do
want to pursue this, and we may well have some of you back or
all of you back at some point in time here to--when we get this
paper and we get people's answers and we get the answer on the
record.
I am concerned, Secretary Rumsfeld, about a recommendation
for United States businesses to have to joint venture with
another country to exploit our resources or what might be our
resources. That really concerns me. I mean, if you want to talk
about American sovereignty and American interests, I don't want
to share it with another country.
And under this treaty, if you import what you exploit, you
don't have to pay any royalty. Royalty free if you are
importing it to your country.
So that is an extraordinary offering, and it comes to the
real nub of this choice that we face, which I think Mr.
Bellinger put his finger on, which is this is not a choice
between sort of a flawed treaty and what the impact might be,
and do you take some benefits in exchange for that? Or if you
don't do it, you go out and get the same benefits.
I think one of you suggested we ought to be doing these
programs of distribution to these countries through our aid
program. I don't know if you have been following the budget
lately, but we ain't growing our aid programs. We are shrinking
them.
Our influence in the Middle East significantly reduced by
our inability to be able to effect things, our ability to do
counterterrorism, our ability to bring 60 percent of the
populations of some Arab countries out of destitute poverty
because of the absence of anything remotely resembling a
Marshall Plan or anything like it in modern context is
palpable.
Sixty percent of these populations under the age of 25; 50
percent under the age of 21; 40 percent under the age of 18.
Some countries have 4 and 5 percent of their population at 4
years old. And the question is, What are we all going to do
about that?
The idea that there may be some resources coming from
something like this that goes to some of these countries may be
a saving grace. And Senator Lugar has raised this question
about sort of do you maybe get a trillion dollars or whatever
you might get out of it. If you are seeing an untoward
distribution of that, you do have this ability to get out of
it, as I have said.
But the bottom line is this, if we don't do it, there are
no royalties, and there is no guarantee that anybody is going
to drill. And the only reason I can say that to you is that the
CEOs and legal departments of these companies are telling us
that.
Now you can choose not to believe Fortune 500 CEOs and
their stock value interests and all the rest of it. It would be
the first time I have known the Republican Party not to put
some credibility in what they are saying.
But you know, that is the choice here. It seems to me we
have to keep this framed properly. So we will have additional
hearings, and we will continue to explore this.
You all have been enormously helpful in fleshing out a
number of these considerations. The record is getting stronger
as a result in terms of people's ability to make judgments, and
that is what we want to do.
So I am very grateful to all of you for coming. And to both
the Secretaries, we are really pleased to see you continuing to
dig in and to contribute, and we are delighted to have you here
today. Thank you all very, very much.
We stand adjourned.
The record will stay open for a week, as it will from this
morning's hearing, and we will be building the record in a
written fashion also.
Thank you.
[Whereupon, at 4:55 p.m., the hearing was adjourned.]

Letters and Additional Material Submitted for the Record

Letters Submitted by Senator John F. Kerry

Letter From Heritage Submitted for the Record by Senator James E. Risch

Paper by Bernie Oxman Submitted for the Record
by Hon. John B. Bellinger III

THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM
BUSINESS AND INDUSTRY

----------

THURSDAY, JUNE 28, 2012

U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 9:33 a.m., in
room SH-216, Hart Senate Office Building, Hon. John F. Kerry
(chairman of the committee) presiding.
Present: Senators Kerry, Casey, Webb, Shaheen, Coons,
Lugar, Corker, and Isakson.

OPENING STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS

The Chairman. Hearing will come to order.
Thank you very much for being here this morning. Needless
to say, Capitol Hill is filled with a little bit of
anticipation about the Supreme Court decision shortly, and we
are going to prove that we can continue to do the Nation's
business, notwithstanding that anticipation.
I am delighted to have this very significant panel of
business leaders here this morning to further help us evaluate
and think about the Law of the Sea Treaty. And I want to just
say a couple of words at the beginning to put in perspective
sort of what really brought this about, why we are here.
I have been accused of many different reasons. I just read
something the other day in the papers about why this treaty is
sort of here and what it represents, et cetera. And I think
everybody has kind of got it wrong so far.
I was actually out to dinner with Tom Donohue maybe a year
and a half ago or so, and we were talking about a number of
things on the agenda, but particularly energy policy. And at
the very end of the dinner, Tom turned to me, and he said, ``By
the way, when are you going to get this Law of the Sea Treaty
done?''
And I was completely taken aback. It was the last thing I
expected to hear about at the dinner, and I said, ``Why are you
bringing that up? Why is that a concern?'' He said, ``Are you
kidding? I have got a bunch of members who are desperate to get
this thing done so they can go out and explore and mine, do
what is necessary to produce energy for America.''
And so, that is what really flagged it for me, and I came
back and talked to my staff. And I promised Tom that I would,
in fact, look into it and give it a good faith effort. And that
is what really brought us here because I met with various
representatives of those industries and became convinced that
American competitiveness and American jobs were at stake.
We are not here because of any political agenda. We are not
here because the administration decided this was the moment.
This is really coming from America's business community, and I
think people will hear that very powerfully here this morning.
I think there is an urgency to it, and that is what we will
examine today.
We have heard already from our Nation's top military
leaders. The Secretary of Defense, the first sitting Secretary
of Defense testified in favor of it. We have heard from the
Secretary of State and from every past Secretary of State,
Republican and Democrat alike, who have together signed an op-
ed that they wrote, which has been reproduced in national
newspapers, regarding this treaty. We have heard from treaty
experts and opponents, and we will hear from more still. We are
not finished on that score.
Our military leaders have consistently supported the
accession to this treaty for more than two decades now, and
some have argued that we should prefer to rely on customary
international law to protect our navigational freedom. But most
of the national security community completely disagrees with
that and does not believe that we should leave our national
security to an unwritten set of rules, subject to change by
other countries and subject to change at any point in time.
That capacity to have things subject to change also
provides uncertainty to the business community. And as we hear
again and again up here, nothing is more damaging to long-term
business plans and investments, capital formation, job creation
than a lack of certainty about what the rules of the road are.
So, today, we shift away our focus from the military to our
energy and economic security, and we are going to hear directly
from top business and industry leaders who, combined, represent
millions of businesses and jobs. Our companies want this treaty
quite simply, bottom line, because it affects their bottom
lines.
Joining the Law of the Sea will provide benefits to U.S.
business and industry that are not available through any other
means. Just a quick few examples.
Telecommunications industry. As we will hear shortly, we
have vast undersea cable networks, and they provide a backbone
for the world's voice and data networks. When there is a
problem, if a country were to seek to block a company from
laying a cable or impeding the repair of damaged cables, the
Law of the Sea provides redress.
A party to the treaty can bring suit on behalf of its
companies within the context of the Law of the Sea agreement.
But since the United States is on the outside of that agreement
today, we cannot take advantage of this legal roadmap. Our
companies have to piggyback on efforts by governments that are
party to the Convention.
So instead of standing up for our companies when they need
our help, our failure to join the treaty actually forces them
to look elsewhere--greater expense, greater uncertainty, lack
of protection of American sovereignty. The status quo is simply
not acceptable.
Lowell McAdam of Verizon, CEO of Verizon, who I am very
pleased is here today, will go into some of the detail
regarding that. And all you have to do is listen to AT&T, the
telecommunications industry, Verizon, others, all of whom urge
accession to this treaty.
On energy security, people come to the same conclusion. The
United States is blessed with hundreds of thousands of square
miles of Extended Continental Shelf. We can double the size of
the United States, in effect, from what is undersea and
available to us for exclusive jurisdiction, and that will be
critical to our energy security for years to come.
The only way to maximize the legal certainty and establish
clear title over the extended shelf is through recognition by
the Continental Shelf Commission. As a nonparty to the treaty,
we are shut out from this process. We are shutting ourselves
out.
This makes a critical difference to our energy companies,
as we will hear. They want and need certainty to invest the
billions of dollars required to develop energy in the extended
shelf, especially in the Arctic where the Chinese and the
Russians are already laying claims. Instead of doing what we
can do to encourage environmentally sound energy exploration in
those areas, our failure to join the Law of the Sea is
deterring it.
We are pleased to have Jack Gerard here today to speak on
behalf of the American Petroleum Institute and explain exactly
why what I have just said is the case. Mr. Gerard is not alone.
You can listen to Rex Tillerson, the respected head of
ExxonMobil, who recently wrote to Senator Lugar and myself
urging ratification of the treaty.
Or listen to Marvin Odum, the head of Shell Oil Company,
which employs over 22,000 people in this country and strongly
supports joining the Law of the Sea. Marvin was, unfortunately,
unable to join us today, but he has submitted testimony for the
record. And his full testimony will be placed in the record as
if read here in full.
[The prepared statement of Mr. Odum follows:]

Prepared Statement of Marvin E. Odum, President, Shell Oil Company

As President of Shell Oil Company, I am pleased to have an
opportunity to provide the Senate Foreign Relations Committee with
Shell's views on United States accession to the Law of the Sea
Convention and provide information, specific to the United States,
about potential benefits of additional oil and gas production under the
Convention.
Shell Oil Company is the U.S.-based subsidiary of Royal Dutch
Shell, headquartered in Houston, Texas. Shell employs approximately
22,000 people in the United States.
Shell's support for the Law of the Sea Convention is based on three
points.
First, enormous oil and gas resources are estimated to lie in the
U.S. ``Extended Continental Shelf,'' an area that begins at 200 miles
from shore and runs out to the outer edge of the continental margin of
the United States. The U.S. Extended Continental Shelf off the coast of
Alaska has been estimated by the U.S. Government to be at least 1
million square kilometers, or twice the size of California. The U.S.
Geological Survey estimates that the area north of the Arctic Circle
contains nearly a hundred billion barrels of oil and trillions of cubic
feet of natural gas, a vast untapped resource.
Second, the Convention establishes a process through which Parties
to the treaty can establish internationally-recognized claims over the
resources in their extended continental shelf. Without this high degree
of legal certainty, any future claims to oil and gas resources of the
extended shelf would be vulnerable to legal challenge or subject to
dispute. The resulting uncertainty would discourage the type of private
sector investment needed to develop the resources.
Third, the royalty rates set forth in the Convention are workable
and acceptable to our company.

IMPORTANCE OF THE ENERGY RESOURCES GUARANTEED
BY THE LAW OF THE SEA CONVENTION

Under the Law of the Sea Convention, all coastal states have rights
to the resources, such as fish, oil, natural gas, and minerals, in or
under the oceans within 200 miles of their coasts. This is the area
known in the Convention as the Exclusive Economic Zone, or EEZ.
The Convention also provides for exclusive rights to resources on
the seabed and subsoil beyond the EEZ, if a coastal state is a party to
the Convention and demonstrates to the Commission on the Limits of the
Continental Shelf established by the Convention that the area meets the
geological criteria of an extended continental shelf. The Extended
Continental Shelf of the U.S. likely extends more than 600 miles into
the Arctic Ocean off the coast of Alaska, encompassing a vast portion
of the Arctic Circle.
The U.S. Geological Survey (USGS) estimates that the area north of
the Arctic Circle contains nearly a hundred billion barrels of oil and
trillions of cubic feet of natural gas. The USGS estimates that this
constitutes one-quarter of the world's undiscovered reserves, as well
as extensive deposits of valuable minerals. Conservative estimates from
the Bureau of Ocean and Energy Management place roughly 27 billion
barrels of oil and over 120 trillion cubic feet of gas in Alaska's
offshore without factoring in the massive U.S. Extended Continental
Shelf.
Shell has decades of experience in Arctic oil and gas development.
This summer we plan to execute an exploration program on leases off the
coast of Alaska. With an investment of more than $4 billion and a
program that meets and exceeds regulatory requirements, we are
confident that this is the first step to developing world-class
resources there. To be clear, these existing leases are within the EEZ
of the U.S., and production would come on line in the early to mid-
2020s. But this work would tap a fraction of the resources within the
geological formations off the coast of Alaska. Estimates from all
experts say that the area beyond 200 miles into the U.S. Extended
Continental Shelf is resource-rich.
Although development in these extended shelf areas of the Arctic
has not yet occurred, other countries bordering the Arctic Ocean--
Russia, Canada, Norway, and Denmark--have ratified the Convention and
are proceeding under its process at the Continental Shelf Commission to
delineate their Extended Continental Shelves in the Arctic and secure
their right to vast additional oil and gas resources. Although the
United States is undertaking Continental Shelf mapping activities, any
U.S. claims to oil and gas resources in the extended shelf would not
have the international recognition that is afforded to Convention
members. Moreover, until the United States ratifies the Convention, it
has no opportunity to sit on the Commission and participate in
decisions--including the review of other countries' claims--that affect
its interests, including in the Arctic.
The benefits of developing Alaska's offshore oil and gas resources
are many. Offshore leasing and development--whether in the U.S. EEZ or
the Extended Continental Shelf--encourages economic activity in the
United States, leads to more domestic supply and an improved balance of
trade, and increases government revenue.

THE NEED FOR LEGAL CERTAINTY FOR INVESTMENTS
IN THE EXTENDED CONTINENTAL SHELF

More than 160 countries are currently Parties to the Convention,
including all of the major maritime powers and all of the major
industrial countries, and they can benefit from the legal certainty
over resource development that the Convention provides. If the United
States were to become a party to the Convention, it could participate
in the internationally recognized process for claiming its Extended
Continental Shelf and its rights over oil and gas, which would provide
legal certainty for accessing and developing these energy resources.
Without this clear claim, our company would not find investment
conditions favorable.
Legal certainty, as would be facilitated under the Convention, is
essential. Companies make multibillion dollar investment decisions
based in part on confidence that the investment will not be undermined
by legal challenge. Considering that substantial investments will be
required for safe and responsible exploration and development on the
Extended Continental Shelf in the Arctic, we do not envision pursuing
activities in these areas unless the claims of Arctic nations,
including the United States, have been approved by the Continental
Shelf Commission. Until this legal risk and uncertainty is minimized,
the oil and gas resources of the Extended Continental Shelf in the
Arctic may be considered to be stranded.

THE ROYALTY RATES OF THE CONVENTION ARE ACCEPTABLE TO SHELL

Under the Convention member nations can secure exclusive rights to
extract resources in their Extended Continental Shelf--areas not
previously subject to clear jurisdiction. The Convention also requires
member nations extracting oil and gas resources from their Extended
Continental Shelves to make payments to the International Seabed
Authority based on the value of production. If the United States
ratified the Convention, Shell expects that the U.S. Government would
collect the fees it would be obligated to pay to the Authority from
those companies that produce oil and gas in the extended shelf, along
with royalties it collects for the U.S. Treasury.
The royalty rates the United States would pay to the Authority were
negotiated with input from industry. The royalties set in the
Convention would begin at 1 percent of the value of production in the
6th year of production at a production site, rising 1 percent per year
to a maximum of 7 percent in the 12th year and following years. While
the overall royalty rate (that going to the U.S. Treasury and that
going to the Authority) would be part of the economic calculations we
make in determining whether or not to proceed with investment, Shell
finds the Convention's royalty rates to be reasonable and acceptable.
Thank you for the opportunity to express our support for Senate
approval of the Law of the Sea Convention. We welcome and encourage any
actions the Senate may make to reduce investment risk, increase legal
certainty, and facilitate oil and gas development.

The Chairman. A short excerpt. This is Marvin Odum. ``If
the United States were to become a party to the Convention, it
could participate in the internationally recognized process for
claiming its Extended Continental Shelf and its rights over oil
and gas, which would provide legal certainty for accessing and
developing those energy resources. Without this clear claim,
our company would not find investment conditions favorable.''
So, finally, we turn to manufacturing. As many of you know,
rare earth minerals are critical to a large part of modern
manufacturing. Rare earth minerals are an essential component
of our communication systems, of our defense control systems,
missile defense control technology, and other weapons systems.
It includes--the breadth or sort of the scope of rare earth
mineral use is in electronics. It is in computers, cell phones,
and all of the advanced weapons systems, some of which I have
named.
Today, my friends, China controls about 97 percent of the
production market for these minerals. Can anybody in their
right mind suggest that the United States is safer and our
companies are advantaged sitting in a situation where you can't
invest because you can't be safe and you can't be legally
protected, and we are sitting on the outside? We cannot secure
international recognition for deep sea mining claims that our
companies want in order to invest billions of dollars unless we
are part of this treaty.
So, on rare earth minerals, on oil and gas, on whatever
unknown minerals and/or products may be findable under the
ocean, we have a choice. We can either join the major
industrial nations that have already joined up and are already
using this to their advantage and secure the benefits of the
sea for Law of the Sea, as well as the sea, for our businesses
and industries, or we can remain on the outside, deprive our
companies of the legal investment and operational security they
seek, cede American competitive advantage, and watch while
other countries take the spoils.
I think the choice is clear. Today, we have people who can
speak with much more authority than I can because it is their
livelihood. It is their life endeavor, and I think we need to
listen to them.
Thomas Donohue, president and CEO of the U.S. Chamber of
Commerce, representing broadly many of these industries. Jack
Gerard, president and CEO of the American Petroleum Institute,
of which all of our major producers are partners. Jay Timmons,
president and CEO of the National Association of Manufacturers.
And Lowell McAdam, chairman and CEO of Verizon.
So, gentlemen, welcome today. Thank you for being with us.
Senator Lugar.

OPENING STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA

Senator Lugar. Thank you, Mr. Chairman.
I join you in welcoming our distinguished panel of industry
leaders. I appreciate especially their efforts on behalf of the
Law of the Sea and their willingness to explain how the
Convention will help them create private sector jobs and
contribute to the growth of the U.S. economy.
Every major ocean industry--including shipping, fishing,
telecommunications, oil and natural gas, drilling contractors,
shipbuilders--support United States accession to the Law of the
Sea Treaty. This is not a recent development. Ocean industry
support for the Convention has been virtually unanimous going
back to 2003 when the Foreign Relations Committee first took it
up and initiated a process that resulted in a unanimous
committee vote to report Law of the Sea favorably to the whole
Senate on that occasion.
A few years later at a Foreign Relations Committee hearing
on October 4, 2007, a business panel testified in favor of the
Convention. Only Senator Menendez and I were present for that
powerful, unequivocal testimony. But then, as now, every major
ocean industry backed the Convention and appealed for
ratification.
With good reason, Americans are intensely interested in job
creation and the pace of United States economic activity. In my
State of Indiana, this is the paramount issue among voters.
There are innumerable threats to the United States economy,
including the phenomenon over which we have minimal control,
such as the European debt situation.
Moreover, because of our own national debt, we have few
stimulus options to combat a future economic downturn. These
factors increase the importance of a jobs creating impact, of
technological innovation, and our own natural resources. As we
will hear today, U.S. ratification of Law of the Sea would
support job creating investment and open new resources to our
industries at a critical time for our economy.
The Law of the Sea already forms the basis of maritime law
regardless of whether the United States is a party.
International decisions related to resource exploitation,
navigation rights, and other matters will be made in the
context of the Convention whether we join or not. And we will
not even be able to participate in the amendment process to
this treaty, which is far more likely to impose new
requirements on our Navy and ocean industries if the United
States is absent.
Because of these factors, the people who actually deal with
oceans on a daily basis and invest their money in job creating
activities on the oceans want this Convention ratified. They do
not want to be at a competitive disadvantage to foreign
industries.
By not joining the Law of the Sea, we also are diminishing
the potential scope of our domestic energy production. Some
have argued that United States accession to the Law of the Sea
Convention is unnecessary to secure the legal basis for
companies to fully exploit oil, natural gas, and mineral wealth
on the ocean floor, but that is not the opinion of American
companies that might invest their resources in this activity.
They tell us that without the certainty of title provided
by Law of the Sea Convention, they would not go forward with
many projects requiring large investments. Their concern is
that after doing the expensive exploration, research, testing,
and construction necessary to exploit a site, they have to be
certain that another entity won't be able to free-ride on their
investment or challenge their claim in international courts.
The drilling and mining companies prefer to pay a small
royalty beginning in the sixth year of production in return for
an international system that gives them undisputed claim for
the resources produced. This royalty provision of the
Convention was negotiated with the participation of extraction
companies.
They judged that it is reasonable, given the legal
certainty it secures and the value of what might be produced,
especially since the first 5 years of production will not be
subject to any royalty.
Our resource extractors are telling us that if we want them
to move forward with scale development of ocean floor resources
that could contribute significantly to United States energy
security and create jobs, we need to ratify the Law of the Sea.
I thank the chairman for this hearing, and we look forward
to our discussions.
The Chairman. Thank you, Senator Lugar.
I am reminded by your testimony, as I don't need to be
reminded by it. But it flagged it that this is ground that this
committee has been over before. And Senator Lugar has
previously led that effort and has had a longtime association
with and stake in this effort, and I just want to acknowledge
that and thank him for his laying that groundwork and record
that we have to date.
Mr. Donohue, if you would lead off, and Mr. Gerard second,
Mr. Timmons third, and Mr. McAdam, if you would bat cleanup?
Thanks.

STATEMENT OF THOMAS J. DONOHUE, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, U.S. CHAMBER OF COMMERCE, WASHINGTON, DC

Mr. Donohue. Thank you, Mr. Chairman and Ranking Member
Lugar and all the members of the committee who are here or will
be here. We appreciate this opportunity to testify today.
I am pleased to express the U.S. Chamber of Commerce's
strong support for approval of the Law of the Sea Treaty. This
morning, I will focus my remarks on why the treaty is in our
economic interest, our national security interest, and why it
is essential to America's global leadership.
On the economic side, the treaty would be a boon to U.S.
economic growth by providing American companies with the legal
certainty and stability that they need to hire and invest. It
would codify the U.S. legal rights to use international
shipping lanes to lay and service underwater cables and to
develop vast amounts of oil, natural gas, and minerals off the
U.S. coast and in the deepwater seabed.
The treaty would benefit several industries key to economic
growth, job creation, and U.S. competitiveness. It would
benefit the energy industry by providing sovereign rights to
seabed resources 200 miles off our coast. If certain geological
criteria are met, the zone of sovereignty could extend to 600
miles, or the so-called Extended Continental Shelf.
Proper delineation of the Extended Continental Shelf could
bring an additional 4.1 million square miles of ocean floor
under U.S. sovereign rights, an area larger than the lower 48
States. The treaty would also allow the United States to have a
U.S. expert elected to the international body that determines
the claims in the Arctic, and there are going to be a lot of
them.
Securing international recognition for U.S. rights in these
areas and defending against the unreasonable claims of other
nations is vital to the economic prosperity of our Nation. The
telecommunications industry needs the treaty to codify the
right to lay and maintain underwater cables in the oceans of
the world. It also needs them to provide stronger protections
for cables against damages by other parties.
A wide range of domestic industries, including aerospace,
defense, and consumer electronics, need the treaty to enable
access to new sources of mineral resources, including rare
earth minerals, as the Senator indicated, which lie in massive
deposits on or beneath the deep seabed floor.
Companies need the legal certainty and the stability
provided by the treaty in order to minimize the investment
risks and cost to developing these resources in the U.S.
Extended Continental Shelf and the area beyond that, the deep
seabed. That is why the treaty's approval is so important to
sustaining and creating American jobs and protecting American
interests close to our mainland.
Now let me say a word about national security. The treaty
clearly is essential to America's national security.
The U.S. Chamber has a long and proud history of supporting
America's national security interests.
For example, we played an instrumental role in mobilizing
America's industrial might to fight and win World Wars I and
II. I put that in there, if I might say, Mr. Chairman, because
we just celebrated our 100th anniversary, and we took the time
to read about why the Chamber was founded and what its basic
principles were, which were to represent the American business
community and to represent it at the highest level with the
greatest service our country and its needs.
We have long supported a robust national defense, and we
have recently launched a major effort called Hiring Our Heroes
to employ veterans by matching them with employers all around
the country. It is in this tradition that we support approval
of the Law of the Sea as it relates to national security.
At any given time, hundreds of U.S. flagged ships and ships
owned by U.S. companies rely on the freedom of navigation
rights codified in the treaty while crossing the world's
oceans. In fact, seafaring vessels transport more than 95
percent of all goods imported to or exported from the United
States, including essential commodities like oil.
While we can always rely on the U.S. Navy to ensure lawful
passage of U.S. flagged and owned ships, the Chamber strongly
supports the Navy's desire to codify rights to freedom of
navigation in the treaty rather than rely on the customary
international law or a strong navy.
Let me say a word about a seat at the table. The treaty is
critical to America's global leadership. As the world's
preeminent maritime power with one of the largest Continental
Shelves, the United States has more than any other country to
gain, or to lose, based on how the treaty's terms are
interpreted, applied, or changed.
The Law of the Sea Treaty will continue to form the basis
of maritime law with or without our approval. Our Nation's
interests are best protected by being an active participant.
Another side comment. There is a lot of comment and
suggestion that this organization set up in Jamaica is going to
run our lives. It clearly is not. But what a mistake we make if
we don't join the treaty and put our representative there, who
would have the absolute power to veto any action suggested by
the organization.
Now let me say a word about our critics of the treaty, who
I have a lot of respect for. But I would like to rebut two of
the chief criticisms that we hear.
The first is that it erodes American sovereignty. This
couldn't be further from the truth. This treaty promotes our
sovereignty by codifying our property rights in the Arctic and
on our Extended Continental Shelf. It will be ours. People will
know it is ours, and we have every right to defend it.
The second is opposition to a small portion of royalties
from development that would be going to the International
Seabed Authority. My response to that is simple. The U.S.
Treasury will lose billions of dollars in royalty revenue by
not providing companies the legal certainty and stability to
develop its Extended Continental Shelf.
It is a simple balance. We get most of the money under that
system. The treaty provides that certainty, which will
encourage companies to explore and develop these areas and
produce potentially billions and billions of dollars in
royalties going to the Government.
And finally, like any agreement, this treaty is not
perfect, but we are better off sitting at the table. Today, the
benefits far outweigh the costs, and we must protect those
benefits.
For all of these reasons, the U.S. Chamber urges the Senate
to give its advice and consent to the Law of the Sea Treaty.
The treaty has the enthusiastic backing of every industry it
impacts, including energy, telecom, shipping, mining, fishing,
biotech, et cetera. It enjoys the support of every living
Secretary of State and the Joint Chiefs.
Senate approval is imperative to expand U.S. territory
beneath the oceans to protect vital national security
interests, to develop new commercial interests, and to create
jobs.
So I thank you for allowing me to share these obvious
comments. I am sure the discussion will get more specific, but
the bottom line is very simple. The benefits are all to accrue
to this country and to our economy, and we ought to move
forward on it.
Thank you very much, Mr. Chairman.
[The prepared statement of Mr. Donohue follows:]

Prepared Statement of Thomas J. Donohue

Good morning, Chairman Kerry, Ranking Member Lugar, and members of
the Committee on Foreign Relations. My name is Thomas J. Donohue and I
am President and Chief Executive Officer of the U.S. Chamber of
Commerce. The U.S. Chamber of Commerce is the world's largest business
federation, representing the interests of more than 3 million
businesses of all sizes, sectors, and regions, as well as state and
local chambers and industry associations. I am pleased to appear before
you today to affirm the Chamber's strong support for U.S. accession to
the Law of the Sea (LOS) Convention.

KEY POINTS

I want to stress a few critical points to this committee:

We support joining the Convention because it is in our
national interest--both in our national security and our
economic interests. The Chamber has a long and proud history of
supporting America's national security interests including
playing an instrumental role in mobilizing America's industrial
might to fight and win World Wars I and II. It is in this
tradition that we support approving the Law of the Sea Treaty.
Becoming a party to the Treaty benefits the U.S.
economically by providing American companies the legal
certainty and stability they need to hire and invest. Companies
will be hesitant to take on the investment risk and cost to
explore and develop the resources of the sea--particularly on
the Extended Continental Shelf (ECS)--without the legal
certainty and stability accession to LOS provides. The benefits
of joining cut across many important industries including
telecommunications, mining, shipping, and oil and natural gas.
LOS will continue to form the basis of maritime law with or
without our accession. Our national interests are best
protected by being an active participant in this process.
Joining the Convention will provide the United States a
critical voice on maritime issues--from mineral claims in the
Arctic to how International Seabed Authority (ISA) funds are
distributed.
Many opponents present a false option to LOS that does not
exist: that the United States can enjoy the benefits of LOS
without joining it. In reality, only by joining can the U.S.
reap the full economic and national security benefits of the
Convention. Like any agreement, LOS isn't perfect. But its
benefits far outweigh the costs of continuing to stand on the
sidelines. The Chamber and the business community do not fear
adverse rulings under the Convention so much as we fear being
left behind by our global competitors.
Contrary to some opponents' claims, joining the treaty
promotes American sovereignty. LOS strengthens our sovereignty
by codifying our property claims in the Arctic and on our ECS.
Remaining outside of the Convention undercuts our sovereignty
by not allowing us to advance and protect our property claims
through the process utilized by every other major global power.
the chamber's support for the law of the sea convention
The Chamber has a long history of supporting the Law of the Sea
Convention before this committee. The Chamber remains steadfast in its
belief that the Senate should expeditiously approve the Convention
because of the tremendous benefits it will provide for American
enterprise. The Convention has the enthusiastic backing of every
industry it impacts, including energy, telecom, shipping, mining,
fishing and biotech. Earlier this month, the Chamber and 11 diverse
trade associations wrote to this committee, submitting a letter
strongly urging accession to the Convention. This is because the
Convention is overwhelmingly favorable for U.S. business interests: it
would codify U.S. legal rights to use international shipping lanes, to
lay and service submarine cables, and to develop vast amounts of oil,
natural gas, and minerals off the U.S. coasts and on the deep seabed.
Our letter emphasized that now that ``new technologies and changed
conditions have made it cheaper and easier to access the potential
wealth beneath the oceans, the business community simply cannot afford
to have the U.S. remain on the sidelines.''
In addition to a 12-mile territorial sea, the Convention provides
for a 200-mile Exclusive Economic Zone, over which a coastal state has
exclusive resource management rights. If certain geological criteria
are met, the Convention also provides sovereign rights to seabed
resources on the Continental Shelf beyond 200 nautical miles. The
United States has the world's second-longest coastline and likely has
an Extended Continental Shelf in at least six different locations,
including off of the Eastern seaboard and up to 600 miles off the coast
of Alaska. In total, the Convention would confer a resource
jurisdiction larger than that of any other nation in the world--an
additional 4.1 million square miles of ocean floor, greater than the
area of the contiguous 48 States. Securing international recognition
for U.S. rights in these areas--and defending against the outsized
claims of other nations--is vital to the economic prosperity of our
Nation.
The Convention provides stability, predictability, and clear legal
rights, which are essential for American investment in our oceans, and
therefore to sustaining and creating American jobs. The oceans, which
comprise 70 percent of the earth's surface, are integral to global
commerce. Ships carry virtually all goods passing in international
trade, and submarine cables--not satellites--relay virtually all modern
communications. Oceans also promise enormous frontiers of untapped
resources. Development of hydrocarbon resources on the U.S. ECS in the
Arctic and elsewhere would create thousands of new jobs for Americans,
generate billions of dollars in new economic activity, and increase our
energy security. Similarly, mining on the U.S. ECS and the deep seabed
presents vast new opportunities to tap into deposits of manganese,
nickel, cobalt, copper, and vital rare earth minerals.
Because of our status as a non-party, the United States is not
represented on the Council of the International Seabed Authority, nor
are we able to nominate an expert to sit on the Continental Shelf
Commission, which determines whether seabed qualifies as Continental
Shelf. Other industrial nations--all members of the G8 included--joined
the Convention following the 1994 deep seabed mining reforms. Today,
161 countries and the European Union are party. The U.S. is the only
notable outlier. The Convention's institutions are now up and running,
and it is open to amendment. As a party, we would be in a position to
lead from within and advance and protect our interests. And in
institutions outside the Convention, such as the International Maritime
Organization, joining the Convention would increase our credibility and
authority to cite and interpret Convention provisions in defense of our
interests.
Because the Convention's governing bodies are active, the Senate's
continued inaction on the Law of the Sea has relegated the United
States to an observer status. Since 1982, the U.S. has voluntarily
complied with the Convention's rules. The U.S. must now become party to
the Convention in order to lock in the treaty's favorable rights and
reassert U.S. leadership in the maritime sphere. Focusing on four key
U.S. industries--oil and natural gas, shipping, mining and telecom--I
will elaborate on the reasons why the Senate should approve the Law of
the Sea Convention in 2012.
the business case for accession to the law of the sea convention
A . Oil and Natural Gas
Accession to the Law of the Sea Convention would provide oil and
natural gas companies with legal certainty as they explore and develop
the vast energy deposits off the coasts of the United States. As I have
mentioned, the U.S. benefits from a broad continental margin,
especially off of Alaska's coast, where the U.S. Continental Shelf
likely extends more than 600 miles into the Arctic Ocean. The U.S.
Geological Survey estimates that the Arctic contains one-quarter of the
world's undiscovered oil and natural gas, including nearly 100 billion
barrels of oil and trillions of cubic feet of gas. The U.S. ECS seaward
of Alaska encompasses a large portion of this Arctic Circle area. And,
while much is yet unknown regarding Alaska's offshore, a Department of
Interior report estimates that just the area within 200 miles of shore
holds 27 billion barrels of oil and 132 trillion cubic feet of natural
gas. The U.S. offshore in the Gulf of Mexico has a similarly impressive
total endowment which, including quantities already pumped to surface,
is estimated to contain 45 billion barrels of oil and 232 trillion
cubic feet of natural gas.
Clearly, the hydrocarbon potential of these offshore areas is
enormous. Offshore oil volumes already account for about 30 percent of
all U.S. production. Successful development will grow the U.S. economy,
create jobs, and significantly reduce American reliance on foreign oil.
The U.S. Government should enable such development, not hinder it. But
that is precisely what the Senate's failure to approve the Law of the
Sea Convention has done, because the U.S. cannot secure international
recognition of its Continental Shelf beyond 200 miles without joining
the Convention.
Offshore operations are capital-intensive, requiring significant
financing and insurance. Oil and natural gas companies do not want to
undertake these massive expenditures if their lease sites may be
subject to territorial dispute. They operate transnationally, and need
to know that the title to the petroleum resources will be respected
worldwide and not just in the United States. Availability of clear
legal title is crucial to realizing the potential of U.S. offshore
areas both now and in the future, as drilling technology continues to
advance and make new projects feasible. As ExxonMobil emphasized in its
recent letter to this committee, before it undertakes the immense
investments required to explore and develop resources beyond 200 miles,
``legal certainty in the property rights being explored and developed
is essential.''
Under the Convention, parties can secure international recognition
of the limits of their Continental Shelves by demonstrating to a body
of scientific experts, the Continental Shelf Commission, that its
seabed meets certain geological criteria. Over 40 nations--including
every other Arctic nation--are already taking actions to stake their
claims before this Commission. As a non-party, the U.S. is not able to
stake our own claims, nor have an expert sit on the Commission and
participate in discussions affecting its interests.
Opponents of the Convention often cite its imposition of royalties
on ECS production as an important reason to reject the Convention.
Under the Convention, parties must make payments to the ISA based on
the value of resources extracted from sites on their Extended
Continental Shelves. Production companies would be able to keep the
entire value of production at each site for the first 5 years, subject
to any licensing fees imposed by the U.S. Government. Payments to the
Seabed Authority would begin at 1 percent of the value of production in
the 6th year of exploitation at a site and rise 1 percent per year to a
maximum of 7 percent in the 12th year and following years. These
royalty rates were negotiated by the U.S. Government with extensive
input from U.S. oil and natural gas interests. As oil and natural gas
companies have recognized, the royalties are reasonable in view of the
immense value of the resources that would be made subject to the United
States exclusive sovereign jurisdiction. The oil and natural gas
companies--and the U.S. Treasury--would be able to retain much more
than the U.S. would be required to pay to the Seabed Authority.
Notwithstanding the required payments to the Seabed Authority, joining
the Convention would be overwhelmingly beneficial to U.S. economy and
the U.S. Treasury.
B. Mining
Mining, like oil and natural gas, represents a field where the U.S.
will damage its own interests and those of U.S. industry by remaining
outside the Law of the Sea Convention. Only by joining the Convention
will the U.S. secure its rights to vast mineral deposits on the U.S.
ECS, and perhaps even more important, be able to sponsor companies to
mine the deep seabed in the area beyond any national jurisdiction.
Beneath the oceans are troves of valuable metals and rare earth
elements richer than any found on land, including deposits of
manganese, nickel, cobalt, copper, lead and other metals commonly used
in modern manufacturing.
Several recent developments make access to deep seabed mining sites
an urgent matter. Due to technological progress, our ability to mine
the deep seabed has improved dramatically, while at the same time
prices for various metals have increased. Today, deep seabed mining
presents an attractive business proposition. China, Russia, India, and
other countries have responded, sponsoring mining ventureswhich have
licensed their respective sites with the ISA. These countries have
obviously concluded that the fees are worth paying to secure legal
title to deep seabed mining sites.
The importance and relative scarcity of rare earth minerals is
another factor requiring urgent access to the deep seabed. Rare earth
minerals have a wide range of critical technology and defense
applications. China has a virtual monopoly on the land-based supply of
these elements, a reality that is of great concern for U.S.governmental
and commercial interests. The U.S. suffers from a competitive and
strategic disadvantage because, as a non-party to the Convention, it
cannot sponsor U.S. companies to engage in deep seabed mining.
Lockheed Martin, the only U.S. company with active claims to deep
seabed sites under a U.S. law predating the Law of the Sea Convention,
recently wrote to this committee urging the Senate to approve the
Convention. Lockheed has invested hundreds of millions of dollars on
research and development related to deep seabed mining over the past 40
years. The company's letter made clear that the multibillion dollar
investments now required to launch an ocean-based resource development
business will only occur if it can obtain the security of tenure and
clear legal rights offered under the Convention. With Lockheed and
potentially other U.S. companies poised to expand their operations and
create new jobs, Senate accession to this treaty would allow investor
dollars to stay here.
Equally important to U.S. companies contemplating deep seabed
mining activities is U.S. leadership in the ISA. The next several years
will be formative for the nascent deep seabed mining industry. As I
mentioned earlier, the Convention's deep seabed mining regime was
overhauled in 1994, resulting in a system that is uniquely favorable to
American interests. Those reforms included a permanent U.S. seat on the
Council of the ISA. But the U.S. has not assumed that seat, and cannot
guide the development of new rules pertinent to deep seabed mining
activities while outside the Convention.
C. Shipping
The U.S. shipping industry depends heavily on the rights enshrined
in the Law of the Sea Convention. At any given time, hundreds of U.S.
flag ships and ships owned by U.S. companies rely on the freedom of
navigation rights codified in the Convention while in transit through
the world's oceans. Unsurprisingly, U.S. shipping companies have long
been ardent supporters of accession to the Convention. The Chamber of
Shipping of America has been a longtime supporter of the Convention and
has testified and written letters to this committee urging the Senate
to approve the treaty.
The Convention guarantees rights of innocent passage through
territorial seas, transit passage through straits and archipelagoes,
and freedom of all vessels on the high seas. Seafaring vessels, such as
container ships, crude oil tankers, and bulk carriers, carry over 95
percent of all goods imported to, or exported from, the United States.
Guaranteeing their free movement is both an economic and a national
security concern, as these ships transport the majority of this
country's oil and other crucial commodities and goods.
The Convention's detractors argue that U.S. ships can rely on
customary international law to ensure their mobility. But customary
international law is not well-suited to the needs of business. By
definition, it is hard to find and apply customary law because it does
not exist in one place. Its rules can and will shift over time.
Shipping companies benefit from a set of stable, written rules that
they can easily reference during a dispute. The Law of the Sea
Convention serves this function by codifying key navigational rights in
a single, central Authority.
Furthermore, robust U.S. leadership on maritime issues is just as
important as a set of treaty-based rules. Without U.S. participation,
there is a greater likelihood that countries will successfully assert
divergent views on the application of the Convention's navigational
rules. As a non-party, the U.S. lacks credibility to enforce the
consistent application of norms embodied in the Convention. The
shipping industry--and industry in general--will benefit from a strong,
treaty-based rule of law guided by the United States.
D. Telecommunications
The rights codified in the Law of the Sea Convention are likewise
of paramount importance to the daily operations of U.S.
telecommunications companies. The Convention was negotiated with
extensive input from the U.S. telecommunications industry and
represents a quantum leap forward in law applicable to underwater
cables. It provides rights to lay, maintain, and repair submarine
cables outside territorial seas, certain protections to prevent damage
to cables, and avenues for legal recourse when these various provisions
are violated.
Submarine cables represent critical communications infrastructure,
as they form the backbone of the Internet and global e-commerce. Such
cables, typically consisting of optical fibers laid along the ocean
floor in a bundle no larger than a garden hose, carry over 95 percent
of transoceanic voice and data communication. U.S. telecom companies
have worked rapidly to meet exploding consumer appetite for data,
increasing the total circuit capacity of transoceanic cables landing in
the U.S. by more than 1,000 fold since 1995.
There is no substitute for these underwater cables in case of
damage. The earth's satellites can carry no more than 7 percent of U.S.
international voice and data traffic. But worldwide, nearly 100 cable
outages occur each year. The vast majority of cable outages are caused
by bottom trawling fishing, dredging, and ship anchoring. Occasionally,
cables are taken in an act of piracy, as occurred in 2007 when
individuals in commercial vessels from Vietnam stole over 100 miles of
cables on the high seas. Cable outages may disrupt governments,
financial markets, and business operations and require costly repairs.
Accession to the Law of the Sea Convention would better protect
U.S. companies' existing cable systems and foster additional
investments. Companies would benefit from the legal certainty provided
by treaty-based rights to lay, maintain, and repair cables, and conduct
surveys incident to laying cables. Like shipping companies, telecom
interests emphasize that they cannot merely rely on customary
international law because of the threat of encroachments by coastal
states. Russia's attempt to delineate cable routes on its continental
margin in the Arctic proves that fears of encroachment are not
theoretical. As a non-party, the U.S. loses more than just credibility
to lodge diplomatic protests to such actions because, with respect to
its submarine cable provisions, the Convention permits parties to
invoke its meaningful dispute resolution procedures. U.S. telecom
companies have repeatedly emphasized that they are comfortable with,
and want to rely on, the compulsory dispute resolution provisions in
the Convention.
Because the U.S. remains on the sidelines, it puts its telecom
companies at a competitive disadvantage and fails to provide them
important legal rights. They do not benefit from the legal certainty
and dispute resolution options that companies based in other countries
enjoy. In order to support its telecom companies and protect vital
communications infrastructure, the U.S. should join the Law of the Sea
Convention.

CONCLUSION

The U.S. Chamber urges the Senate to give its advice and consent to
the Law of the Sea Convention. The Convention has the resounding
support of every industry it impacts. It codifies legal rights on which
U.S. businesses rely on a daily basis and provides access and clear
legal title to new frontiers of hydrocarbon and mineral resources.
Consequently, accession will lay the groundwork for investment that
boosts the U.S. economy and creates new jobs. Now that new technologies
and changed conditions have made it cheaper and easier to access the
wealth beneath the oceans, the United States simply cannot afford not
to join the Convention.

The Chairman. Thank you very much, Mr. Donohue, for very
clear testimony. We appreciate it.
Mr. Gerard.

STATEMENT OF JACK N. GERARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AMERICAN PETROLEUM INSTITUTE, WASHINGTON, DC

Mr. Gerard. Thank you, Mr. Chairman and Ranking Member
Lugar, and Senators Webb and Corker and Isakson. It is a
pleasure to be here with you today.
And in light of your statement, Mr. Chairman, as you
started, I guess we need to thank Tom for this opportunity as
well. Is that right?
The Chairman. That is right.
Mr. Gerard. It is always good to be here with him at the
table, and the others.
On behalf of the 500 member companies, along with the 9.2
million Americans, men and women who work in the U.S. oil and
natural gas industry, we appreciate the opportunity to be here
today to testify in support of accession to the Law of the Sea
Treaty.
We agree with Secretary of State Hillary Clinton, with
former Secretary of State Condoleezza Rice, and with the other
Secretaries of State before her, as well as Presidents of both
political parties who have urged accession, that joining the
Law of the Sea Convention is truly in the best interests of the
United States.
Today, the United States relies on oil and natural gas for
over 60 percent of all the energy we consume. Recent economic
projections by our own Department of Energy in the Obama
administration show that 30 years from now, 57 percent of all
the energy we consume in the United States will continue to be
oil and natural gas.
Other projections show the demand for world global energy
led by oil and natural gas will increase by over 50 percent in
the next 20 to 30 years. Energy is a very serious issue,
particularly to our global economy. Companies spend billions of
dollars annually looking for and producing oil and natural gas
around the world.
To give you some insight, from just 2009 to 2011, the
industry spent over $700 billion just in the United States
drilling and exploring for additional opportunities. Just last
week at the lease sale conducted the central Gulf of Mexico,
the U.S. oil and gas industry paid $1.7 billion in bonus bids
to the Federal Government to secure rights to develop those
resources in the Gulf of Mexico.
Preliminary studies estimate that the U.S. Extended
Continental Shelf as a result of accession to the Law of the
Sea Treaty likely totals 1 million additional square kilometers
and could contain resources worth billions, if not trillions,
of dollars to our U.S. economy.
The Convention provides a clear objective means of
asserting U.S. authority and gaining international recognition
of that authority, reducing the potential for jurisdictional
conflicts between nations. This provides certainty for business
planning so that companies can manage their financial risk over
the lifetime of their investment.
I might add that when we in the oil and gas business look
for investment opportunities, we are not looking quarter by
quarter, year by year. We look 10, 20, 30, at 40-year horizons
when we are talking about multibillion dollar investments.
This certainty will increase the likelihood of companies
investing in the Extended Continental Shelf. This, in turn,
will result in more U.S. jobs, more U.S. revenue to our Federal
and State governments and many other benefits.
The Convention also broadens the definition of the
Continental Shelf in a way that would significantly favor the
United States. As Tom touched on earlier, it would secure an
additional 4.1 million square miles of ocean under U.S.
jurisdiction and provides a mechanism for laying claim to
vitally needed natural resources in the Arctic and other areas
where other countries--Russia, for instance--have already laid
claim, will protect our navigation rights and freedoms for our
vessels.
We understand that there are legitimate concerns about
certain aspects of the Convention. We greatly appreciate the
attention by members to ensure that this Convention is truly in
the best interests of the United States.
While I am here today to express to you the benefits of the
Convention for the oil and natural gas industry, our
expectation is that the administration and the Congress will
continue to work to ensure that U.S. interests are protected as
they represent the Nation in the implementation of the Law of
the Sea Treaty.
In short, the Law of the Sea Convention will advance and
protect America's energy interests. It will mean a level
playing field and new opportunity for marine sources
development all around the world.
Thank you again, Mr. Chairman and members of the committee.
And I look forward to your questions.
[The prepared statement of Mr. Gerard follows:]

Prepared Statement of Jack N. Gerard

Thank you, Chairman Kerry, Ranking Member Lugar and members of the
committee. My name is Jack N. Gerard and I am the president and CEO of
the American Petroleum Institute.
API is a national trade association representing more than 500
member companies in the oil and natural gas industry. On behalf of our
members and the more than 9.2 million American men and women whose jobs
are supported by the U.S. oil and natural gas industry, I want to
express my appreciation for the invitation to appear before you today
to speak on this very important issue.
It is an issue that is important to the our member companies, to
the millions of employees whose jobs these companies support, directly
or indirectly, and the thousands of communities in every state of the
union where these companies--and the companies that provide them goods
and services--have a presence.
We agree with Secretary of State Hillary Clinton that no country is
better served by this Convention than the United States. And we agree
with former Secretary of State Condoleezza Rice and other Secretaries
of State before her--as well as Presidents of both parties who have
urged accession--that joining the Law of the Sea Convention will
advance America's interests.
Experts, both within the government and outside, agree that America
will need more energy of all types in order to grow and to meet its
growing energy demand. Today, the U.S. relies on oil and natural gas
for over 60 percent of the energy it consumes.
Since 2000, our industry has invested nearly $2.3 trillion in U.S.
capital projects to meet ourcountry's growing demand for energy. The
significant investments made here in the United States not only support
the 9.2 million jobs mentioned above, but also support millions of
America's retirees through pension funds, IRAs, 401ks and other
investments. At a time when millions of Americans are unemployed, the
oil and natural gas industry has been a key driver of job creation and
economic activity.
It also supports 7.7 percent of U.S. gross domestic product, and
has provided $86 million a day in revenues to the Federal Government in
taxes, royalties, rental payments, and other production fees. That's
more than $30 billion per year. And with the right policies to access
more domestic oil and natural gas, there will be more jobs, and more
revenue for State and Federal treasuries: more than $800 billion by
2030.
According to the Energy Information Administration, projections for
2035 show oil and natural gas will still provide nearly 57 percent of
growing U.S. energy consumption--even with significant increases in
renewable energy use.
So the question isn't whether we will need more oil and natural
gas, but where will we get it? Will we use our own vast energy
resources or will we rely on others? Our Nation has the resources, and
one of the key areas with great potential for energy production is our
Continental Shelf.
Just last week, the Department of Interior conducted a lease sale
in the Central Gulf of Mexico where 56 oil and gas companies submitted
bids on 454 lease tracts and paid a total of $1.7 billion to the U.S.
Treasury to secure their rights to those lease tracts. This was in an
area where there has already been plenty of production, and companies
are committed in investing in this key U.S. offshore area.
Preliminary studies estimate that the U.S. Extended Continental
Shelf likely totals 1 million square kilometers and could contain
resources worth billions--if not trillions--of dollars.
The U.S. Geological Survey estimates that about one quarter of the
world's undiscovered oil and natural gas lies beneath Arctic waters
alone, and there is also the possibility of high yields of oil and gas
in the Extended Continental Shelf off of our Atlantic and Pacific
coasts. Modern technology makes it possible today to access these
resources. With the right leadership and vision, we can take control of
our energy future.
The Law of the Sea Convention provides the certainty that companies
need to invest the billions required and offers the potential of
greatly and definitively broadening the offshore areas from which we
can access new resources to meet our Nation's growing energy needs. It
will lead us to a greater energy future, with more jobs, more economic
growth, higher government revenues, and enhanced energy security.
Companies spend billions annually looking for and producing oil and
natural gas around the world. From 2009 to 2011, the industry spent
over $600 billion in U.S. drilling and exploration activities. They
make these substantial investment decisions by weighing carefully the
level of risk against the potential for returns on investment.
Because the industry must plan, invest and operate under long lead
times, it is crucial that government policies including our tax
framework encourage investment and provide certainty for business
planning so that companies can manage their financial risk over the
lifetime of the investment.
The Convention provides a clear, objective means of asserting U.S.
authority and gaining international recognition of that authority,
reducing the potential for jurisdictional conflicts between nations.
With greater certainty and the predictability provided by the Law
of the Sea Convention, industry will have greater incentive to fully
take advantage of the significant advances in technology that allow us
to extend operations into areas once considered out of reach or
uneconomical. Indeed, the Convention would provide a significant
incentive for industry to continue to develop the technology to push
into even deeper waters in frontier areas.
Given the rapid economic and political changes sweeping the world,
the U.S. can no longer afford to be left out of the process. U.S.
accession would ensure that American companies that are engaged in
offshore energy production remain competitive in the global market.
And, as companies that take their responsibility to their shareholders
seriously, they are more likely to invest in projects they believe have
the greatest certainty in their operations and the highest returns
possible.
As advances in technology push us further from our shores and into
areas of harsher climates, the potential for conflicts with other
nations' territorial claims inevitably increases. As such, there is a
more pressing need for certainty and stability in the delineation of
boundaries. Accession to the Convention would fulfill this need.
In addition, it will give the United States a seat at the table as
the Commission on the Limits of the Continental Shelf continues the
process of dividing up millions of square miles of offshore territory
and assigning management rights to all of the world's marine
resources--a process that has been described as ``probably the last big
shift in ownership of territory in the history of the Earth.''
Today there is no American official, no American geoscientist,
sitting at the table while this important work progresses. We can't
emphasize strongly enough that the United States cannot afford to be
left out of this process.
The Convention broadens the definition of the Continental Shelf in
a way that significantly favors the United States with its broad
continental margins, particularly in the North Atlantic, Gulf of
Mexico, the Bering Sea, and the Arctic Ocean. In the case of the United
States, this secures an additional 4.1 million square miles of ocean
under U.S. jurisdiction. That's more than 3 billion acres--an area that
is larger than the U.S. land area.
It should come as no surprise that our companies are interested in
taking advantage of the resources in those areas beyond 200 miles--
again, on behalf of their shareholders and the millions of jobs they
support--in ways that continue to demonstrate environmentally sound
drilling development and production technologies. Offshore petroleum
production is a major technological triumph.
We now have development projects located in water depth in the Gulf
of Mexico that not too long ago few thought possible.
New technologies are allowing oil explorers to extend their search
for new resources of oil and gas out to and beyond 200 miles for the
first time, providing the potential for the largest discoveries in a
generation to be made in field sizes not even imagined before.
We need to get on with the mapping work and other analyses and
measurements required to substantiate the extent of our shelf, and some
of the best technology for accomplishing this resides in the United
States. Establishing the continental margin beyond 200 miles is
particularly important in the Arctic, where there are already a number
of countries vying to expand their offshore jurisdictional claims.
Such features as the Chukchi Plateau and component elevations,
situated to the north of Alaska, could be claimed by the U.S. under the
provisions stated in the Law of the Sea Convention. U.S. companies have
a clear interest in setting international precedents by being the first
to operate in these frontier areas--and to continue demonstrating
environmentally sound drilling development and production technologies.
The Convention will increase certainty in a significant manner and
will in turn make it much easier to decide to invest billions of
dollars in future operations.
One other important consideration is our international oil trade.
U.S. companies are leading participants in the global oil market, and,
in 2010, about 44 percent of U.S. maritime commerce consists of
petroleum and petroleum products. Trading routes are secured by
provisions in the Convention combining customary rules of international
law with new rights of passage through straits and archipelagoes.
Accession to the Convention would put us in a much better position
to invoke such rules and rights. Steady growth in the demand for
petroleum throughout the world means increases in crude oil and product
shipments in all directions throughout the globe. The Convention can
provide protection of navigational rights and freedoms in all these
areas through which tankers will be transporting larger volumes of oil
and natural gas.
From an energy perspective, we see potential future pressures
building in terms of both marine boundary and Continental Shelf
delineations and in marine transportation.
The Law of the Sea Convention will provide the necessary certainty
and predictability to ensure we have access to another significant
potential energy resource.
I know there is considerable concern about royalties and whether,
as a result of accession to this treaty, our companies would be paying
royalties to the United Nations or another international organization.
While it is true that some royalties (7 percent at most) would
ultimately be shared with the International Seabed Authority (ISA)--an
independent intergovernmental body established by the Convention, and
not part of the U.N.--the U.S. would still retain all bonus bids,
annual rental fees, and most of the royalties from these leases. A
company would make all payments to the U.S. Government and then it
would be the responsibility of the U.S. Government to share this
royalty with the ISA beginning in the sixth year of production.
Over the last 10 years, oil and natural gas companies have paid to
the U.S. Treasury more than $70 billion to conduct offshore exploration
and production activities. They have paid $15 billion in bonus bids,
$2.2 billion in rentals, and $54 billion in royalties. As I mentioned
earlier, just last week, at the lease sale conducted in the Central
Gulf of Mexico, the U.S. oil and gas industry paid $1.7 billion in
bonus bids to the U.S. Government in order to secure rights to develop
those resources.
If that lease sale had been conducted on our Extended Continental
Shelf after U.S. accession to the Convention, the U.S. would still
receive all of those bonus bids in addition to all annual rental
payments prior to production and all royalties from the first 5 years
of production. It is only in the sixth year of production that the U.S.
would begin to share a small portion of its royalties with the
International Seabed Authority.
We recognize that the royalty sharing provision is a tradeoff for
the certainty that the Convention will provide and the vast economic
returns that the U.S. will realize through development of its Extended
Continental Shelf. But without the certainty provided through the
Convention, the likelihood of companies investing will decrease, and
the United States would likely collect little to no bonus bids,
rentals, or royalties at all with regard to the Extended Continental
Shelf.
Our industry also understands that there are concerns with regard
to the development of the implementation policies and procedures for
the Convention, particularly with regard to how the International
Seabed Authority might spend the royalties it receives. But we believe
that is precisely why the Senate must approve this treaty.
Accession to the Convention now would allow the United States to
participate in the drafting of these procedures and provide a leading
voice in how the royalty funds are used. We cannot influence the
process and ensure that our concerns are addressed if we are not
sitting at the table.
Once the policies and procedures of the ISA have been established,
the U.S. would have a permanent seat on the ISA Council with the power
to block adoption or modification of all major rules, regulations and
procedures. Specifically, this would include the distribution of funds,
the development of economic adjustment programs, and amendments to the
seabed mining provisions of the Convention. In short, no money could be
spent without the complete and total agreement of the United States.
The implementation details are being hashed out today, and the
negotiations are being conducted without us.
Without accession to the Convention, the United States cannot be a
part of those discussions, and if we're not part of those discussions,
we have no input on how the Convention will be implemented and we have
no say on how the royalty funds are used, including royalties paid on
production from other nations' Extended Continental Shelf.
In short, with a seat at the table of the International Seabed
Authority's Council, the United States would not only be able to
exercise leadership in the expenditure of this money, it would also
have veto power to block expenditures it disagrees with. We believe the
Law of the Sea Convention offers the United States the chance to
exercise needed leadership in addressing these pressures and protecting
the many vital U.S. ocean interests.
If the United States were not to become a party to the Convention,
it could negatively affect opportunities to lay claim to vitally needed
natural resources in the Arctic and areas where other countries--
Russia, for instance--have already made submissions with respect to the
outer limit of their Continental Shelf.
Today, the United States does not participate--even as an
observer--in the Commission on the Limits of the Continental Shelf. We
are watching from the outside as the guidelines and protocols for
conduct on the world's oceans are developed and as certain provisions
of the Convention are implemented.
Over the past few years, our industry has made great strides in
providing more of the energy our Nation's consumers and our Nation's
economy need. As our economy improves, we will need even more energy
from all sources. We are a technology-driven industry that has been
able to create jobs throughout the economic downturn. Greater access to
dependable, domestic resources for exploration and production is the
cornerstone of our energy future.
Accessing the resources in the Extended Continental Shelf would be
available to us under this Convention would also mean more money in the
Federal Treasury through royalties, leases, bonus bids and tax revenue.
With certainty of access to additional offshore areas, our government
could see much more in revenue and our economy would see more jobs and
more growth.
Ultimately, these are components that collectively will lead to
greater national security.
The oil and natural gas industry has been a bright spot in our
troubled economy, accounting for 3 percent of all jobs created since
2009, while boosting America's manufacturing industries and
revitalizing communities.
As an industry, we have looked at the Convention from a business
perspective and supported it through the past several administrations--
under both Republicans and Democrats. Our position is one that we have
held for over 15 years.
The American oil and natural gas industry is ready to step up to
the plate, but in order for it to succeed, it must be allowed to play
on a level international playing field.
The Law of the Sea Convention will go a great distance to provide
us that level playing field.
It is good for our Nation, and we urge this committee and the
Senate to give its approval.

The Chairman. Thanks very much, Mr. Gerard.
And Mr. Timmons, just before you do start, let me just say
in response to your expressed hope that the Congress is going
to--
that the Senate is going to make sure that we protect and
address any of those concerns that exist, I want to again say
to my colleagues that we will have a set of specific
declarations and understandings that clarify some of the
concerns that have been raised by people as we have gone along
here.
So there will be crystal clarity with respect to issues
raised about tax or jurisdiction, et cetera, and that will be
taken care of in this.
Mr. Timmons.

STATEMENT OF JAY TIMMONS, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, NATIONAL ASSOCIATION OF MANUFACTURERS, WASHINGTON, DC

Mr. Timmons. Well, thank you very much, Mr. Chairman,
Senator Lugar, and members of the committee, for the
opportunity to speak about the Law of the Sea Treaty, which is
vital for both our national security, as well as our economic
security.
The National Association of Manufacturers is the Nation's
largest manufacturing trade association, and we represent
12,000 manufacturers of all sizes across our country. I am
pleased to add the voice of manufacturers in support of the
adoption of the Law of the Sea Treaty because its approval is
absolutely critical for manufacturers' ability to compete and
succeed in the global marketplace.
One key to manufacturing growth and competitiveness is
exports. Ninety-five percent of the world's consumers live
outside of the United States. So reaching these potential
customers is absolutely necessary for manufacturing
competitiveness.
Most significantly, it is 20 percent--20 percent--more
expensive to manufacture in the United States than it is among
our major trading partners, and that is after you remove the
cost of labor. This treaty will help reduce the cost of
manufacturing in two very important ways.
First, it will provide new opportunities, as you have heard
from my colleagues here, for energy exploration. Secure and
reliable sources of energy are a significant concern for
manufacturers, which consume one-third of our Nation's energy
output.
And second, it will open up access to critical inputs for
many manufacturing applications. If you use a cell phone or a
computer or drive a hybrid car, chances are that components of
that product contain what are known as rare earth minerals.
Rare earths are the basic inputs in the production process for
many items, such as renewable energy products, defense
products, consumer electronics, and others.
Today, as was noted by the chairman, China produces upward
of 95 percent of the world's supply of rare earth minerals.
Brazil, India, Malaysia, and Canada are the remaining sources.
And while China uses 60 percent of the rare earths that it
mines today, there is no doubt that it will likely use all of
that that it produces eventually.
Now, if that happens, that is going to jeopardize
manufacturers' access to these materials. Costs will rise, as
they have been, not only on manufacturers, but also on
consumers. The economy will suffer, and more jobs will be in
jeopardy.
The United States has an opportunity to tap a new source of
rare earths and avoid this scenario, but first we need to
ratify the Law of the Sea Treaty. The development of resources
in and on the deep seabed is incredibly expensive, as you might
imagine. Companies in the United States are unlikely to invest
heavily in deep seabed mining because of the risk of legal
challenges to their activities.
Today, many U.S. companies have the means to explore and
develop these resources and minerals, but they will only do so
if there is a structure in place that contains internationally
recognized agreements. Ratification of the treaty will give
companies the certainty that they need to begin to develop
these resources.
Foreign mining companies whose governments have joined the
Convention have access to the international bodies that grant
the legal claims to operate in the deep seabed area. U.S.
companies are currently excluded from those bodies simply
because we have not adopted the treaty.
Manufacturers cannot afford for the United States to sit on
the sidelines when it comes to the Law of the Sea Treaty. We
are in a global economy, and countries are working feverishly
to take away our mantle of economic leadership. To strengthen
manufacturing in the United States and maintain our economic
position, we need to adopt policies that promote long-term and
sustained economic growth.
Manufacturing in the United States employs over 12 million
Americans with high-paying jobs, and the sector supports 5
million more jobs in this country. No doubt everyone in this
hearing room would like to see those numbers grow. A strong and
prosperous country needs a strong manufacturing sector, and
this treaty will strengthen manufacturing, and it will
strengthen our Nation.
Thank you again for the opportunity to speak with you
today.
[The prepared statement of Mr. Timmons follows:]

Prepared Statement of Jay Timmons

Thank you, Chairman Kerry and Ranking Member Lugar, for holding
this hearing and including the business community in your deliberations
on an issue that is vital to our national security and our global
economic competitiveness.
I am pleased to appear before this committee to discuss the U.N.
Convention on Law of the Sea and its importance for America's
manufacturers. I am Jay Timmons, president and CEO of the National
Association of Manufacturers (NAM). The NAM is the Nation's largest
industrial trade association, representing small and large
manufacturers in every industrial sector and in all 50 States. Our
membership includes both large multinational corporations and small and
medium-sized manufacturers.
Our charge at the NAM is to promote policies that make the United
States the best place in the world to manufacture.
It's no surprise then that ratification of the Law of the Sea
Treaty is a priority for many of the NAM's members. Its adoption is
critical for manufacturing competitiveness in the United States.
While my testimony will focus primarily on mineral development on
the deep seabed, that is not the only reason for the urgency in
adopting this treaty.
In today's global economy, exports are more important than ever.
Ninety-five percent of the world's consumers live outside the United
States, so reaching these potential customers is critical for
manufacturing competitiveness.
This treaty will secure international lanes of commerce and ensure
that manufacturers can export their products efficiently. It protects
our sovereign interests and promotes international commerce.
Secure shipping lanes are a priority for NAM members. Last year,
cargo ships and other ocean liners carried $570 billion of U.S.
exports. Discounting our exports to Mexico and Canada, which travel by
rail and truck, this total accounts for more than 50 percent of our
exports by value and more than 90 percent of our exports by weight.
And, with global commerce comes the need for global communication.
The telecommunications industry needs the Convention to expand the
right to lay and maintain submarine cables in the oceans of the world
and provide stronger protections for cables against damage by other
parties.
We can also strengthen manufacturing by ensuring that manufacturing
in the United States is cost competitive. Currently, it is 20 percent
more expensive to manufacture in the United States than it is among our
major trading partners.
This treaty will help reduce the cost of manufacturing in two
important ways.
First, it will provide new opportunities for energy exploration.
Secure and reliable sources of energy are a significant concern for
manufacturers, which consume one-third of the energy produced in the
United States.
Energy companies need the certainty the Convention provides in
order to explore beyond 200 miles and to place experts on international
bodies that will delineate claims in the Arctic.
And next, it will help reduce manufacturing costs by opening up
access to critical inputs used in many manufacturing applications.

RARE EARTH MINERALS ARE VITAL TO MANUFACTURING

Manufacturers in the United States require access to basic inputs
for the production process in order to become and remain competitive in
the global economy. As manufacturing grows more high tech, ``rare
earth'' minerals are becoming increasingly important to manufacturers
and their supply chains. Rare earth minerals consist of 17 elements
that are important for numerous manufacturing applications, including
in the production of chemicals, defense products, consumer electronics,
wind turbines, hybrid car batteries and other renewable energy
products. They are also used as catalysts for petroleum refining.
Until a decade ago, the United States was 100 percent self-reliant
for rare earth production, with domestic companies producing enough to
supply U.S. manufacturers. Over time, however, U.S. production was
halted as it became economically and environmentally cost prohibitive.
Companies in various countries--including the United States--are
looking at reopening closed mines and developing new deposits, but
these efforts could take a number of years to fully come on line.
The deep seabed offers a new opportunity for the United States to
gain steady access to these vital rare earth minerals. Polymetallic
nodules are located on the deep ocean floor. These nodules typically
contain manganese, nickel, copper, cobalt and rare earth minerals.
However, U.S. companies cannot actively pursue claims in the areas
where these nodules are dense unless the United States ratifies the Law
of the Sea Treaty.

DEEP SEABED DEVELOPMENT

There is no doubt the world is very different today. We are a
global economy, and countries are working feverishly to take our mantle
of economic leadership away from us.
Deep seabed mining is an emerging global industry and, indeed, a
key ingredient to economic growth and competitiveness. We have
companies in the United States with the means to explore and develop
the resources and minerals on and in the seabeds of international
waters, but they will only do so if there is a structure that contains
internationally recognized agreements in place. This treaty will
institute that legal framework upon which companies--and countries--can
rely.
U.S. multinational companies expect other countries to abide by
international standards and rules in other areas, such as intellectual
property, counterfeiting, dumping, and international financing. So do
we. It, therefore, is logical that we would expect the same when
determining our ability to access the resources of the seabed.
The Law of the Sea Convention provides the only internationally
recognized legal regime for extracting mineral resources from the ocean
floor in the deep seabed, an area over which no country has sovereign
rights. The International Seabed Authority (ISA) develops the rules,
regulations, and procedures relating to the deep seabed. The Convention
guarantees the United States, and only the United States, a permanent
seat on the decisionmaking Council of the ISA--with an effective veto
over decisions impacting U.S. interests.
The development of deep seabed claims is incredibly expensive.
Companies in the United States are reluctant to invest heavily in deep
seabed mining because of the risk that their activities would not
withstand a legal challenge since the U.S. is not a party to the
Convention. Conversely, foreign companies, because their governments
have joined the Convention, have access to the international bodies
that grant the legal claims to operate in the deep seabed area. The
U.S. cannot represent the interests of its companies in those bodies.
Lockheed Martin, for example, has two deep seabed claims that
predate the Law of the Sea Convention. It has continued to extend its
licenses through the National Oceanic and Atmospheric Administration
(NOAA). These claims will be instantly recognized by the International
Seabed Authority (ISA) if the U.S. joins the Convention. However,
without the U.S. becoming a party to the Convention, Lockheed Martin is
unable to secure U.S. sponsorship of these claims at the ISA.

CHINA'S DOMINANCE OF RARE EARTHS

Our Nation's ability to access rare earth minerals may be the most
pressing economic security issue we face.
Today, a single country--China--holds a virtual monopoly on the
mining and production of rare earth elements. China produces more than
90 percent of the world's supply and also consumes roughly 60 percent
of that supply. Brazil, India, Malaysia, and Canada are the other
sources of the remaining paltry supply of rare earths.
China recently imposed significant export restrictions on its rare
earth production. In 2010, it announced it would cut exports of rare
earth minerals by 40 percent by 2012. Just last week, Chinese officials
released a white paper defending the country's export control
restrictions on rare earths. Earlier this year, the United States
joined with Japan and the European Union to file complaints with the
World Trade Organization (WTO) over China's export policies on rare
earths. Experts believe China may eventually consume 100 percent of the
rare earth minerals that it produces, jeopardizing U.S. manufacturers'
access to these materials and, at the very least, significantly driving
up costs for companies that use these minerals. These increased costs
would impose significant and detrimental costs on the many millions of
consumers who use these products and could have a profound negative
impact on U.S. national security.
At the same time, the Chinese are accelerating their own deep
seabed mining efforts. They have increased government funding for
seabed mining, and the government announced a $75 million national deep
sea technology base in 2010. China is also expanding its engagement
with the ISA, where it secured one of the four ISA exploration licenses
issued in 2011. The Chinese can boast more than 20 years of sustained
technical and political efforts to develop the deep seabed, funded by
the government.
A close look at the map of claims in the Clarion Clipperton Zone
(CCZ), a location in the Pacific Ocean that is rich with rare earths,
shows active claims by China, Japan, and Russia ``planting their
flags,'' so to speak. Recently published reports have indicated that
the Chinese are actively surveying other claim areas in the CCZ,
including those of the United States. Russia, Tonga, and Nauru were
also granted deep seabed mining licenses by the ISA last year. At last
count, the ISA has 17 pending or completed applications for
exploration--up from just 8 in 2010.
Only ratification of the Law of the Sea Convention and engagement
with the ISA will provide a sufficient mechanism to secure
international recognition of U.S.-based claims and rights.
Manufacturers and consumers will benefit from a more diverse and
competitive market for rare earths, and deep seabed mining is an
opportunity for the U.S. to quickly diversify its rare earth sources.

CONCLUSION

Manufacturing in the United States employs 12 million Americans
with good-paying jobs. The sector supports 5 million more jobs in this
country. Everyone in this hearing room would like to see those numbers
grow. A strong and prosperous country needs a strong manufacturing
sector.
To strengthen manufacturing in the United States, we need to adopt
policies that make our country more competitive in the global
marketplace by reducing the cost differential we face with our economic
competitors. Other nations are actively seeking to knock us from our
mantle of economic leadership, yet, too often, we remain on the
sidelines. Manufacturers can't afford for the United States to sit on
the sidelines when it comes to the Law of the Sea Convention.

The Chairman. No, thank you very much, Mr. Timmons. We
appreciate it.
Mr. McAdam.

STATEMENT OF LOWELL C. McADAM, CHAIRMAN AND CHIEF EXECUTIVE
OFFICER, VERIZON COMMUNICATIONS, INC., NEW YORK, NY

Mr. McAdam. Thank you, Mr. Chairman, Ranking Member Lugar,
and members of the committee. Thank you for the invitation to
speak before the committee today.
I would ask that my full remarks be entered into the
record.
The Chairman. Without objection, they will be.
Mr. McAdam. So far today, you have heard a broad
perspective from my esteemed colleagues on the Law of the Sea.
What I would like to do is discuss ways that the Convention
will strengthen protection for a global undersea cable network
operator. My views are based on more than 20 years in the
telecommunications industry, during which time I have helped
build both fixed and mobile networks domestically and
internationally.
As a major communications company utilizing the
international seabed to provide voice, video, Internet, and
data services over a network of more than 80 submarine cables,
Verizon supports the U.S. ratification of the Law of the Sea
Convention. Fiber optic submarine cables are the lifeblood of
U.S. carriers' global business and the digital trade route of
the 21st century.
Aside from our land-based connections with Canada and
Mexico, more than 95 percent of international communications
traffic travels over 38 submarine cables, each roughly the
diameter of a garden hose. Without these cables, current
satellite capacity could carry only 7 percent of the total U.S.
international traffic.
Any disruption to the global submarine network can have a
significant effect on the flow of digital information around
the world, as well as an impact on the world economy. As one
official from the Federal Reserve noted in referring to
submarine cable networks, ``when communications networks go
down, the financial sector does not grind to a halt. It snaps
to a halt.''
There must be an appropriate legal framework based upon
global cooperation and the rule of law to protect submarine
cables. The Convention provides this necessary framework in 10
provisions applicable to submarine cables. These provisions go
beyond existing international law to provide a comprehensive
international legal regime for submarine cables wherever they
are deployed.
Several incidents recently underscore the urgent need for a
clear and unambiguous framework protecting this vital
communications infrastructure. First, some nations have
attempted to encroach on the ability of U.S. operators to
deploy, maintain, and repair undersea cables. This is in
violation of the Convention. With a seat at the table, the
United States can more effectively oppose these types of
foreign encroachments on restrictions and enforce the
Convention's freedoms to lay, maintain, and repair undersea
cables.
Second, ratification of the Convention will help U.S.
companies better contend with disruptions to undersea cables.
For example, in March 2007, large sections of two active
international cable systems in Southeast Asia were heavily
damaged by commercial vessels from Vietnam and taken out of
service for about 3 months.
More than 106 miles of cable were removed from the seabed
and repaired at a significant cost. It would have been very
helpful if the United States, as well as affected U.S.
companies, including Verizon, had been able to use the
Convention to compensate cable owners, arbitrate disputes over
service disruptions, and deter future violations.
Finally, the Convention will help the U.S. Government and
affected companies respond when countries attempt unlawfully to
require licenses or permits before submarine cables can be laid
or repaired. As an example, Verizon is a co-owner of the
Europe-India Gateway submarine cable system, which passes over
the Continental Shelf claimed by Malta but never enters Malta's
territorial seas.
Even though the Convention allows for such transit without
interference by coastal nations, Malta's resources authority
has threatened legal action if the cable operators do not
obtain a license and pay a significant fee. Not only do these
fees add unforeseeable cost on existing undersea cable systems,
they raise the specter of coastal nations imposing similar
requirements for the sole purpose of raising revenue at the
expense of the cable operators and owners.
By signing on to the Convention, the United States will
have an enhanced ability to effectively support American
parties to such disputes and enforce the treaty's expressly
stated freedom to lay and maintain submarine cables in
international waters without tolls, taxation, or fees levied by
coastal states.
Once the United States is party to the Convention, Verizon
and other U.S. telecommunications companies can work with the
appropriate U.S. agencies to enforce the freedoms to lay and
repair cables, saving millions of dollars over the life of a
cable system. This Convention will improve the reliability of
our critical infrastructure and put U.S. companies on a level
playing field for operating international cable systems.
In conclusion, Senate ratification of the Convention will
provide confidence to U.S. companies that their undersea
submarine cable investments are protected by more specific and
reliable international law. The Convention will provide
tangible benefits to the United States through specific new
protections for critical submarine cable infrastructure.
Verizon urges the Senate to ratify the Convention.
Thank you, Mr. Chairman.
[The prepared statement of Mr. McAdam follows:]

Prepared Statement of Lowell C. McAdam

Mr. Chairman and members of the committee, it is an honor to appear
before you today to discuss the United Nations Convention on the Law of
the Sea. I will discuss the ways that the Convention will strengthen
protection for the global undersea cable networks on which our economy
and national security rely.
My views are based on my more than 20 years in the
telecommunications industry, during which I have helped build fixed and
mobile networks in the United States and other regions of the world.
As a major communications company utilizing the international
seabed, Verizon supports the U.S. ratification of the Law of the Sea
Convention.
Verizon is a global leader in delivering broadband and other
wireless and wireline communications services to consumer, business,
government and wholesale customers in more than 150 countries and for
all of the Fortune 500 Companies. We deliver these services over a
network circling the globe and supported by more than 80 submarine
cable systems.
Fiber-optic submarine cables are the lifeblood of U.S. carriers'
global business. Aside from our land-based connections with Canada and
Mexico, more than 95 percent of U.S. international traffic--voice,
video, Internet and data--travels over 38 submarine cables, each the
diameter of a garden hose. Without these cables, current satellite
capacity could carry only 7 percent of the total U.S. international
traffic.
Fiber-optic submarine cables are the international digital trade
routes of the 21st century. And thus, any disruptions to the submarine
cable global network can have significant impact on the flow of digital
information around the world, with severe consequences for the world
economy. As one official from the Federal Reserve noted in referring to
submarine cable networks, ``When the communication networks go down,
the financial sector does not grind to a halt, it snaps to a halt.''
\1\
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\1\ Stephen Malphrus, ``Keynote Address,'' ROGUCCI Summit, Dubai,
U.A.E., October 19, 2009.
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Given their importance to global networks and the world economy,
there must be an appropriate legal framework based upon global
cooperation and the rule of law to protect submarine cables. The
Convention provides this necessary framework in 10 provisions
applicable to submarine cables, going beyond existing international law
to provide a comprehensive international legal regime for submarine
cables wherever they are--whether in territorial seas, in Exclusive
Economic Zones
(or ``EEZ''), on Continental Shelves, or on the high seas. Once the
Convention is ratified, the United States Government will be able to
insist on compliance by other nations with these protections. Several
recent events underscore the urgent need for a clear and unambiguous
framework for protecting this vital communications infrastructure.
First, some nations have attempted to encroach on the ability of
U.S. operators to participate effectively in the deployment,
maintenance, and repair of undersea cables. To oppose these types of
foreign encroachments or restrictions effectively, the United States
must have a seat at the table where it can enforce the Convention's
freedoms to lay, maintain, and repair undersea cables.
Second, ratification of the Convention will also help U.S.
companies better contend with disruptions to undersea cable service.
For example, in March 2007, large sections of two active international
cable systems in Southeast Asia were heavily damaged by commercial
vessels from Vietnam and taken out of service for about 3 months. More
than 106 miles of cable were removed from the seabed and repaired, at a
cost of more than $7 million. It would have been very helpful if the
United States, Verizon, and other affected U.S. companies had been able
to use the Convention to compensate cable owners, arbitrate disputes
over service disruptions, and deter future violations.
Third, the Convention will also help the United States Government
and international companies respond when countries attempt to
unlawfully require licenses or permits before submarine cables can be
laid or repaired. As an example, Verizon is one of the co-owners of the
Europe India Gateway submarine cable system, which passes over the
Continental Shelf claimed by Malta but never enters Malta's territorial
seas. Even though the Convention allows for such transit without
interference by coastal nations, Malta's Resources Authority has
threatened legal action if the submarine cable operators do not obtain
a license and pay a fee. Not only do these fees add unforeseeable costs
on existing undersea cable systems, they raise the specter of coastal
nations imposing similar requirements for the sole purpose of raising
revenue at the expense of the cable owners. By signing on to the
Convention, the U.S. will have the discretion to add its diplomatic
efforts in the ongoing dispute with Malta and enforce the treaty's
expressly stated freedom to lay and maintain submarine cables in
international waters without tolls, taxation or fees levied by coastal
States.
Finally, the Government of India imposes onerous requirements on
cable ships outside its territorial seas, including submarine cable
repair ships. India requires cable ships to enter one of its ports for
a security inspection, which triggers a customs bond against the value
of the ship and any cable being carried. Although the bond may be
repaid at the end of the repair, other fees are not. Getting a permit
can take more than 3 months. The net result: India has become one of
the most expensive places to maintain and repair submarine cables, with
unnecessary costs running to the millions of dollars.
Once the United States is a party to the Convention, Verizon, and
other U.S. telecommunications companies can work with the appropriate
U.S. agencies to enforce, when necessary, the freedoms to lay and
repair cables on the Continental Shelf and the EEZ--saving millions of
dollars over the life of a cable system, improving the reliability of
our critical infrastructure, and putting U.S. companies on a level
playing field for operating international cable systems.
If the Congress fails to act to ratify the Convention, U.S.
companies will continue to operate at a disadvantage vis-a-vis our
global counterparts, indeed having to work through our international
providers and their respective governments to seek protection of their
submarine cable infrastructure under the Convention.
In conclusion, Senate ratification of the Convention will provide
confidence to U.S. companies that their undersea submarine cable
investments are protected by more specific and reliable international
law. The Convention provides tangible benefits to the United States
through specific new protections for critical submarine cable
infrastructure. Verizon urges the Senate to ratify the Convention.

The Chairman. Well, thank you very much, Mr. McAdam. I
really appreciate that.
I apologize for having had to step out just for a minute. I
think you will be able to tell your grandchildren that while
you were speaking, history was being made. It is just that it
wasn't exactly your speech that made it. [Laughter.]
Mr. McAdam. Wouldn't be the first time.
The Chairman. But it is my understanding--I don't have the
full story here. I think Tom also got a message, if I am
correct. But I think the entire ACA was upheld, with the
exception of the Federal Government's power to terminate
Medicaid funds. That was very narrowly drawn.
But otherwise, that is what I understood. Is that what you
understood, Tom?
Mr. Donohue. Yes. This is very complicated. First of all,
the individual mandate was found to be a tax. And it appears,
and I have very little information--we had talked about this--
that the Chief Justice moved to the other side so that he could
write the opinion, and I think the opinion is going to be very
interesting to read. And so, we probably none of us want to say
anything for the next half hour.
The Chairman. I think that is pretty accurate. We will wait
and get a readout at the appropriate time.
But let me come back, if we can, to the importance of what
is being said here. And I think your statement today, Mr.
McAdam, actually is a very, very important one because I don't
think a lot of people have focused on the extent to which an
entire society--defense industry, finance, banking, all of
this--is wrapped up in the movement of information and the
degree to which the ability to protect that is obviously very,
very significant.
And to have rights with respect to it that are clear is
obviously critical with respect to any kind of dispute and/or
intervention by someone, by a terrorist group or by a nation
state. And obviously, one could envision any such intervention
taking place in the world we are living in today. So I
appreciate what you have said.
And it raises the larger question that I want to ask all
four of you. Some of the folks who have raised questions about
the treaty--and we don't challenge anybody's right to do that.
Obviously, there are different opinions here about these
things. But they have argued that companies, that there is
nothing to bar you from just going out. Just to go out and do
what you want to do.
They argue that you can drill for oil and gas in the
extended shelf, that you can mine the deep seabed, you can fix
your cables. Just go do it, and if there are any problems, we
will just use the U.S. Navy and U.S. military power to protect
those operations.
Now I am not going to go into any of the questions raised
about war powers resolution, the politics of war, any of that.
Just give us the practicalities. What does that approach do for
your ability to, in fact, go out and do it, if anything? Could
each of you respond to that?
Maybe you want to start, Mr. Gerard?
Mr. Gerard. Surely. I think in simple terms, Senator, the
thing to remember is the word ``certainty.'' And as you quoted
earlier, Marvin Odum, chairman of Shell in the United States,
made a simple comment. And he said without certainty, the risk
is too high.
And fundamentally, from an oil and gas perspective, that is
what we looked at. We go through political calculation, risk
calculation on every project. And if there is question as to
who has that right or who owns that land or who has access, we
might be able to have a theoretical conversation about what the
U.S. Navy can or cannot do, but we are talking billions of
dollars of investment.
One quick anecdote, Senator, that you might appreciate.
Shell Oil is moving, hopefully, to the Arctic, even as we
speak. A few days ago, they just released two of their vessels
from the Seattle region, headed up to the Arctic.
They are in the fifth year of a permit. They have invested
$4 billion. That is a ``B,'' $4 billion. And hopefully, this
summer, they will get their first permit for their first drill
hole.
So when we talk about investments, we are talking about
multibillion dollar efforts here. So unless we have certainty
and know who has got the right claim, who controls that area,
our money will not go there, and I think Marv Odum made that
quite clear in his statement.
The Chairman. Yes. Mr. Donohu.
Mr. Donohue. Let me state for 1 minute, Mr. Chairman, on
the issue of capital that it takes--whether it is to dig up
rare earth minerals or whether it is to go for oil and gas or
whether it is to make other advances, capital doesn't come if
it isn't safe. Money goes where it is safe, where it can be
profitable, and where it is protected.
And so, when we are talking about certainty, we are talking
about a form of protection that we know we can get the permits,
we can do our business. And by the way, of course, we can
always say we have a great Navy, even though we are shrinking
the size of the Navy and we haven't done sequestration yet and
all of that sort of thing.
I think it is a lot cheaper. I think it is a lot smarter. I
think it is a lot more credible in the courts of the world to
be a party to this treaty. And I think we must keep sight of
the fact that when you are on the inside, you can do something
about it. When you are on the outside, are you just going to
tell them we have great massive Navy power, and we are going to
go do what we want to do?
If it ever came to that, of course we can. But I think it
is important. We are going to have competition for these areas.
If we don't lay a claim to these extended areas, there are lots
of other people. As you mentioned, I think it was you, in the
Arctic, we have got the Russians. We have got--the Chinese will
be there. Everybody is up there. Everybody wants to get in on
the deal.
Well, why don't we just put our footprint there? All we
have to do is put this treaty in place with the adjustments
that should be made, put our people there, and lay claim to
what is rightly the resources of this country.
The Chairman. Anybody else want to? You don't need to. Yes,
Mr. Timmons.
Mr. Timmons. Well, 161 other countries would likely not
recognize our claims if we are not a part of the treaty and
they are. The world is a very different place today than it was
40 years ago. We are a global economy. We compete
internationally. We are competing for those 95 percent of
consumers who live outside of the borders of the United States.
Many of the companies that would be able to invest and take
advantage of the resources of the deep seabed are international
in nature, and they have operations in other countries. And
through commitments and treaties, they rely on other countries
to follow the rules. Whether it be in areas like dumping or IP
protection or financing, these other countries--or these
companies will want to follow the rules as well, or they simply
will not invest.
The Chairman. Now let me ask you one other question with
respect to this. That we are hearing from some people--we are
hearing from some people that this may be a back door way of
enforcing the climate change treaty, something like the Kyoto
Protocol.
Now I know we have had many discussions, Mr. Donohue, about
that. We have worked together on some energy stuff. I know the
Chamber's and other people's concerns about costs being dumped
on you that you can't handle and make you noncompetitive. And
that has been a major issue as we wrestle with how to deal with
these things.
So I will ask each of you the very same question. Do you
have any concern that joining the Law of the Sea is going to
require the United States to somehow be mandated into the Kyoto
or any other climate change agreement?
Mr. Donohue.
Mr. Donohue. Well, if you read what seems to be the
treaty's environmental interests, we have met all of them. All
of them, period. And if we were a party to the treaty and
inordinate or particularly inappropriate climate demands were
made on us, we would have the ability to veto it. Veto it. It
takes one veto.
The Chairman. Let me ask you--yes, Mr. Timmon.
Mr. Donohue. You tell me how you think that is wrong, and I
will be happy to discuss it with you.
Mr. Timmons. I think that is a very important point that
Mr. Donohue has just made. We would have the only permanent
seat on the Seabed Authority, and we would have the right to
object to any provisions that are put forward.
That said, there is nothing in the treaty that I have read
that indicates that we would have to join Kyoto or any other
treaty of that type. And that is coming from an organization
that does not support Kyoto and has serious reservations about
a cap-and-trade regime.
The Chairman. Some critics have additionally argued that if
the U.S. joins the Convention, we are going to lose jobs. Does
the Chamber of Commerce agree with that?
Mr. Donohue. No. If you expand the economy, if you--and
many of our jobs in the future are going to come from mining,
from energy, from trade, and this clearly is a treaty that will
enhance that, not detract from it. And I believe, as we have
said publicly not only about this treaty, but about energy,
mining, and other industries, these are where a lot of the jobs
of the future are.
I think it would create jobs.
The Chairman. Anybody else want to comment on that?
Mr. Gerard.
Mr. Gerard. I would just say, Senator, clearly it will be a
job creator.
Let me just add one other anecdote, and I know I am raising
a touchy issue here--Keystone XL pipeline. A lot of people
don't realize the Keystone XL pipeline has 2,400 U.S. companies
involved in its development from 49 different States. We have
only not found someone in the State of Hawaii that is involved
in the Keystone XL pipeline development.
So when you look at energy infrastructure, energy
investments, they are huge job creators, and they occur places
that you least expect. The multiplier effects in energy,
particularly in oil and natural gas, are very significant.
And so, we see nothing but upside through ratification,
through the accession process to secure those rights, hopefully
so we can secure the opportunities to develop that resource,
and it will flow clear across this country in a variety of
different ways.
The Chairman. Thank you.
Yes, Mr. McAdam.
Mr. McAdam. Yes, Mr. Chairman, I would just point out in
our industry, telecommunications, the buzz word, No. 1 word is
``reliability.'' And we invest as a company $16 billion to $17
billion a year into our networks.
And we in the undersea cable area in particular invest in
mesh networks so that we can avoid issues with large storms or
earthquakes off the coast of Japan. So we invest to get a level
of certainty for our customers.
When a nation takes a unilateral action like I referred to
in my testimony, you can't counter that with another
investment. So this treaty allows us to have certainty around
those sorts of unilateral actions and the belief that we can
resolve any conflict amicably and quickly.
And so, my view is it will help us with our certainty
around investments. We will make more investments, and that, in
turn, will create more jobs.
The Chairman. My time is up. Let me come back another
round.
Senator Lugar.
Senator Lugar. Thank you, Mr. Chairman.
I want to pursue some more of the certainty argument. This
was made by others in earlier hearings of the committee, and
yet we pursued this during the last hearing with former
Secretary of Defense Don Rumsfeld, who testified against the
treaty.
So I raised the question with Secretary Rumsfeld how he
would deal with the situation in which American companies were
testifying, as you have today, that without certainty they
would not be prepared to invest the billions of dollars that
are required. Thus, there would not be the creation of the jobs
nor the degree of energy independence or the other attributes.
Now his response, and I hope I do justice to it, he
observed that while businesses always prefer greater certainty,
they enter into uncertain investments all the time when they
believe the potential benefits justify the risks. On that
basis, he suggested United States companies that saw potential
benefits from deep seabed activities would go right ahead and
make those investments even if the United States did not ratify
the Convention because as a practical matter, there is no
impediment to their doing so outside the Convention rules.
And second, he observed U.S. companies might consider
entering into joint ventures with companies from countries that
are parties to the Law of the Sea Convention. They could,
therefore, secure rights under the Convention in that way
without the United States needing to join the Convention
ourselves.
Now these were supporting comments in terms of not
ratifying, and the basic thoughts of the opponents were that we
are forfeiting sovereignty. We are forfeiting money through the
royalties and those aspects.
And finally, that there simply is no reason why we should
not proceed anyway. We have the greatest fleet on earth. And if
we are challenged, we have the ability to rebut whoever is
challenging us.
So this is repetitious. But nevertheless, these arguments
have been strongly made. That is the reason we are going
through these hearings for the third time, not having had
ratification, starting from 2003 onward.
How do you respond to Secretary Rumsfeld suggesting that
after all is said and done, you like certainty, but you take
risks all the time. And you have to sort of consider what the
profit may be and proceed, given our fleet and given our
general stature in the world.
Mr. Gerard, do you have a thought about that?
Mr. Gerard. I do. There is risk, and then there is risk,
Senator Lugar. In this case, there is risk, everyday business
risk associated with doing business and making risk assessments
and judgments. Very fundamental to that risk assessment is
property right--who has right, who doesn't have right. This is
a very fundamental issue.
When you go out in the open waters beyond our 200-mile
nautical mile border today, the risk goes up very
significantly. I would suggest if the return is that great,
then there would be people there today, and there aren't.
To the second point that he has raised is probably correct.
What will eventually happen is U.S. companies will be forced to
partner with other nations who have acceded to the treaty--the
161, I believe, that were mentioned earlier--to find
opportunities around the globe because they cannot find
certainty or protect their own interests through U.S. law,
through U.S. practice. And so, we would find them teaming up
with the Russians, with the Chinese, and others where their
preference would be to take the lead and to go alone or to find
others as their junior partners in assessing and managing this
risk.
Senator Lugar. By definition of these partnerships, we
already divide up the profits, leaving aside the royalties in
the sixth year.
Mr. Gerard. Well, that is right. And plus, you are at the
behest of others in looking for those partners. We have, I
might say, the best companies in the world, the most
technologically advanced. We are on the cutting edge of the
abilities to go out in these deep waters and produce these
energy resources.
Wide open risk without any limitation is a clear detriment,
and as you have heard the people making those decisions in the
boardrooms, the risk is too high.
Senator Lugar. How do we deal with this second proposition
that is being offered? And that is that after all we do have
the largest fleet, the only fleet that is everywhere. This is
too bald a statement, but the idea is if there is a problem
with somebody, you just shoot them up. You just plow right on
through.
That people recognize might and so forth. Therefore, all
this quibbling over the royalties and so forth, we are just
simply as a nation losing our sense of sovereignty, our sense
of our ability, really, to manage things. Why doesn't that work
really in the real world?
Mr. Donohue. You know, Senator, we are a party to many
agreements around the world, and there was a lot of opposition
to them. A lot of people were upset that we went into the WTO.
What we have found, a single important thing we have found
it was a way to adjudicate differences between countries. And
most of the time, the United States has won. On occasions, we
have lost, and even then, we have ignored some of those things
to our own detriment.
But I happen to think--while I have great confidence in the
military, I happen to think it would be better if we could
avoid most of the need to confront militarily by joining an
organization that 161 countries are already in, couldn't all be
wrong, and having a way to participate vigorously in the
process.
Clearly, the amount of money that you are going to pay in
some sort of royalties or fees is a fraction of what the
Government is going to make on this deal. And clearly, it would
be much, much better to find a way to explore these tremendous
resources without having to do it under the protection of naval
power.
I mean, under that argument, we could sail across any--go
anywhere in the world and pull up with our Navy and say, by the
way, we are going to dig right here, and maybe your--and those
people may be claimants to that property because of their
participation in the treaty. I wouldn't know. But I just think
the argument that we are the toughest guys on the block is too
simple. We will just go in there and do what we want is
probably not the best argument for us to make.
Mr. McAdam. Senator, if I could just, a couple comments on
both of your questions here. While we certainly do accept risk
and we balance that in all of our investments, it is very
prudent for us to look for opportunities to lower risk wherever
we can. And this seems like a very reasonable way to do that.
We do partner with many different companies to do these
large undersea cable networks that I talked about. And in some
of the disputes that I have mentioned, we have had to go to
countries like the U.K. and France and ask them, frankly, to
carry our water for us. And it seems almost an assault on our
sovereignty that we have to go do that because we don't have a
seat at the table.
For me to try to convince the Navy to go dispatch a
destroyer to fight over a garden-hose-size cable going into
another country seems to be a bit of overkill.
Senator Lugar. Thank you very much.
The Chairman. Senator Corker.
Senator Corker. Thank you, Mr. Chairman. Thanks for having
this hearing and your diligence in having many of these.
And thank you, as witnesses, for being here. I know most of
you well, and I appreciate you being here.
And I will say that it is a little bit of an out-of-body
experience to have especially you, Mr. Gerard, in here talking
about something the administration is doing to help the oil
industry. I think it is not a pejorative statement to say that
they have done everything they can to hurt the oil industry.
The Keystone pipeline that you talked about is a great
example of this administration basically trying to keep
something that is in the interest of Americans and American
jobs from happening, very--it looks like for political reasons.
And yet, you know, we have had members up here, people up here
many times talking about this being good for the oil industry.
So Secretary Clinton was up here talking about the same
thing. So, as you can imagine, I am sitting up here, it is a
little bit of an extraordinary experience. And I wonder if you
could explain to me why you think the administration is working
so hard to help the oil industry with this treaty, and yet
domestically doing everything they can to damage it and keep it
from being productive?
Mr. Gerard. Well, I appreciate the question, Senator. And
the irony wasn't lost on me either when I was invited to
testify.
But let me just say this. Let me step back, and let us take
a broader world U.S. view. What we are talking about here is
the future of the country and where we will stand in that
global economy and our potential opportunities.
And so, in our mind, we separate, if you will, those
current domestic challenges or, in our view, inadequacies in
terms of allowing us to produce our own domestic oil and
natural gas. I think what you are alluding to, Senator, is 85
percent of our domestic outer Continental Shelf is off limits
today, as a result of U.S. policy where we do have sovereign
rights currently.
We are frustrated by that. Our views on that have not
changed. But we look to the future, particularly in the Arctic.
And under the Expanded Continental Shelf, we have the potential
to move that 200-mile radius or limit out to 600 miles.
Senator Corker. But let me ask you this question.
Mr. Gerard. We think it is a big deal moving forward.
Senator Corker. Right. And I understand. I appreciate you
being here, and I appreciate you experiencing the irony, too.
So you would be better off----
The Chairman. We want you to appreciate his full answer,
though, too.
Senator Corker. Well, I had a feeling it might last a long
time. [Laughter.]
The Chairman. There is a lot to say. You have got to stand
up to these things.
Mr. Gerard. I will be brief. Go ahead, Senator.
Senator Corker. The 200-mile piece, though, is probably
easier gotten to by U.S. companies, is it not, and the extended
piece is deeper and more difficult to explore, is it not?
Mr. Gerard. Yes and no. To oversimplify it, in some places
in the Arctic, the water is relatively shallow. In some areas
off the Pacific coast, it goes deeper quicker. The Atlantic a
little shallow. So it just varies in the area around the world.
Senator Corker. You can understand the perplexing nature of
having Secretary Clinton and others up here advocating for the
petroleum industry when what we see here domestically is
something very different. But I know that everybody----
Mr. Gerard. I understand.
Senator Corker. Yes, thank you so much.
Mr. McAdam, I heard you talking about laying cable on the
seabed, and I know you have companies that operate in the U.K.
As matter of fact, you have a major base of operations there,
and I know that the U.K. is signatory to this treaty. So I
guess I am confused.
If you had issues, and I know you operate on a global
basis, and most of the companies that the Chamber represents
that care about this treaty operate all around the world. I
mean, these are not companies that operate in Soddy-Daisy,
Tennessee. I don't understand why you can't adjudicate these
claims through the U.K. if we are not signatory. It doesn't
make any sense to me that all of this is riding upon the United
States, us being signatory to this treaty.
Mr. McAdam. Well, Senator, I just feel that we would be
much more effective having a seat at the table and having that
discussion. To go to the folks in the U.K., who are good
partners certainly, and try to convince them to carry our water
in talking to another country I think is difficult for them.
They have to balance that with all their priorities, and I
think that one step removed makes us less effective.
Senator Corker. So, in each case, a company--let me make
sure I understand correctly. A company doesn't have the ability
to try to make claims itself. It has to have a country
representing them in the process. Is that the way it works?
Mr. McAdam. Well, we would certainly be active with our
legal folks and with our operations on the ground. But our
opportunity to be backstopped by the Federal Government is
important to us and I believe will make us more effective.
Senator Corker. But to answer the question, clearly, you
have the ability to make claims directly, do you not? You don't
have to come and ask permission of the U.S. Government to do
so.
Mr. McAdam. Certainly. We would use existing legal
frameworks.
Senator Corker. So to say--so to say that our country has
to be signatory to these treaties--to this treaty when,
basically, every one of these companies operates on a global
basis and has other outlets through which to make claims is not
a true statement, is it not?
Mr. McAdam. Well, obviously, we have operated for years
without the treaty. But our point is today merely we would be
more effective if we had it.
Senator Corker. And tell me how you would be more
effective. Because I would assume that the many people that
work for you in the U.K. believe that they have a very
effective government that they work with, and I am sure when
you are there before their governing bodies, you are telling
them how effective they are.
So tell me why that would make you more effective. I am
having a hard time understanding that.
Mr. McAdam. Well, I think the issue is that you have many
countries around the world, like the example of Malta that I
used, that can take this sort of unilateral action, and there
isn't a framework for redress. So this gives us the ability to
not only work with Malta directly ourselves, but also to bring
in the State Department or other Federal Government rather than
having to go a circuitous route through the U.K.
Senator Corker. Yes. Now the issue of Malta is not one of
those issues where there is even a veto process, is there? I
mean, we can weigh in. But just to cite your Malta issue, that
is not something where the U.S. Government would have a veto
process. That is one where we would have a voice among many
other nations in trying to cause that to be successfully agreed
to. Is that correct?
Mr. McAdam. I would have to look at the specific terms of
the agreement and get our legal experts to weigh in on that. I
am, frankly, not competent to offer the answer to that. If you
would like, I will get that for the record, though.
Senator Corker. So, look, I appreciate all of you being
here, and I don't know whether you are being here as good
soldiers or whether this is something that you are passionate
about. But you certainly are people that I respect. And I am
very neutral on this. I am here to learn. I have been to every
one of these hearings, and certainly, there are people in the
audience, Senator Warner and others, that I respect greatly in
addition to all of you.
I do want to say to you, Mr. Donohue, who I know well and
certainly have worked closely with, your comment regarding the
veto on the climate issue is categorically incorrect. And I
would like for the record for your legal person to give us an
opinion to that statement because I don't think that is
correct.
And I know that you are here, and you don't know every word
of the treaty, as I don't. but I think you are mixing apples
with oranges. And on the issue of the climate issue, we do not
have a veto process in place for our own country.
So if you could have your legal folks tell me differently
as part of the official record or tell me that I am right, I
would greatly appreciate it. But I think you are very wrong on
that, and you can respond.
Mr. Donohue. Well, Senator, it wouldn't be the first time I
am wrong, but I am very enthusiastic. I am not here on behalf
of anybody else. As the Senator indicated, I was the one that
was pushing him to do this.
I will be very happy to have our legal guys do that. I
think they are probably very involved for the next 24 hours or
so on what just came out of the Supreme Court. But by early
next week, we would be very happy to do it. And I will come up,
now that I understand that you are neutral on this and trying
very hard to, as we all did for a long time, to get a good
grasp on it, I will make it my business to come and talk to you
about it.
Senator Corker. You might bring that legal opinion with
you.
Mr. Donohue. No, I will send it beforehand so you have a
chance to look at it.
Senator Corker. And I say to all of you, look, I hope that
what we will do--I do want to make the right decision on this
treaty, and as in every issue, I really want to understand the
details. But I hope that the responses will be deep and not
rhetorical. I mean, I think there are a lot of details that
many of us are concerned about, especially as it relates to the
climate issue.
But other issues that really matter to us, and some of the
sovereignty issues really matter to us. And again, I respect
all four of you. I know that there is no way that you could
possibly know the details of this. You are here because you are
the leaders of your organizations, and you have people in the
bowels of your organizations that do know the details. But I do
look forward to future conversations and very much thank you
for being here, and I will see, I am sure, very, very soon.
Mr. Donohue. Senator, just one point for the record. You
know that the Chamber is perhaps the most aggressive
organization in the city on climate issues that affect
adversely this country and our economy. And talk about
something I am really worried about is the climate decisions
that were made just 2 days ago by the District Court. That is a
real problem.
So we have very good people on this. I will be very happy
to get you an answer to your question. And I just want you to
know I looked at this as a worrisome issue until I believe I
have been carefully advised that we are OK here. But I will get
that and come and see you.
[A written response from Mr. Donohue to the question
follows:]

Two separate issues were under discussion at the hearing. One
involved the United States veto over the important actions of the
International Seabed Authority (ISA), and the second involved the
concern that the United States approval of the Treaty would obligate
the United States to comply with the Kyoto Protocol or other
international environmental agreements that the United States has not
approved.

UNITED STATES INFLUENCE WITHIN THE ISA

LOS's 1994 Agreement provides the United States a guaranteed
permanent seat on the ISA's 36-member Council. We are the only nation
afforded this position. The 1994 agreement also requires that Council
actions must be by consensus on issues such as rules, regulations, and
procedures involving the ISA's deep seabed mining royalties. Because
``consensus'' is defined as the absence of any formal objection, the
United States enjoys a veto on important matters--including royalty
distribution--decided by the ISA. Furthermore, the ISA's structure
makes the Council the key decisionmaking body of the ISA. The rules and
procedures for distributing the ISA's royalty payments require the
Council's recommendation in order for the ISA's Assembly to act. Thus
the United States role in the ISA is properly recognized as a veto.

UNITED STATES ENVIRONMENTAL OBLIGATIONS UNDER LOS

As you know, no organization has been more adamantly opposed to the
Kyoto Protocol than the Chamber. As a result, we are extremely
concerned by efforts to impose Kyoto onto the United States and
American businesses.
The Chamber is not concerned that United States approval of LOS
would impose any new environmental requirements on the United States
and American business primarily for two reasons. First, LOS does not
require parties to comply with other international environmental
treaties. Thus, the Kyoto Protocol does not apply to the United States
because we are not party to it.
Second, the United States already is in compliance with any LOS
environmental provisions. Therefore, the United States would not be
required to adopt additional environmental laws, regulations, or
policies that might affect American business. Specifically, Article 212
of the LOS Treaty requires states to ``adopt laws and regulations to
prevent, reduce and control pollution of the marine environment from
the atmosphere.'' The United States has strong atmospheric pollution
laws and is already in compliance with this provision.

Senator Corker. And if you could, since--and I thank the
chairman for giving me an extra minute or two.
Mr. McAdam, I would love it if somebody from your
government relations office would share with me truly, since
you operate around the world in most of these companies that
Mr. Timmons and Mr. Donohue and Mr. Gerard represent do, I
really would like to know for a fact why it enhances a
company's ability to make claims when they can easily make it
through any other country that they operate in.
I would really like to know that. If you would send that to
me, I would appreciate it. And again, I ask these questions
with great respect.
[The written information requested from Mr. McAdam
follows:]

Under the treaty, it is the State Parties who can best protect
their constituents from unlawful incursions against domestic companies'
submarine cable interests. If the United States were a party to the
treaty, it could act on behalf of United States companies to protect
U.S. interests in undersea cables. Without this protection, United
States companies are forced to seek out the protection of foreign
governments to help safeguard U.S. investments.
Although these nations may make claims on behalf of foreign
companies in their discretion, in practice obtaining such assistance
may not be straight forward or timely. While U.S. companies in some
instances in the past have been able to join with foreign companies who
can appeal to their governments, there is no guarantee that such
collaboration will be available in the future.

The Chairman. Can I take a moment? I want to add--Senator
Corker, if I could, just for a minute? First of all, you know
how much I appreciate the due diligence you do on this stuff,
and I really am grateful to you for taking the time and looking
at this without all the external influences and kind of working
through it.
But let me just say to you with respect to the dispute
resolution--and we will get this for the record. You have asked
it of Mr. McAdam, but we will also have our own counsel add in,
which is important, and we can spend some time with you on it.
You cannot--only a country has access to dispute
resolution, not an individual company. So it is irrelevant that
they may have a company working here or there. They have to get
the country to represent them. And that is where we are
disadvantaged is that the United States can't bring that on
behalf of our own company. You would have to persuade another
country, not the company within the country.
So they don't have some sort of ability because they have
affiliates around the world to just use the affiliate to
advantage their interest. That is No. 1.
No. 2, with respect to the veto, there is sort of a split
decision here. It is correct that the ISA, which is the larger
group of the representative countries, doesn't have a veto. The
Council has a veto. Mr. Donohue is absolutely correct with
respect to the Council and the issues within the Council. And
there are specific issues limited to the council.
Senator Corker. But climate is not one of those.
The Chairman. Let me just finish. You are correct. Climate
is not one of those. But--and here is the critical ``but'' for
you.
Senator Corker. OK.
The Chairman. There is a section which specifically states
that you cannot be held accountable to any international law
regarding climate or anything else unless you, as a nation,
have signed up to it, and the U.S. Senate has never ratified
anything. So under this treaty, in fact, we are completely
protected as to any environmental effort because, one, it can't
come through the Council where we have the veto, and two, it is
specifically stated within the confines of the treaty that you
only are subject to something if you have signed up to it.
And nobody can come through the back door to make you sign
up to it. So I think when you see that, I think you are going
to feel completely comfortable.
Final question, let me just ask you. I want to just get
this on the record. Is any one of you here because you are a
good soldier, or are you here because you are representing your
industries and you are expressing the views of the people you
represent?
Mr. Timmons.
Mr. Timmons. The latter, Mr. Chairman.
The Chairman. Mr. Donohue.
Mr. Donohue. I asked you first to please get busy on the
deal, and you did, and I thank you very much.
We will talk some more, Senator. This is a very serious
issue in so many ways. And I think this is a vigorous
discussion. And Mr. Chairman, thank you for resolving all that
issue. My lawyers will get it done a lot faster now.
The Chairman. Thank you.
Mr. Gerard.
Mr. Gerard. Until the question was asked, I didn't view it
as being here in support of the administration. Our view
transcends political party and administrations. Our view,
regardless of who is in the White House, we look at the
substance of the treaty, and that is our focus.
The Chairman. And I want to emphasize again that the
administration did not ask us to bring this treaty out now. We
went to the administration and said, ``What do you think about
it?''
Again, it is clear on the record here, and Mr. Donohue has
made it clear that he made the request for us to be here at
this time initially, and that is what got us going.
Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman.
And thank you all for being here. I apologize for missing
your testimony. I was at an energy hearing. So I am actually
going to start with that, Mr. Gerard--energy.
And I wonder if you could talk about why this treaty is
important to the energy security of the United States. In your
letter to the committee, you stated that accession will provide
greater energy security by securing the United States exclusive
rights for oil and gas production. So could you elaborate on
that and why; talk about why it is important?
Mr. Gerard. Surely. It gives us expanded opportunity with
the extended outer Continental Shelf, the extended resource to
develop those resources under the guise and direction of the
United States and U.S. law. What we are focused on more
specifically right now, which is talked about regularly, is the
Arctic. It is estimated that the Arctic has one-quarter of the
world's oil and gas reserves.
That is a big number.
And right now, as we look at it, we will be limited in our
ability to go beyond our 200-mile Exclusive Economic Zone
unless we become parties to the treaty and, thus, can claim the
Extended Continental Shelf. It is estimated our claim up there
could go as far as 600 miles. It would give us a very
significant footprint.
And coming back to the fundamental issues I talked about
earlier before you got here, Senator, certainty is the key. If
we have knowledge, understanding, and confidence into who has
the rights, who controls, what law controls, it is much more
likely the investment will flow. If the risk is too high, the
investment will occur, but it will go elsewhere in the world.
The world continues to shrink as to our ability to produce
these resources. With modern technologies today, we can do
things we couldn't think of 30 years ago when the treaty was
first written and talked about. So it is a very significant
time for us on a global basis to look at the potential for oil
and gas development.
Senator Shaheen. Thank you.
Mr. Donohue, in your opening remarks, you stated that
companies will be hesitant to take those investment risks and
which echoes what Mr. Gerard just said. I wonder if you could
talk specifically about any sector of the U.S. business
community that opposes U.S. accession to this treaty? Have you
heard from anybody who opposes it?
Mr. Donohue. There are a number of think tanks and others
who are--represent some elements of the business community.
There are, as Senator Corker indicated, people who are
concerned about environmental issues.
But across the board, the people that we represent are
concerned about the following issues. First, energy, which is
the financial base on which we are going to fix this economy
and give us more energy security.
Second issue is some legal certainty, when 161 other
countries are involved in the process of basically divvying up
the natural resources in the sea. Also a lot of very important
issues here on navigation, on supply chain management, on the
ability to get at rare earth minerals.
This, to me, this is very important, and it is an easy
issue because you have all--you have many protections from any
difficulties that might come from being a part of the treaty.
You have many exclusions because you are not a part of the
treaty.
And as everybody on the panel indicated, you obviously have
the protection of our Armed Forces. But we can't sort of run
around the world doing our business like that every day,
although I would say that the Chamber is a vigorous supporter
of our Armed Forces because you can't participate in a global
economy without security.
And I think there is a very clear process in the Chamber
that brings the great preponderance of our members to being in
support of this. Senator, you might imagine, with more than
300,000 members and the ability to legally represent 3 million
companies, I can never get everybody to agree on anything,
including what day it is.
Senator Shaheen. But just to be clear, you haven't heard
from the businesses that you represent any significant
downsides to this country ratifying this treaty?
Mr. Donohue. Exactly. That is correct. And I am more
comfortable myself after I have spent a good deal of time
exploring that question with our own associates and with people
around the city and with Members of the Congress. And I thank
you for that question.
Senator Shaheen. Thank you.
Mr. Timmons, Mr. Donohue talked about the rare earth
minerals from China just now, and you pointed out in your
testimony that China is in the process of sharply reducing
those exports and that they may eventually consume all of them
within the country. Can you talk about what the impact might be
on both what the advantages of our ratification of the treaty
gives us as we are competing for those rare earth minerals, and
then what would happen if China, in fact, did consume what it
is currently exporting all within country and what impact that
would have on consumers and on businesses and jobs in this
country?
Mr. Timmons. Yes. If I could start with the latter question
first? If we don't ratify the treaty and businesses don't make
the investments necessary to take advantage of the rare earth
nodules that exist on the seabed floor, and China does use all
of its rare earth materials, it would be devastating to the
American economy, to manufacturing, and to jobs in this
country.
The bottom line, as has been stated many times on this
panel, is that businesses require certainty before they make
multibillion dollar investments. Mining on the seabed floor is
not an inexpensive proposition. It requires years of studying,
planning, mapping, and significant investment to do so. And
companies simply aren't going to do that without the certainty
that the treaty provides.
One of the reasons that we have the strong military that we
have all acknowledged and that we all admire is because we have
economic might in this country. The rare earth debate is one
that businesses have been quite aware of for a number of years,
but it is rather new in the public dialogue. But it is one that
will determine our ability to compete and succeed in the
international marketplace and this global economy, and it is
one that we simply cannot take for granted moving forward.
Senator Shaheen. And you talked about the importance of
certainty before companies are going to be willing to invest
large amounts of money that are required. Can you talk about
the extent to which those investments are happening right now,
or are those sitting on the sidelines waiting to see what
happens with this debate?
Mr. Timmons. They are sitting on the sidelines for the most
part, Senator. And I would say that it is not only in this
realm. I think it is very important to remember that it is 20
percent more expensive to manufacture in this country than
among our major trading partners after you take out the cost of
labor.
And that is because of lots of different things--taxes,
regulation, energy, where for the first time in many, many
years we actually have a slight cost advantage. But this is
another significant amount of uncertainty that will not allow
capital to flow to those investments.
Senator Shaheen. Thank you.
Mr. Donohue. Senator, just one comment, and Jack Gerard may
want to mention. While there aren't many companies down on the
deep part of the shelf bringing up the rare earth materials,
many companies are preparing to do it. You just don't go out
there with a boat and throw something over the side. This is a
huge, complicated technical issue, and there is a lot of money
being invested by American companies and by consortiums of
companies to figure out exactly where it is, exactly how to do
it, and exactly how to do it in a safe and environmentally
sensitive way.
Senator Shaheen. Thank you.
The Chairman. Thank you, Senator Shaheen.
Senator Isakson, thanks for your patience.
Senator Isakson. Thank you, Mr. Chairman.
Thank you all for coming. It is good to have you here today
on what is a historic day.
I need to get a couple of clarifications. I wrote down some
things. Mr. Gerard, you made a statement, I think it was with
regard to Shell that invested $4 billion in the Arctic, and
they had sent two ships recently out from Washington to go
there to their first claim. Is that correct?
Mr. Gerard. Yes, they acquired the lease 5 years ago
through the process of permitting and getting the ability to go
out and actually start to drill a well. They have been in that
process 5 years. It has cost them $4 billion to this point, and
we hope they are going to get final approval to drill those
first wells this summer during this summer season. But that is
how long this process takes.
My simple point was these are long-term investments, and
they are very significant. So we have got to know that we have
got some rights intact before we commit to make those
investments.
Senator Isakson. Who is granting that permit?
Mr. Gerard. The U.S. Government.
Senator Isakson. The U.S. Government. So it is on our
current territorial waters?
Mr. Gerard. Yes, it is within the 200-mile Exclusive
Economic Zone.
Senator Isakson. The extended seabed.
Mr. Gerard. Yes.
Senator Isakson. Thank you very much.
Mr. Timmons, you made a statement, and I wrote part of it
down. I apologize again if this is wrong, but this is an
important issue for me.
I am talking about the deep seabed. You talked about
international bodies who have current authority to issue
permits or issue permission on deep seabed. Did I miss that?
Did I misunderstand you?
Mr. Timmons. I think so.
Senator Isakson. So, currently, if somebody was going to
the deep seabed to try and mine rare earth minerals there is no
current authority other than what authority might be under the
Convention?
Mr. Timmons. ISA. That is right. Under the Convention.
Senator Isakson. And Mr. Donohue, the last time I brought
this up, the chairman and I got into a 15-minute discussion. I
blew up the whole meeting. But this veto thing is an issue of
which there is a lot of conversation.
The chairman, in his response back to you, talked about the
Council. In terms of the Council, I understand the definition
of ``veto'' to be when a member objects creating an absence of
consensus. But I also understand that a simple majority of
those present and voting on the Council or a two-thirds vote of
the Assembly can override that absence of consensus. Am I right
or am I wrong?
Mr. Donohue. Senator, having watched the discussion here,
committed to get some more detail for your colleagues, and not
wanting to start another 15-minute harangue, I look forward to
answering that question in specific detail.
Senator Isakson. I appreciate that, and so does the
audience.
Mr. Donohue. Thank you.
Senator Isakson. Thank you very much.
Mr. McAdam, in your testimony, you refer to some nations
have attempted to encroach on the ability of U.S. operators to
effectively manage, deploy, or prepare maintenance and repairs
on their lines. In your testimony, you cite Malta's attempt to
assess a fee or a license. You talked about a Vietnam carrier
that had done 106 miles worth of damage to your cable.
Are those the two examples you are referring to in ``some
nations,'' or are there some other examples that come to mind?
Mr. McAdam. Yes, there are other examples, excuse me, for
sure, Senator. Just one is in India. Even though we don't cross
into their territory, they require the cable laying and
maintaining ships to put into port, and they assess a fee
against them. It is against the Convention, but they do that.
And so, we have to take legal action or we just have to pay the
fees.
So those are three examples.
Senator Isakson. So the Convention exempts you from having
to pay a licensing fee or some type of arbitrary fee to
maintain your cable or to lay your cable?
Mr. McAdam. Right. That is all laid out in a framework that
we can rely on versus having these unilateral actions that have
occurred in many places.
Senator Isakson. Does the Seabed Authority, the Assembly,
or the Council have to issue you a license to lay a cable?
Mr. McAdam. I would have to look at the specific details of
that, Senator. I don't know that off the top of my head.
Senator Isakson. Because I am sure we are laying cable now,
and we are not a party to the treaty.
Mr. McAdam. Right.
Senator Isakson. So my question would be if we are laying
cable now and we are not a party to the treaty, would being a
party to the treaty, from your testimony, only benefit us to
the extent that it would exempt us from paying fees to the
countries?
Mr. McAdam. No, it is not the fees. We are in and out of
these cables constantly, upgrading the technology, doing
maintenance on the cables. And I think the concern that we have
is the arbitrary nature of what happens today.
And if we can have greater certainty, we can predict our
costs better and we can make those investments. That is my main
point, Senator.
Senator Isakson. Thank you very much, Mr. Chairman. I have
got to join a conference call so I will have to yield back the
balance of my time.
The Chairman. Well, I appreciate that. Before you run out,
Senator Isakson, let me just say to you quickly because you
have raised an important question. The voting structure in the
Council was significantly rewritten as part of the 1994
implementing agreement. And it was rewritten in a way that
gives the United States a tremendous amount of influence, even
in matters where the Council does not act by consensus.
So we do, in fact, do have a veto over every item that
would be critical to us. Let me just be very specific quickly.
A Finance Committee was created. We insisted on this. It
has to make recommendations on all financial and budgetary
matters before the full Council can make its decisions. The
Finance Committee operates by a consensus, and there are
provisions making clear that the United States will be
permanently on that committee. So we have an ability to prevent
any counterbudgetary or fiscal matter from being contrary to
our interests.
Then the Council, second, is divided into several chambers.
For any other issue not decided by consensus, there is a rule
stating that any chamber by majority vote can veto a matter,
and the United States would be in the chamber with four
members. So there, we would have to get two other members to
agree with us, but we, again, could have a veto by virtue of
that.
And third, and this is very important, section 3, paragraph
4 of the annex states that the ISA Assembly cannot take a
decision on ``any matter for which the Council also has
competence or any administrative, budgetary, or financial
matter unless it does so based upon a recommendation of the
Council,'' where we have the veto.
So it can't change the recommendation of the Council. All
it can do is accept it or send the matter back. So, in effect,
because of our negotiations in 1994, which came out of
President Reagan's questions about this, we have, in fact,
negotiated a rather remarkable position for ourselves, which we
are not able to exercise.
And so, we will get this fully properly articulated in the
context of the record, but I wanted you to be aware of that.
Senator Isakson. Thank you, Mr. Chairman. Would you mind
providing me with that from which you are reading?
The Chairman. We will give the entire thing to you. We will
give you all the details.
Senator Isakson. Thank you, Mr. Chairman.
The Chairman. You got it.
Senator Shaheen. Mr. Chairman, can I ask that you share it
with all of the members of the committee?
The Chairman. Everybody on the committee will get it.
Senator? Thank you, Senator Casey, for your patience.
Senator Casey. Mr. Chairman, thank you, and thank you for
calling this hearing. This is a vitally important issue, and we
are spending time on a subject matter that I think we sometimes
don't do enough on in Washington. And I am grateful to be part
of this, and I am sorry I am late.
I'm running the risk of being redundant, but I would say
that redundancy is important in Washington. Repeating important
messages is important. So I might be plowing old ground.
But part of what I think hasn't been touched on with great
detail yet, Mr. McAdam, are some of the statements in your
testimony.
I am reading from the first page of your testimony labeled
page 2. And you say in the second to last paragraph, and I am
quoting, ``Aside from our land-based connections with Canada
and Mexico, more than 95 percent of U.S. international
traffic--voice, video, Internet, and data--travels over 38
submarine cables, each the diameter of a garden hose. Without
these cables, current satellite capacity could carry only 7
percent of the total U.S. international traffic.''
With that as a predicate, I would ask you, what can you
tell us about the importance of this treaty as it relates to
our 95 percent dependence on that transmission?
Mr. McAdam. Well, we invest a great deal, Senator, in
making these cables as redundant as we can. We use the term
``mesh networks.'' And if you think about it as a fence, you
can cut certain pieces of it, but there are other pieces of the
network that are redundant. And therefore, so we are the same
as the Government in some ways, I guess, to make sure that our
customers can rely on that service.
That helps us when we have things like storms or
earthquakes that sever the cables. But if a country takes some
sort of a unilateral action, such as we have seen, and doesn't,
frankly, support some of the repair operations that we had in
Vietnam--and I referred to that in my testimony where it took
many months to get those cables repaired--that really can
impact global commerce.
And so, the framework that we will have in place with the
treaty allows us to have an ongoing dialogue with the country.
We have a set of rules that we can rely on. If there are
disputes, we have arbitration we can go to. We can enlist the
help of the Federal Government where our local team can't make
the proper headway.
So it is a series of additional steps that give us greater
certainty and allow us to make these sorts of investments.
Senator Casey. Thank you.
I am going to go back to a question I know that Senator
Shaheen raised, and I am sure others did as well, on
manufacturing.
Mr. Timmons, I appreciate your testimony. I represent a
State that has had a long and very substantial legacy and
reputation for manufacturing. And we have had our challenges,
as you and I have talked about. But we have had a bit of a
resurgence, and I think we are, frankly, headed in the right
direction in terms of being able to create and maintain
manufacturing jobs.
If I were traveling across Pennsylvania this August when we
are going to be home, and someone grabbed me on the street and
said tell me in a few words why this treaty is important for
manufacturing, in terms of having a general strategy for
manufacturing and especially for maintaining those jobs, what
should I say to them in a few sentences? If you can help me
with that.
Mr. Timmons. Well, when you are looking at the issue of
rare earth materials, it is a vital component of all
manufacturing processes, particularly the chemical industry.
You have a large preponderance of folks involved in the
chemical industry. Without those rare earth materials,
manufacturing simply will not be able to compete and succeed in
the world marketplace.
Ten years ago, this country was able to produce 100 percent
of the rare earth materials that we used in manufacturing.
Today, we onshore produce none. And that is because of many
factors--regulatory matters, permitting, and other factors. The
bottom line is if we can't access rare earth materials on the
floor of the sea, we are going to be put at a significant
competitive disadvantage.
The manufacturing renaissance that you and I have spoken
about will cease to exist, and it will harm our economy and
cost jobs.
Senator Casey. I hope I can be that articulate with the
constituent.
Mr. Timmons. Well, I don't think that is a couple of
sentences, unfortunately. But I will work on that and get back
to you.
Mr. Donohue. But I would add one more sentence, and maybe
you were going to say it. If we do this right, we will drive
down the cost and increase the availability of fuels. And that
is going to have a large, large effect on manufacturing and on
your State's economy.
Senator Casey. Thank you, Mr. Donohue.
Mr. Gerard. Senator, I was just going to add something that
you already know. The answer, the other answer that is very
significant in your State is natural gas. As you know, the
price is down to the $2 to $3 range today; 83,000 new jobs in
your State as a result of that resurgence.
And I think as Jay said earlier, that is primarily what is
driving the manufacturing resurgence in the United States. We
often forget that those chemical plants and others are
primarily driven by the feedstock of natural gas, where they
convert natural gas to all the products we consume every day
and don't think about. So it is natural gas, low-cost,
affordable, reliable energy that is driving those other
benefits in our economy today.
Senator Casey. I will submit some more questions for the
record. I have got to run. But thank you so much for your
testimony.
Mr. Chairman, thank you.
The Chairman. Thank you very much.
Senator Shaheen, do you have any second round questions?
Senator Shaheen. I do have a couple, Mr. Chairman.
And I know that one of the issues that has been raised
about the treaty and I heard some of that debate today has been
what is the real authority of the International Seabed
Authority, and how would our participation play in that?
And I wonder if you all have looked at the Authority to the
extent that it is operated today and whether you have any views
about countries like Russia and China and what their actions
have been on the Authority in our absence and whether they are,
in fact, taking advantage of our inability to ratify the treaty
and participate on the Authority? What impact has it had to
have the United States not to be part of that body?
Mr. Gerard. I will try, Senator. First is, to us, that is
very significant. As Senator--Chairman Kerry mentioned earlier,
the 1994 changes, the amendments were very significant in
giving us additional power, a permanent seat on that Council in
the Seabed Authority.
The reason we say that is twofold. No. 1, any other
decisions that come out of there, we essentially have that veto
right. We interpret it as such, and so I am anxious to hear
others' legal opinions. We have gone to outside counsel, and we
view that we have that right and that authority within the
seabed Council.
But the other thing we shouldn't overlook, there has been
talk about royalties and other things that come from oil and
gas production beginning the 6th to the 12th year. Today, if
those are produced any other place in the world, those dollars
are going to go wherever that group that sits there are going
to allow them to go. If we have the seat, the permanent seat in
that Council, we have the ability to direct that to make sure
those very significant resources aren't given to unfriendly
nations around the world and aren't spent for purposes that are
not in the best interests of the United States.
So we think it is twofold. No. 1, we need to be there to
secure our own rights. But No. 2, by being there, having a seat
at the table, we can influence and have some direct leverage
over the other decisions the Seabed Authority is making.
Senator Shaheen. So, just to be clear, they are going to
assess those rates from our companies whether we are a member
of the treaty or not?
Mr. Gerard. Well, they apply only beyond 200 miles. My
point is that others who are participants who might be paying
into that fund today, those dollars go elsewhere without us
having any say until we accede and participate and become part
of the treaty process. Does that clarify it?
Senator Shaheen. Yes. Thank you.
The other thing that I wonder, and again, this may have
been covered to some extent. But I haven't heard much
discussion since I arrived about how we benefit in the Arctic.
I mean, you talked about that a little bit, Mr. Gerard, in
terms of our ability to have much more of an opportunity to
access the minerals that may and the resources that may exist
under the Arctic.
But can you also talk about how what is happening there
with other countries, and are we lagging behind Russia and
those other countries who may be also interested in the
resources of the Arctic?
Mr. Gerard. Well, if you look at the way the Authority is
set up and the commission on the limitation of the Continental
Shelf, which determines how far those boundaries may go based
on the definition of the Continental Shelf, those nations that
are active in the Arctic or seek to be active--Russia, Denmark,
Norway, Canada, and others--are all participants. And many of
them have already filed or laid claim to those lands or those
potential lands in the outer Continental Shelf. We stand here
watching that happen.
We have a very, very significant interest in the Arctic.
And as I mentioned earlier, Shell hopefully will start that
again today. It is estimated that one-quarter of the world's
oil and gas resources are under the Arctic. Why we would sit on
the sidelines and watch the rest of the world develop that
resource to us is somewhat mystifying, not to mention our own
resources that we have within our own 200-mile Exclusive
Economic Zone.
We are the only industrialized nation in the world that
does not take full advantage of our outer Continental Shelf. We
think it would be a big miss, a missed opportunity to sit today
and watch and 30 years from now wonder why we missed out when
those decisions were made in the Arctic, which is so important
to global advancement and economic development.
Senator Shaheen. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Shaheen. Those
were good questions and I think important part of the record. I
appreciate it.
Let me just close out. Senator Lugar does not have
additional questions. I just have one or two quickly that I
just want to get the record complete here.
We will leave the record open, incidentally, for a week in
case there are additional questions to submit in writing.
Mr. Timmons, at a hearing before the committee a couple of
weeks ago, we heard from one of the think tank folks out here
from the Heritage Foundation, analyst who said that U.S.
companies are free to exploit the deep seabed right now, and
they have all the legal certainty necessary to support
investments to drill in the deep seabed.
And the analogy drawn by that witness was just like
fishing. You know, you go out. Nobody owns the fish. It is
every person for themselves.
In light of the fact that you have got 161 nations and the
European Union that are all parties to the Convention, it seems
odd to sort of suggest an every person for themselves approach
to this. And I wonder if you just--you have addressed it
somewhat here, and you have talked about the certainty. I just
want to be crystal clear whether that is an alternative. Is
that viable?
Mr. Timmons. Well, Senator, Mr. Chairman, I would say it is
an alternative, but I don't think it is viable. We could
proceed as a nation--I think it is very important to recognize
that the world today is extraordinarily different than it was
40 years ago. We are, again, a global economy. We have
multinational companies that have the means to develop these
resources, but they are simply unwilling to do so because of
the risk that exists without ratification of this treaty.
If that theory were, in fact, accurate, you would see the
development of these resources today, and it is simply not
happening.
The Chairman. So I want to ask everybody this. Therefore,
is it clear, are you saying here definitively today that the
people you represent and the interests that you are here to
advance will not be served by and that no one will invest, in
fact, billions of dollars if you were to pursue that theory of
every person for themselves?
Mr. Timmons. I think our country would not be served if the
treaty is not ratified because companies simply will not invest
or take the risks if they don't have the certainty provided in
this treaty. That means from a manufacturing perspective that
manufacturing suffers, which means the economy suffers, which
means jobs suffer.
And so, it is in the long-term economic and national
security interests of our country, in the view of
manufacturers, that this treaty be ratified.
The Chairman. Mr. Donohue.
Mr. Donohue. Senator, if we don't join this treaty, we may
find people doing that without the protection, but they may be
the Russians, they may be the Chinese, and they may be on our
extended outer Continental Shelf. Obviously, the Arctic is more
available than it was before because of thinning of the ice
while it is thickening on the South Pole, you know, all this
stuff going on.
But people are making plans and claims to establish
themselves in the Arctic. And as Jack indicated, we are on the
outside looking in, with all sorts of power. But as you know in
your job, most of the most powerful things we can do, we can't
do or we shouldn't do.
And I think the benefits of making this fundamental
adjustment, taking a seat at the table with a lot of strength
to protect our interests at least gives us a raison d'etre for
whatever steps we have to take to represent and to help this
country. So the answer is, I don't think you are going to see a
lot of American firms--you can get a permission from the
Federal Government--this is another point--to access an area,
but then they won't give you a permit to drill it.
And we have all of those problems, but the bottom line, we
have been arguing this thing for so long. And when the old
arguments run out, then we have some new arguments. And I
respect the people that have that view, and I suppose you could
find some of my members that have that view, but not very many
of them. And we have got tens and tens of thousands of them
that think it is about time to get on with it.
The Chairman. Final--yes?
Mr. Gerard. Senator, I would just add there is a lot of
different opinions about this, but I would suggest you look
closely at those opinions where it really matters. You cited
one earlier, the chairman of Shell, Marvin Odum. Rex Tillerson
has sent you a letter.
These are the individuals that are going to make those
decisions, and they have been very clear and unequivocal saying
they will not make those decisions. The risk is too high. There
is too much at stake. They won't be able to convince boards and
shareholders that that is the best use and the safest use of
their money and their resource.
So I would hope we would look at those that have experience
that are on the front line making those decisions and perhaps
in fairness give that opinion a little more weight than others.
Mr. Donohue. And at the same time, to think about what the
Joint Chiefs of Staff and our military leaders who are
challenged to protect us in many ways, including in those
areas, and you know they are not people easily convinced of
joining committees.
The Chairman. Well, final question, last question, I
promise. It seems to me, listening to your testimony, that if
companies aren't going to invest, that if we are looking at a
reduction of the availability of rare earth minerals and we
could be mining rare earth minerals, sounds to me like that
takes a lot of people to produce the equipment to be out there
doing it. That if we are looking at increased ability to find
more energy sources for the United States, it takes people to
go out and do that. And if you are talking about providing
cheaper energy for the United States over the long term, that
affects our economy. Bottom line to everything here, it seems
to me, is jobs.
This seems to me to be screaming at us that there is this
availability of jobs for Americans out there if we were to do
this, more than anything else. Would each of you comment? I
mean, is that really what is fundamentally at stake here?
Mr. Donohue.
Mr. Donohue. The next great industry in this country is
energy of every type, and that is going to create millions of
jobs over time. We should not make this more difficult for us
to access rare earth minerals, energy, and whatever else we
might find while 161 other countries are out making their plans
to do so. This is in the enlightened self-interest of this
country and in the interest of our national security.
And I respectfully say to those that disagree, and by the
way, we have tried to learn something from them, that the
positive part of this treaty so overwhelms and outweighs those
objections, which I respect, that the plurality, as they would
say up here, is highly significant.
The Chairman. Mr. Gerard.
Mr. Gerard. Senator, I was just going to add to that. Tom
mentioned something that is very significant today. The energy
opportunities of the United States today are of game-changing
proportions. To put it in simple context, an economist just a
few months ago said that within the next decade if the U.S.
policy is done well, we will become the new Middle East for
energy production.
That is how serious this discussion is if we, as a nation,
are serious about producing our own energy. So I think there
are two dimensions to this answer. The first one is we need to
think long term. We have to look at things like the Law of the
Sea and say how do we secure our energy future, not only the
next 10 to 20 years, but the next 50 to 100 years?
Oil and natural gas will continue to be the foundation
energy building block for many decades yet to come, even as we
strive to move to alternative renewable forms and other less
emitting forms of energy.
But the second dimension we shouldn't overlook, and it goes
back to Senator Corker's point earlier. We have got to get our
act together as a country in our own permitting processes, in
our own political will, and ability to produce our own energy.
We can secure the border. We can secure the long-term future
through the Law of the Sea, but we have got to have processes
within the United States where we say energy is a priority.
As Senator Casey pointed out earlier, in the last 18
months, we have created 83,000 jobs in the State of
Pennsylvania producing clean-burning natural gas that saved the
consumers of Pennsylvania close to a quarter of a billion
dollars in 1 year because that supply drove the price of
natural gas down to where it is today.
Now it can't stay there forever, but we have the same
potential with oil. North Dakota, the No. 2 producer.
Unemployment rate,
3 percent. Median wage in North Dakota in oil production,
$90,000 a year. Median wage for everybody else, $42,000 a year.
We talk about jobs. We talk about energy security and
revenue to the Government. We ought to think about energy
particularly as we make this decision because it will be
altering for this Nation for many years yet to come.
The Chairman. Mr. McAdam, do you want to add? You don't
have to, but if you want to add anything.
Mr. McAdam. No, I think the only thing I would add is that
while we aren't out mining the seabed for rare earth minerals,
we are putting these cables across that provide the
infrastructure so that these companies can make the investments
and run their businesses effectively. And I think we should do
everything we can to eliminate the risks associated with this
vital network.
The Chairman. Well, I want to thank all of you. I think
your testimony has been extraordinarily significant, very, very
thought out and thorough and, I think, important to this
process. So we are very, very grateful to all of you for taking
time here today.
We will, as I said, leave the record open for a week, and
we look forward to continuing the discussion with you over the
course of the next months. Appreciate it.
We stand adjourned. Thank you.
[Whereupon, at 11:32 a.m., the hearing was adjourned.]
----------

Additional Material Submitted for the Record

Responses of Thomas J. Donohue to Questions Submitted
by Senator James E. Risch

Question. If the United States accedes to the United Nations
Convention on the Law of the Sea (UNCLOS), U.S. companies seeking to
engage in exploratory or development activity in the deep seabed will
be required to obtain permission from the International Seabed
Authority. The 1994 Agreement relating to the Implementation of Part XI
of UNCLOS changed the obligations of States Parties and their
contractors in regard to the transfer of technology relating to the
deep seabed. The relevant section of the 1994Agreement reads:

SECTION 5. TRANSFER OF TECHNOLOGY
1. In addition to the provisions of article 144 of the
Convention, transfer of technology for the purposes of Part XI
shall be governed by the following principles:
(a) The Enterprise, and developing States wishing to obtain
deep seabed mining technology, shall seek to obtain such
technology on fair and reasonable commercial terms and
conditions on the open market, or through joint-venture
arrangements;
(b) If the Enterprise or developing States are unable to
obtain deep seabed mining technology, the Authority may request
all or any of the contractors and their respective sponsoring
State or States to cooperate with it in facilitating the
acquisition of deep seabed mining technology by the Enterprise
or its joint venture, or by a developing State or States
seeking to acquire such technology on fair and reasonable
commercial terms and conditions, consistent with the effective
protection of intellectual property rights. States Parties
undertake to cooperate fully and effectively with the Authority
for this purpose and to ensure that contractors sponsored by
them also cooperate fully with the Authority;
(c) As a general rule, States Parties shall promote
international technical and scientific cooperation with regard
to activities in the Area either between the parties concerned
or by developing training, technical assistance and scientific
cooperation programmes in marine science and technology and the
protection and preservation of the marine environment.

Does Section 5 of the Agreement give you and your members
full confidence that, should they engage in exploratory or
development activity in the deep seabed, they will not be
compelled to share proprietary technology?
How does the Chamber interpret the obligation to ``cooperate
fully and effectively with the Authority'' for the purpose of
sharing deep seabed mining technology with the Enterprise or
developing States?
What types of deep seabed technology is the Chamber and its
members currently willing and able to transfer or otherwise
share with the Enterprise or with developing States?

Answer. In his Oceans Policy Statement dated January 29, 1982,
President Reagan objected to the provision in the draft Law of the Sea
Convention that required transfer of technology by seabed mining
companies to the International Seabed Authority (ISA) and to developing
countries. President Reagan's concern was addressed in the 1994
Agreement. Section 5(2) of the Annex to the 1994 Agreement provides
that the technology transfer provisions of the original 1982 Convention
``shall not apply.''
Instead, Section 5 of the 1994 Agreement provides that the ISA may
``request'' that a deep seabed mining contractor and its sponsoring
State to ``cooperate in facilitating the acquisition of deep seabed
mining technology'' by the Enterprise or by a developing State. The
U.S. Chamber is not aware of any requests that have been made to
potential U.S. seabed mining contractors or to the United States to
acquire seabed technology.
Unlike the original 1982 Convention, Section 5 of the 1994
Agreement does not require a U.S. contractor or the United States to
transfer any proprietary technology. Moreover, contractors and their
sponsoring states are required only to facilitate the acquisition of
mining technology ``on fair and reasonable commercial terms and
conditions'' and ``consistent with the effective protection of
intellectual property rights.'' Thus, if the ISA or the developing
State requesting the technology is unwilling to acquire the technology
on fair and reasonable commercial terms, or the contractor and
sponsoring State believe that the transfer of the technology would not
protect the intellectual property rights of the contractor, then there
is no obligation whatsoever to facilitate the acquisition. These
caveats give U.S. seabed mining contractors and the United States broad
discretion to decline to facilitate inappropriate requests for seabed
mining equipment.
Of course, in many cases U.S. companies may affirmatively want to
sell deep seabed mining equipment or technology to other countries or
their contractors, provided the terms are commercially reasonable and
the U.S. companies' intellectual property rights are protected. U.S.
equipment manufacturers will benefit economically by export sales of
seabed mining equipment to other countries, just as U.S. companies
already sell billions of dollars of on-land mining equipment,
construction equipment, and other heavy machinery into other countries.

Question. In your written testimony you stated that the United
States must join UNCLOS to ensure that U.S. companies such as Lockheed
Martin may engage in deep seabed mining. You further stated that
``other U.S. companies'' are ``poised to expand their operations and
create new jobs'' in the deep seabed mining industry, should the United
States accede to the Convention.

Please identify any and all members of the Chamber or any
other U.S. company that, to your knowledge or in your opinion,
are ``poised'' to engage in deep seabed mining in the event
that the United States accedes to UNCLOS.
Please identify all members of the Chamber or any other U.S.
company that comprise the ``nascent deep seabed mining
industry'' mentioned in your written testimony.
Should the United States accede to UNCLOS before the end of
the year, how long will it be before any such member(s) or
companies will take steps to explore the deep seabed and/or
engage in any form of deep seabed development activity through
the Authority?

Besides the fact that the United States is not a party to UNCLOS,
what legal, financial, commercial, or other factors, if any, are
currently preventing U.S. companies from engaging in the development of
the deep seabed?

Answer. In my written testimony, I stated, with respect to deep
seabed mining, that ``Lockheed and potentially other U.S. companies
[are] poised to expand their operations and create new jobs.''
(Emphasis added.) In other words, U.S. companies other than Lockheed
may be interested in engaging directly in deep seabed mining, now that
the necessary technology is more readily available and the market for
deep seabed minerals and rare earths is more favorable, provided they
would be able to receive a license to engage in seabed mining.
Moreover, Lockheed or other potential mining contractors are not
the only U.S. companies that would be able to create jobs and benefit
economically from the startup of a U.S. deep seabed mining industry.
Numerous other U.S. companies in potentially dozens of States--such as
engineering companies, consulting firms, exploration companies,
exploration and mining equipment manufacturers, and mineral processing
companies--would be able to assist or participate in aspects of the
emerging deep seabed mining industry, with the potential addition of
hundreds or thousands of jobs and tax dollars to the U.S. economy. By
refusing to approve the Convention, the Senate is blocking the ability
not only of Lockheed but also of a diverse group of U.S. companies in
many States that could become part of a lucrative U.S.-based deep
seabed industry.
The primary obstacle to the commencement of deep seabed mining by
Lockheed and related U.S. companies is that the United States has not
joined the Law of the Sea Convention. Lockheed has made clear that it
is unwilling to invest the billions of dollars necessary to engage in
deep seabed mining unless it has clear legal title to specific claim
areas in international waters. If the United States joins the
Convention this year, Lockheed or another U.S. mining contractor could
apply for and receive a license at the next annual meeting of the ISA
in July 2013.

Question. U.S. persons and companies, including Lockheed Martin,
are currently permitted to engage in deep seabed exploration and mining
pursuant to the Deep Seabed Hard Mineral Resources Act (DSHMRA; 30
U.S.C. Sec. Sec. 1441 et seq.), which states in part that ``it is the
legal opinion of the United States that exploration for and commercial
recovery of hard mineral resources of the deep seabed are freedoms of
the high seas.''

Please identify any and all legal barriers that would
prevent U.S. persons and companies from seeking licenses for
exploration and permits for commercial recovery of deep seabed
minerals pursuant to DSHMRA.
Please explain why U.S. persons and companies are unable to
engage in deep seabed mining pursuant to DSHMRA and its
regulatory regime and why U.S. accession to UNCLOS is legally
necessary to do so.

Regardless of U.S. accession to UNCLOS, do current U.S. laws,
including DSHMRA, provide legitimate and sufficient legal authority and
protections for U.S. companies to engage in exploratory or development
activity in the deep seabed?

Answer. The Deep Seabed Hard Mineral Resources Act (DSHMRA) was not
intended to serve as a unilateral U.S. substitute for the international
legal authority provided by the Law of the Sea Convention. Rather, the
DSHMRA was enacted by Congress ``to establish, pending the ratification
by, and entering into force with respect to, the United States of such
a treaty, an interim program to regulate the exploration for and
commercial recovery of hard mineral resources of the deep seabed by
United States citizens.'' (Emphasis added.)
Indeed, section 1402 of the DSHMRA specifically states that the
United States ``does not thereby assert sovereignty or sovereign or
exclusive rights or jurisdiction over, or the ownership of, any areas
or resources in the deep seabed.''
Accordingly, although the DSHMRA provides a U.S. domestic law
framework for U.S. companies to seek licenses to engage in exploration
and commercial recovery of deep seabed minerals, it does not provide
the clear international legal title that U.S. companies--especially
public companies that owe special obligations to public investors--
require before investing billions of dollars in exploration and
resource extraction.
Lockheed Martin has applied under the DSHMRA to the National
Oceanic and Atmospheric Administration and has received an extension of
its licenses to engage in deep seabed exploration. Lockheed has
informed NOAA that it is prepared to engage in preparatory activities
on land, but that it would not make the ``substantial investment in at-
sea exploration'' until it has the ``adequate assurance of security of
tenure at the international level'' that would be provided by U.S.
ratification of the Law of the Sea Convention. See 77 Fed. Reg. 12445,
12446 (February 29, 2012).

Question. It is a fact that companies in the United States,
including Lockheed Martin, may enter a joint venture or other
arrangement with countries that are already party to UNCLOS for the
purpose of engaging in deep seabed mining under the Convention. Indeed,
there is already precedent for such an arrangement between a Canadian
company (Nautilus Minerals Inc.) and the Kingdom of Tonga, which were
awarded a 15-year contract by the Authority in January of this year
under the name Tonga Offshore Mining Limited.

Should the United States not accede to UNCLOS, does anything
prevent U.S. companies that desire to engage in development
activity in the deep seabed from partnering with a States Party
(or a company therefrom) that can sponsor the endeavor before
the International Seabed Authority?
In fact, with almost all contemporary oil, gas, and other
natural resource extraction and development enterprises
horizontally integrated, would not a partnership be expected
and even desired?

Answer. U.S. companies may not be sponsored for licenses to engage
in deep seabed mining under the Law of the Sea Convention by countries
other than the United States. Article 4 of Annex III to the Convention
provides that ``Each applicant [for a license] shall be sponsored by
the State Party of which it is a national . . .'' For applications by a
partnership or consortium, each company must be sponsored by the
country of its nationality.
A U.S. company could, of course, establish a foreign subsidiary
that could be sponsored by another country for a license for the sole
purpose of engaging in seabed mining. But this forced approach would
have numerous commercial and economic disadvantages both for the
company involved and for the United States, which would lose license
and tax revenue and the jobs benefits.
Equally important, U.S. companies, while making substantial
investments in deep seabed exploration or mining, would lose the
benefit of U.S.-input into the development of the rules and regulations
for the seabed mining industry. In contrast, if the United States joins
the Convention, the United States will have a permanent seat on the
Council of the ISA, which would give the United States a permanent and
significant voice in the development of the rules and regulations for
seabed mining and the institutional management of the ISA.
The ISA has now approved 17 applications by Parties to the
Convention for contractors to engage in exploration for deep seabed
minerals. At its most recent annual meeting, the ISA approved five
licenses for seabed exploration of sulphides and polymetallic nodules,
including applications by Korea, France, the United Kingdom, Kiribati,
and Belgium. Clearly, the entities involved in these applications have
concluded that there is significant mineral wealth on the deep seabed.
The United States, however, had no voice in reviewing these
applications and will have no voice in the development of the rules and
regulations that will regulate the international seabed mining
industry, unless the United States becomes party to the Convention.
U.S. companies are losing significant commercial opportunities, and the
potential to create thousands of new jobs, because the United States is
not party to the Convention.
______

Responses of Lowell C. McAdam to Questions Submitted
by Senator Jim DeMint

Question. Verizon is currently fighting the FCC in court regarding
two recently imposed regulations--net neutrality (``open Internet
order'') and data roaming mandates. The FCC is a 5-member tribunal of
sorts that is a creature of the U.S. Congress and bounded in theory by
the laws of this country. They often overstep these laws, however, and
appeals to the U.S. judiciary are entered by affected private
companies. One wonders why a company like Verizon, which has
consistently been affected by and fought extra-legal FCC decisions,
would work for the creation of a new tribunal--particularly one that
operates under the far less transparent and consistent authority of
international law.
Looking at the first case involving data roaming, the rules, which
the FCC approved on a party-line 3-2 vote in April 2011, will require
mobile broadband providers to provide data roaming on ``commercially
reasonable'' terms and conditions. In essence this mandate requires
that a company which has built its own network must offer that network
to another company that, for whatever reason, has chosen not to build a
network in the same geographic area. Here is Verizon's statement at the
time of the order: ``By forcing carriers that have invested in wireless
infrastructure to make those networks available to competitors that
avoid this investment, at a price ultimately determined by the FCC,
today's order discourages network investment in less profitable
areas,'' Tom Tauke, Verizon Communications' executive vice president of
public affairs, policy and communications, said in a statement. ``That
is directly contrary to the interests of rural America and the
development of facilities-based competition and potential job creation.
Therefore, it is a defeat for both consumers and the innovation
fostered by true competition.''

What do you believe will happen when dealing with an
international body, with even less transparency or
accountability to American companies and taxpayers?
Do you believe that an international body with little to no
accountability to the United States or industry will legislate
in a more satisfactory way than the FCC?

Answer. We believe that the Convention would be helpful in dealing
with the threat of expansion by coastal States. If the United States
were a party to the treaty, it could act on behalf of U.S. companies to
protect U.S. interests in undersea cables. Without this protection,
U.S. companies are forced to seek out the protection of foreign
governments to help safeguard U.S. investments. Thus, ratification of
the Convention will help U.S. companies better contend with disruptions
or threats to undersea cable service by giving them an avenue to work
with the U.S. Government in a way that currently is not available. Once
the United States is a party to the Convention, Verizon and other U.S.
telecommunications companies can work with the appropriate U.S.
agencies to enforce, when necessary, the freedoms to lay and repair
cables on the Continental Shelf and the EEZ--saving millions of dollars
over the life of a cable system, improving the reliability of our
critical infrastructure, and putting U.S. companies on a level playing
field for operating international cable systems.

Question. Second, regarding Net Neutrality, there was another 3-2
decision by the FCC in December 2010. The ``open Internet'' rules
require wireline providers to be transparent in how they manage and
operate their networks; prohibit the blocking of traffic on the
Internet; and, prohibit wireline broadband providers from unreasonably
discriminating against traffic on their network. Verizon accuses the
FCC of overstepping its authority. And the company has said that
because the FCC is trying to impose regulations it doesn't have
authority to impose, it's creating uncertainty in the market that will
ultimately harm innovation. Verizon's quote upon filing their legal
challenge: ``Verizon is fully committed to an open Internet,'' Michael
E. Glover, Verizon senior vice president and deputy general counsel,
said in a statement. ``We are deeply concerned by the FCC's assertion
of broad authority to impose potentially sweeping and unneeded
regulations on broadband networks and services and on the Internet
itself.''

How long do you think it will be before you will have to buy
a lease or pay fees to the international body to lay cable?
Are you prepared to pay for the additional fees, such as an
environmental impact study when you lay cable on the ocean
floor?

Answer. The Convention gives cable owners the explicit legal
protection for the freedom to lay and maintain cables in international
waters. If the United States ratifies the treaty, it will have the
ability to work with U.S. companies and our allies to help protect U.S.
interests in underseas cables, including in connection with assessing,
and if appropriate, challenging, any fees or levies assessed.