Payne (1978)

Mining the Deep Seabed: The Political, Economic and Legal Struggle
Author(s): Richard J. Payne

Source: The Journal of Politics, Vol. 40, No. 4 (Nov., 1978), pp. 933-955
Published by: University of Chicago Press on behalf of the Southern Political Science
Association
Stable URL: http://www.jstor.org/stable/2129903
Accessed: 22-11-2015 15:20 UTC
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/
info/about/policies/terms.jsp
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content
in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.
For more information about JSTOR, please contact support@jstor.org.
University of Chicago Press and Southern Political Science Association are collaborating with JSTOR to digitize, preserve
and extend access to The Journal of Politics.
http://www.jstor.org
This content downloaded from 130.64.11.153 on Sun, 22 Nov 2015 15:20:53 UTC
All use subject to JSTOR Terms and Conditions
Mining the Deep
Seabed:
The Political,
Economicand
Legal Struggle
RICHARDJ. PAYNE
ONE OF THE MAJOR developments of our time is the ability of

corporationsto exploit mineral resourcesin almost any part of the
ocean. This development is challenging fundamentalconcepts of
internationallaw and is influencingthe formulationof new rules in
relation to the exploitation and distribution of benefits derived
from seabed resources. Of majorinterest is the mining of manga-
nese nodules. The latter, composed of nickel, copper, cobalt, iron
ore, and other minerals are potato-sized, irregularin shape, and
brownish black in color and are found on the ocean floor beyond
the 200 mile economic zone and therefore generally beyond the
legal jurisdiction of any state. Future exploitation of them has
touched off an extremely significantdebate in the United Nations
and elsewhere.
This article examines how a combination of intricate political-
* I would like to thank all of those who have assisted me, especially Allan
Beesley, formerly Legal Advisor to Canada; Mary A. Firestone of the National
Oceanographic Data Center; Lauriston King, Special Assistant for Marine
Science Affairs at the National Science Foundation; Professor Nyhart of MIT;
Roger Cochetti, Director of the U.N.'s Study on Hard Ocean Minerals. I am
especially grateful to Professors Brian Weinstein (Howard University), Ronald
R. Pope, Ann Elder, and Hibbert Roberts (Illinois State University), and Dave
Atkinson (University of Missouri) for their careful reading of the manuscript.
934 THE JOURNAL OF POLITICS, VOL. 40, 1978
economic factors are frustrating attempts by the U.N. Third Con-

ference on the Law of the Sea (which has held five separate ses-
sions) to reach agreement on a new law of the seas. Figures used
here demonstrate the economic dependence of countries on the con-
stituent metals of manganese nodules during the incipient stages of
the discussion concerning them in the United Nations. There is no
evidence indicating any major recent alterations in dependence on
them.
The issue goes beyond the immediate problem of mining manga-
nese nodules. Essentially, what we are dealing with is a struggle
over control of the deep seabed which is obviously a continuation
of the political and economic confrontation on land between MNCs
and producers of copper, cobalt, nickel, etc., between rich countries
of the North and poor countries of the South in relation to the es-
tablishment of a new "international economic order" and, finally, a
struggle over the control of the operation and direction of inter-
national organizations, such as the United Nations.
MNCs interested in the exploitation of manganese nodules are at
the heart of the present struggle. These corporations, which oper-
ate in several countries simultaneously, have the ability to influence
not only the rate of production but also the price of minerals on the
international market and therefore economic conditions in develop-
ing countries and, to some extent, their internal and international
politics. In an attempt to control MNCs, developing countries have
resorted to nationalization and expropriation of their property, and
the establishment of international commodity cartels. The latter
strategy is becoming increasingly popular, in part because of the
success enjoyed by the now widely known oil cartel OPEC (the
Organization of Petroleum Exporting Countries). This group's
success is directly related to its ownership and control of a large
share of the world's petroleum.
Producers of the constituent metals of manganese nodules would
like to be in a similar position. They want greater control over the
production and price of land-based minerals in order to realize
greater economic benefits. The mining of manganese nodules is
likely to frustrate these attempts by increasing the supply and
sources available to MNCs, simultaneously contributing to their
economic and political leverage. Thus the conflict between com-
panies interested in manganese nodules and land-based producers.
But this disharmony is part of the general controversy between rich
and poor countries.
MINING THE DEEP SEABED 935
Developing Third World countries are consistent in their demands

for the establishment of a new international economic order-for a
transfer of wealth from the rich industrial countries to the poor na-
tions of Africa, Asia and Latin America. One manner in which they
intend to accomplish this is through charging higher prices for their
national resources to consumers in the rich countries. Consumers,
however, are reluctant to pay what they consider exorbitant prices
for minerals from Third World countries.
Poor nations appear to have two strategies for transferring
wealth as far as manganese nodules are concerned. First, Third
World producers of these minerals would like to prevent the ex-
ploitation of seabed minerals in order to keep supplies limited and
prices high. This is quite understandable when one considers how
essential mineral exports are to their national economies. Exploita-
tion of seabed sources is likely to have more of a negative than
positive impact in so far as these countries are concerned. Natu-
rally, consumers, on the other hand, desire larger supplies at lower
prices. Second, developing countries which are non-producers of
nickel, copper, cobalt, etc., would like to control the distribution of
revenues obtained from manganese nodules. This money could be
utilized to help finance their economic development. Most de-
veloped countries are not opposed to allocating the major portion of
these revenues to the Third World states.
Finally, there is the question of controlling the international legal
and administrative machinery which many countries would like to
govern or oversee the production of the nodules. Political and
economic considerations are quite evident behind the legal discus-
sions. As will be discussed in greater detail later, developing coun-
tries are endeavoring to have a substantial amount of influence on
the policies and administration of seabed mining. On the other
hand, companies and most industrialized countries favor minimal
regulation by a smaller and less powerful international bureaucracy,
both from the viewpoint of greater efficiency and less political and
economic manipulation by Third World countries. This is an in-
tegral part of the North-South (or the rich-poor) conflict. We will
now examine the current problems of mining manganese nodules.
NODULES
MANGANESE
Manganese nodules were first discovered approximately 103 years
ago during the deepsea expedition of the British ship, HMS Chal-
lenger. As far as the British were concerned, these black "rocks"

were not very important.' Only recently have the nodules been
recognized as a major economical source of industrial metals, partic-
ularly copper, nickel, cobalt, and manganese. This realization
occurred through a study of nodules dredged from the Pacific that
was conducted in 1957-58 by the Institute of Marine Resources of
the University of California. That study indicated that manganese
nodules could be economically exploited. With rising prices for
raw materials, political uncertainties and nationalizations, they be-
gan to attract the attention of mineral companies.
Manganese nodules are found scattered on the ocean floor in al-
most all depths of water-as shallow as six feet in some Scottish
lochs and as deep as 20,000 feet in the Pacific. However, only those
nodules situated below 10,000 feet of water are considered to be of
sufficiently high quality to be mined economically.2
Deposits of these nodules are located in the Pacific, Atlantic, and
Indian Oceans. The Pacific floor, from Central America to Canada
and west almost to the Philippines, is literally covered with them.
Not only does the Pacific have more nodules than the Indian and
Atlantic Oceans combined, it also has the highest grade nodules.3
According to John Mero, a conservative estimate indicates that there
are several hundred billion tons of mineable nodules in the high-
grade areas of the Pacific Ocean.4 The Atlantic Ocean has scattered
concentrations of nodules. These are found off North Carolina and
Florida in the Blake Plateau Province area. There are other sub-
stantial deposits east of Cuba and off Brazil and Argentina. Other
sites of significant deposits of manganese nodules are the Cape Basic
Province and Agulas Plateau Province off the southern tip of Africa,
the Madagascar Basic Province (off Madagascar), and the Crozet
Basic Province in the Indian Ocean. It is estimated that there is a
1 David R. Horn, et al., "Distribution of Ferromanganese Deposits in the

World Ocean," in David R. Horn, ed., FerromanganeseDeposits on the Ocean
Floor (Washington, D.C.: National Science Foundation, 1972), 9; Bernard
G. Stechler and John T. Nicholas, "Recoveryof Deep Ocean Nodules: A New
Approach,"in Horn, FerromanganeseDeposits, 142.
2 John L. Mero, "Potential Economic Value of Ocean-Floor Manganese
Deposits," in Horn, Ferromanganese Deposits, 192, 195. See also John L.
Mero, The Mineral Resources of the Sea (New York: Elsevier, 1965).
3 Mero, "Economic Value of Nodule Deposits," in Horn, Ferromanganese
Deposits, 195.
4 Ibid.
total of approximately 1.5 trillion tons of nodules on all the ocean

floors, and that they are accumulating at an annual rate of 10 mil-
lion tons.5 In essence, this amounts to a virtually inexhaustible
supply of very important minerals.
Even assuming that only 10% of the nodule deposits prove economic to mine,
it has been shown that there are . . . sufficient supplies of many metals in
these ocean floor deposits to last for thousands of years at our present rates of
consumption. Also, assuming a world population of 20 billion people consuming
metals at a rate equal to that of the U.S. at the present time, the reserves of
most of the industrially important metals would still be measured in terms of
thousands of years.6
In light of these estimates, it is not surprising that nation-states,

especially producers of the constituent metals of manganese nodules,
desire laws that would govern the activities of companies engaged
in developing them.
Due to the highly sophisticated nature of nodule mining and proc-
essing, and the high cost (estimated at $250 million) of establish-
ing a profitable mine,7 there are relatively few companies preparing
to mine manganese nodules. Indeed, the mining companies are
forming consortiums rather than working individually. Mining con-
sortiums include: (1) Kennecott Copper, Noranda Mines, Rio-Tinto
Zinc and Gold Fields, and Mitsubishi Corporation,8 which has
allocated at least $50 million to develop the necessary mining ships,
dredging devices, and other equipment; (2) Tenneco, which formed
Deepsea Ventures in 1968 solely to explore and exploit manganese
nodules, has linked up with Nichimen, C. Itoh, and Kanematsu-
Gosho, Union Miniere, and United States Steel; (3) Ocean Re-
sources, Inc., and several other companies; (4) International Nickel;
(5) Societe le Nickel, which is negotiating with Pechiney Ugine
Kuhlmann to form an ocean mining consortium; (6) the Sumitomo-
DOMA (Deep Ocean Minerals Association) group; and (7) Metal-
lgesellschaft. All of these companies have made substantial in-
vestments on exploration activities and technology.
5 Ibid.
6 Stechler and Nicholas, "Recovery of Deep Ocean Nodules," in Horn, Fer-
romanganese Deposits, 142.
7 "Tapping the Lode on the Ocean Floor," Business Week (October 19,
1974), 122.
8 Ibid., also United Nations, Economic Implications of Seabed Mining in the
International Area: Report to the Secretary-GeneralA/Conf. 62/37 (February

18, 1975), 4.
EFFECTS OF MINING MANGANESE NODULES
Today we are witnessing a trend toward commodity cartels

among developing countries which produce: oil, the Organization
of Petroleum Exporting Countries (OPEC); bauxite, the Inter-
national Bauxite Association (IBA); copper, the Intergovernmental
Council for Copper Exporting Countries (CIPEC); and the Inter-
national Tin Council which is composed of Malaysia, Bolivia, Indo-
nesia, Nigeria, Zaire, and Australia. CIPEC's members include
Chile, Peru, Zaire and Zambia. In 1973, CIPEC represented ap-
proximately forty per cent of the world's production of copper and
about eighty per cent of world copper exports. Encouraged by the
success of OPEC in quadrupling the price of oil sold to consuming
nations, most producers of raw materials are doing whatever they
can to obtain more money for their resources. Their more or less
monopoly power over certain minerals gives them the ability to
charge what many feel to be excessive and arbitrary prices to con-
suming nations and companies alike.
Another problem as far as consumers are concerned, is that of
concerted action by mineral-exporting countries. Such action by
copper, tin, nickel, and bauxite producers would sharply reduce the
risk to each country that one metal would be substituted for an-
other.9 In this situation, cheaper aluminum would not be readily
substituted for higher-priced copper or vice versa. In fact, there
might be little or no difference between the prices charged for either
aluminum or copper. Successful attempts at concerted action or
the formation of general commodity organizations by mineral-
exporting countries could seriously jeopardize United States' inter-
ests as well as those of companies engaged in exploiting land-based
minerals. For the companies it would mean that their leverage over
production and prices would be greatly reduced. Also, their prop-
erty might be expropriated or confiscated as producing countries
begin to exercise newly acquired power. For the United States,
commodity organizations mean increased possibilities of higher
prices or withholding of supplies, as was done by OPEC in 1973.
Furthermore, the threat of either withholding minerals or higher
prices could pressure the U.S. to compromise its position on other
international political and economic issues.'0 Because the U.S. is a
9 C. Fred Bergsten, "The Threat from the Third World," Foreign Policy, 11
(Summer, 1973), 108.
10 Ibid.
major consumer of minerals,1"most of which must be imported, it

is very sensitive about oil, nickel, or copper cartels. Because of the
importance of these minerals, all the countries which import sub-
stantial quantities of them would be adversely affected by high
prices.
Copper, nickel, cobalt, and manganese are the most important
minerals in manganese nodules. Copper has a wide variety of im-
portant uses. Electrical conductivity and resistance to corrosion
make copper invaluable in the manufacture of electrical equip-
ment, cables, and wires for communication and electrical trans-
mission lines and electrical appliances. Copper is also used in in-
secticides, special paints used to paint ship bottoms, construction,
chemical industries, and in the manufacture of alloys.'2 The United
States produces most of the copper it consumes. In fact, it imports
very little copper-approximately 6% in 1971 (early stage of the
debate on nodules). Annual copper imports cost the United States
more than $160 million.13
Nickel is used primarily as an alloy metal and in electroplating.
It gives certain properties to alloys such as increased strength and
resistance to corrosion. It is estimated that almost 85%of the nickel
consumed in the U.S. is in the form of alloys: stainless steel, heat
resistant casting, grey iron castings, cast bronzes, and brasses.14
The United States is heavily dependent on imported nickel. In fact,
in 1971 the U.S. imported as much as 66% of domestic nickel con-
sumption, as a cost of $363 million.15 Because of the importance of
11 Hollis M. Dole, "Ocean Minerals and the Law," Natural ResourcesLawyer,

2 (November, 1969), 352-360. Dole contends that the United States in the
past 30 years has used more minerals than the entire world consumed through-
out history. He asserts that, in the past century, the United States population
quadrupled as did its mineral consumption,352.
12 Norris R. Shreve, The Chemical Process Industries (New York: McGraw-
Hill Book Company, Inc., 1956), 438; Brown and Butler, The Production,
Marketing and Consumption of Copper and Aluminum (New York: Praeger
Publishers, 1968), 164.
13 Leigh Ratiner and Rebecca L. Wright, "United States Ocean Mineral Re-
source Interests and the United Nations Conference on the Law of the Sea,"
Natural Resources Lawyer, 6 (Winter, 1973), 15. The reader should bear
in mind that the figures presented in this study are for the early period of the
debate on manganese nodules.
14 Ibid.
15 Ibid.
nickel to its economy, it is essential for the United States to have

a steady supply of this mineral.
Cobalt and manganese are also important in the manufacture of
steel. Manganese improves the strength, toughness, wear resistance,
hardness, and durability of steel. It is also used in dry cell bat-
teries and other chemical processes. Cobalt is used in many in-
dustrial products. The principal characteristic of the metal is its
resistance to high temperatures. It is also used in magnets, high-
speed tool steel, and chemical processes. In 1971, the U.S. imported
96% of its manganese at a cost of about $60 million, and 75% of its
cobalt at a cost of $23 million.'6
EFFECT OF SEABED MINING ON THIRD WORLD COUNTRIES
In order to understand the effects of manganese nodules on land-

based sources of nickel, copper, manganese, and cobalt, one must
first examine how important these minerals are to the countries
which produce them. By examining countries which produce these
minerals one can also better comprehend the various positions
nation-states are taking at the Law of the Sea Conference.
Cobalt. Cobalt, one of the most important minerals in manganese
nodules, is produced primarily as a by-product of copper and nickel
mining. Most major copper and nickel producers also export some
cobalt. In Africa, where 70% of the world's cobalt is produced, the
major countries exporting it include Zaire, Zambia, and Morocco.
Both Zaire and Zambia produce cobalt as a by-product of copper.
In 1970, Zaire alone accounted for almost 12,085 tons-making it
the world's largest producer. Zambia produced 2,152 tons and
Morocco, 579 tons. From 1969 to 1970, Africa's cobalt output in-
creased from 13,056 tons to 14,716 tons.'7 Other cobalt producing
countries include Canada which accounts for 7% of the world's
cobalt),18 Cuba, Bulgaria, Cyprus, East Germany, New Caledonia,
Australia, the Philippines, Finland, the Soviet Union, Norway,
Poland, the United States, and Sweden. Most of these countries
produce very little. In fact, few of them have enough for export.
16 Ibid.
17United Nations, Survey of Economic Conditions in Africa, 1971 (New
York, 1972), 105.
18 Ann Hollick, "Canadian-AmericanRelations: Law of the Sea," Inter-
national Organization,28 (Autumn, 1974), 760.
TABLE 1
COPPER
Country % of Total Exports (1969)

Zambia 94.6
Zaire 83.0
Chile 78.3
Peru 28.9
Philippines 15.6
Uganda 10.8
Haiti 6.2
Bolivia 4.1
Nicaragua 4.1
Source: United Nations, Third United Nations Conference on the Law of

the Sea Official Records Vol. III: Documents of the Conference (New York:
United Nations, 1975), 181.
The United States, as we have seen, imports most of the cobalt it

consumes.
Copper. Copper production is distributed more evenly among
developed and developing countries with the difference being that
many of the former consume all they produce and have to rely on
the latter for imports. Among the developed countries, the United
States, the Soviet Union, and Canada are major producers-ac-
counting for approximately 46%of the total mine production in 1972.
In 1974 the United States was the largest producer of copper, with
20% of the world total. The other leading copper producers were
Chile (12%), Canada (11%), the USSR (10%), Zambia (9%), Zaire
(77%o),Peru (3%o), and the Philippines (3% ) .19 Developed countries
were the primary consumers of copper, while developing countries
exported most of what they produced. Between 1972 and 1975, the
latter accounted for approximately 73% of the world's net copper
exports.20 Many developing countries are attempting to become less
dependent on exports of copper through the diversification of their
economies, but so far have not been very successful. Table 1
19U.S. Bureau of Mines, Minerals Yearbook 1974, Metals, Minerals and

Fuels, 1 (Washington, D.C.: Government Printing Office, 1976), 499.
20 United Nations, Economic Implications of Seabed Mineral Development,
A/Conf. 62/25, 36.
TABLE2
1971 PRODUCTION OF MANGANESE ORE
FROM DEVELOPINGCOUNTRIES
Country % of World Production

Brazil 12.58
Gabon 9.03
India 8.60
Peoples Republic of China 4.83
Ghana 2.90
Zaire 1.87
Mexico 1.29
Indonesia .06
Source: U. S. Bureau of Mines, Minerals Yearbook,1971, Metals, Minerals,

and Fuels, I (Washington, D.C.: U.S. Government Printing Office, 1973),
724.
demonstrates how dependent selected countries were on copper ex-

ports when the debate on mining manganese nodules commenced.
Manganese. Manganese, the primary compound of the nodule,
is produced mainly in the socialist countries and developing coun-
tries. The three most important producers among developing coun-
tries are Brazil, Gabon, and India, each exporting about $30 million
(U.S.) annually. The following table (Table 2) shows the pro-
duction of manganese in developing countries.
Exports of manganese are a major source of foreign exchange only
in the case of Gabon, where it accounts for 20% of the total value of
exports. For the other countries, manganese exports constitute 2%
or less of total exports.2'
Nickel. Unlike the other minerals, nickel mining is presently con-
centrated in industrial countries, among which the leaders are
Canada and the Soviet Union. Production of nickel from develop-
ing countries is shown below in Table 3.
Developing countries are likely to produce a larger percentage of
world output as new mines are opened. Countries such as the
Philippines, Guatemala, Dominican Republic, Colombia, Venezuela,
Brazil, Botswana, and Burundi are all hoping to increase their
manganese output.22
21Ibid., 39.
22 Ibid., 34; see also United Nations, Economic Survey of Latin America,
1972 (New York: United Nations, 1974), 188.
TABLE 3
1971 PRODUCTION
OF NICKEL
FROM DEVELOPINGCOUNTRIES
Country % of World Production

New Caledonia 15.97
Cuba 5.65
Indonesia 4.22
Southern Rhodesia 1.84
Greece 1.64
Brazil .50
Source: U. S. Bureau of Mines, Minerals Yearbook, 1971, I (Washington,

D.C.: U.S. Government Printing Office, 1973), 825.
A major challenge to developing countries which produce any of

the various metals discussed above will come from the mining of
manganese nodules-provided that it is economical to extract them
from the ocean. Several studies have indicated that these nodules
can be extracted and processed for much less than what it costs to
mine land mineral deposits.23
Because exploiting seabed nodules can be done economically,
developing countries may be negatively affected. It is quite clear
that seabed production would account for a considerable proportion
of the total supply of the various metals. In light of the fact that
many developing countries depend on minerals as a major source of
foreign exchange, and see the development of their untapped re-
sources as a means of economic development, seabed production
could have a disastrous impact on their economies and future de-
velopment.
Those countries producing manganese are likely to be the most
adversely affected by the nodules because, as noted, they are com-
posed largely of manganese. Over-production of this metal would
in effect create a market imbalance; in other words, supply would
be much greater than demand causing prices to fall considerably
or rise at a decreasing rate.24 Countries importing manganese may
23 Alvin Kaufman, "The Economics of Ocean Mining," Marine Technology
Society Journal, 4 (July-August, 1970), 61-64. Mero, "Economic Value of

Nodule Deposits," in Horn, FerromanganeseDeposits, 200.
24 Ross D. Eckert, "Exploitation of Deep Ocean Minerals: Regulatory
Mechanisms and United States Policy," The Journal of Law and Economics, 17
(April, 1974), 143.
experience savings due to lower prices. On the other hand, since

companies mining seabed nodules are those involved on land, prices
may fluctuate very little. We should remember that a company's
main goal is profit. Even though they might obtain minerals from
producing countries at lower prices there is no guarantee that these
reduced costs will be passed on to consumers.
The nodule industry will also affect prices of copper and cobalt.
A number of developing countries depend heavily on copper ex-
ports. With seabed production, reduced demand for supplies from
traditional sources is more or less certain even if demand for this
metal increases.25 Unless developing countries find alternatives to
exporting copper, nickel, and cobalt, seabed mining is bound to have
an adverse effect on their economies.
There are two remaining factors which must be considered. For
the companies, exploitation of manganese nodules increases their
bargaining power vis-a-vis land producers. In effect, seabed pro-
duction would break the monopoly power of producing countries
and limit their power, even if they form commodity organizations.
Furthermore, since these corporations would be operating in an area
beyond the control of any particular nation-state, the possibilities of
nationalization or expropriation would be greatly diminished. For
the countries which rely on foreign sources of raw materials, seabed
production would lessen their dependency.
Already developing countries feel that the gap between them and
industrialized countries is widening. Developing countries regard
exports of primary products as an essential part of the overall effort
to close this gap.26 Advanced ocean technology poses an economic
challenge to these countries. One way of alleviating the impact of
mining seabed minerals, as they see it, is to create a strong inter-
national organization which would take their interests into con-
sideration.
Essentially, what is being demonstrated is the fact that the de-
velopment of sea law is influienced by rmnid advances in seabed
25 United Nations, Economic Implications of Seabed Mining,

A/Conf. 62/37,
Feb. 12, 1975, 6.
26 For a lively
discussion on how seabed mineral production will affect de-
veloping countries, and how this in turn is influencing their positions on the
law of the sea, see ChristopherW. Pinto, "Problemsof Developing States and
Their Effects on Decisions of the Law of the Sea," in Lewis M. Alexander,ed.,
The Law of the Sea: Needs and Interests of Developing Countries (Kingston:
University of Rhode Island, 1973), 3-14.
technology and economic conditions.27 In this process the com-

panies inevitably play a role because they are the principal users of
deep seabed technology and are primarily concerned with mining
the deep seabed. While they are not actually making sea law,
they have created a need for the formulation and implementation
of new laws by the mere fact that their activities are regarded as
serious threats to the economic and political well-being of certain
countries, particularly developing countries. In other words, the
mere possibility of future exploitation of manganese nodules is in-
fluencing the legal attitude of different states,28 and thus, the de-
velopment of international law.
EMERGING INTERNATIONAL LAW
The United Nations' debate concerning "the reservation exclu-

sively for peaceful purposes of the seabed . . . underlying the seas
beyond the limits of present national jurisdiction, and the use of
their resources in the interest of mankind," commenced in the late
1960's. It was feared that advancing technology for exploring and
exploiting the ocean would create international problems if it were
not regulated; furthermore, developing countries would not benefit
from the exploitation of seabed resources.
Since 1967, the U.N. General Assembly has adopted several reso-
lutions concerning the ocean floor beyond the limits of national
jurisdiction. These resolutions seem to be direct responses to hard
ocean mineral corporations engaged in exploratory activity in the
so-called international seabed area, clearly beyond the continental
shelf. In 1967, the General Assembly adopted Resolution 2340
(XXII) in which a "Committee on the Peaceful Uses of the Seabed
. . . beyond the limits of National Jurisdiction" was established.
This Committee was instructed by the General Assembly to
study the ways and means of promoting the exploitation and use of the re-
sources in this area, and of international co-operation to that end, taking into
account the foreseeable development of technology and the economic implica-
27 Daryl N. Winn and Dick Leabo, "InternationalLaw, U.S. Seabeds Policy
and Ocean Resource Development," The Journal of Law and Economics, 17

(April, 1974), 118; and F. M. Auburn, "The International Seabed Area,"
International and Comparative Law Quarterly, 20 (April, 1971), 174.
28Wolfgang Friedmann, The Future of the Oceans (New York: George
Braziller, Inc., 1971), 23.
tions of such exploitationand bearingin mind the fact that such exploitation
shouldbenefitmankindas a whole.29
While hard ocean mineral firms were not actually mining manga-
nese nodules commercially, they were developing the technology to
do so. It is therefore probable that the above resolution was in-
fluenced by the corporations' deep seabed exploratory activities.
Another important resolution, the so-called Moratorium Resolu-
tion, was passed in December, 1969. Essentially, it states that
pending the establishment of a set of international rules and an ap-
propriate international machinery to govern the exploitation of sea-
bed resources,
a) Statesand persons,physicaland jurisdicial,are boundto refrainfrom all
activitiesof exploitationof the resourcesof the area of the seabed and
ocean floor, and the subsoil thereof,beyond the limits of nationaljuris-
diction;
and that
b) no claim to any part of that area of its resourcesshall be recognized.30
In relation to manganese nodules, states have refrained from ex-
tending their jurisdiction over the deep seabed because of sub-
stantial opposition to any such actions. The United States, how-
ever, is considering legislation that would allow companies to mine
the oceans. This is discussed later in the article.
Mineral resources found in the area not claimed by any state are
said to be part of the "common heritage of mankind." Essentially,
what less developed countries mean by the "common heritage of
mankind" is that (1) no state can appropriate the area; (2) exploita-
tion of resources in this area should be regulated by an international
body, and not dominated by a few states; and, most important, (3)
revenue derived from exploiting manganese nodules should be dis-
tributed in a manner designed to reduce the economic disparity be-
tween developing and developed countries. In other words, it is
argued that the interests of developing states should be given special
consideration.31
29 General Assembly Resolution
2340 (XXII) U.N. GAOR supp. 16, at 14,
U.N. Doc. A/716 (December, 1967), 14. Adopted by a vote of 99 in favor,
none against, and no abstentions.
30 United Nations, General
Assembly Resolution, A/Res./2574 D (XXIV)
1833 Plenary meeting, December 15, 1969, reproduced in International Legal
Materials,9 (March, 1970), 422-423.
31 Luke Finlay and Maxwell McKnight, "Law of the Sea: Its Impact on
the International Energy Crisis," Law and Policy in International Business, 6
(Summer, 1974), 671.
The emergence of this new concept, "the common heritage of

mankind," is clearly a reaction to corporations engaged in activities
relating to manganese nodules. This is evidenced partly by the
fact that the concept applies to the area where commercial deposits
of nodules are located. Essentially, the "common heritage" concept
indicated that the companies' technical ability to exploit manganese
nodules should not allow them to take these resources at will and
that the economic and political interests of developing countries
should be recognized.
It is generally agreed by states that some form of international
authority or administration must be implemented to ensure that
these resources are treated as the "common heritage of mankind."
Article 9 of the Declaration of Principles, which is the foundation
of the discussions on the type of international regime to be in-
stituted, states that
the regime shall, inter alia, provide for the orderly and safe development and
rational management of the area and its resources and for expanding opportun-
ities in the use thereof, and ensure the equitable sharing by states in the
benefits derived therefrom,taking into particularconsiderationthe interests and
needs of the developing countries.32
However, there is substantial controversy surrounding the nature of
the international regime and machinery that should be established
to achieve those goals.
TowARDS AN INTERNATIONAL REGIME?
The overwhelming majority of developig countries (known as

the Group of 77) are strongly in favor of an international regime or
an International Seabed Authority which has direct and effective
control over the exploitaton of manganese nodules. They also want
companies to be required to make high royalty payments to the
Authority. The Group of 77 favors establishing an "Enterprise"
operated by the Authority to explore and exploit the minerals di-
32 A. 0. Adede, "The System for Exploitation of the 'Common Heritage
of
Mankind' at the Caracas Conference," American Journal of International Law,
69 (January, 1975), 32-34; in 1970 the General Assembly passed a resolution
called a "Declarationof Principles Governing the Seabed and the Ocean Floor,
and the Subsoil Thereof, beyond the Limits of National Jurisdiction," G.A.
Res. 2749 (XXV) U.N. CAOR supp. 28, at 24, U.N. Doe A/8028 (1970).
This resolution stated that "no state shall claim or exercise sovereignty or
sovereign rights" over any part of the ocean and ocean floor designated as the
common heritage of mankind,"24.
rectly or, if it wishes, through contractors.33 Developed countries,

with the exception of Canada, strongly oppose what they regard as
excessive bureaucratic control over seabed mining because it could
interfere with mining and lead to inefficiency. They also fear
OPEC-style Third World control over prices and possibly supplies.
They stress adequate incentives for companies engaged in explora-
tion and production of the nodules. Instead of having a Seabed
Authority with control over mining operations, they support an
Authority with regulatory powers. Control over mining operations
would be left to the companies and sponsoring states.4 A central
problem here is how much power the U.N. Authority and its Mining
Company should have. Even more fundamental, it seems as though
representatives are arguing about "a system of nonexploitation of
seabed minerals."35 Thus, despite the fact that a "single negotiating
text" was issued in the Spring of 1976-following the Geneva Ses-
sion of the Conference, widespread and perhaps irreconcilable
differences exist between developing and developed countries. In
the following pages, the position of countries representative of both
groups will be examined to demonstrate that their views are largely
influenced by the possible effects seabed mining would have on
their economies and their power vis-a-vis multinational corporations,
in the case of the less developed countries.
Position of Selected Less Developed Countries:

Zaire, Tanzania, and Chile
It is appropriate to start with Zaire in light of its dependence on
copper and cobalt, two of the most important metals in manganese
nodules. As has been indicated previously, mineral exports, chiefly
copper and cobalt, account for approximately 94% of Zaire's foreign
33"Declaration of Principles Governing the Seabed and the Ocean Floor,"

24.
34 Bernard H. Oxman, "The Third United Nations Conference on the Law
of the Sea: The 1976 New York Session," American Journal of International
Law, 71 (April, 1977), 253. See C. F. Amerasignhe, "Basic Principles Re-
lating to the International Regime of the Oceans at the Caracas Session of the
United Nations Law of the Sea Conference," Journal of Maritime and Com-
merce, 6 (January, 1975), 228; Luard, 141; for exact legal language of the
different proposals see Adede, "The System for Exploitation of the 'Common
Heritage of Mankind,'" 32, 34.
35 Everett G. Martin, "U.N. Law of the Sea Conference," The Wall Street
Journal,June 15, 1977, 14.
exchange. Zaire's representative to the Law of the Sea Conference,

particularly the Caracas Session, emphasized that his country would
be adversely affected by seabed mining. As one would expect, Zaire
attaches great importance to a strong seabed Authority. It stresses
that seabed production of minerals should not be carried on to the
detriment of developing countries.36
Tanzania's delegate to the Conference made direct reference to
multinational corporations, asserting that "they should not be
allowed to determine the fate of the common heritage as they ruled
the economies of developing countries."37 This country favors direct
exploitation by the Authority. However, because companies have
access to or control of the technology and capital required, Tanzania
conceded that the Authority would have to cooperate with them in
the extraction of the nodules.
Like the vast majority of African States, Latin American countries
in general, and Chile in particular, strongly support the creation of
an Authority which would be
entrusted with controlling exploration and exploitation, and empowered to
undertake direct exploration to control both the whole process of marketing
and the arrangementsfor the distributionof profits.38
Chile, a major exporter of copper, fears that production of the con-
stituent metals of manganese nodules, if unregulated, would be
harmful to its economy. It is also evident from the following state-
ment made by Chile's representative that multinational corporations
are regarded as the beneficiaries of a new legal framework that
would allow seabed mining:
The problem of the resources of the area had arisen when those possessing the
economic and technical means for exploring and exploiting them had sought to
protect their activities by means of a legal frameworkthat would guarantee the
security of their investments.39
Chile asserted that powerful companies, which had made substantial
investments in exploration and research, are prepared to mine the
nodules as soon as a new law of the sea treaty is ratified. Chile re-
gards the insistence of multinationals that the United States take
36 The Third United Nations Conference on the Law

of the Sea, II (New
York: United Nations, 1975), 47.
37 Ibid., 33.
38 Ibid., 10.
39 Ibid.
unilateral action to encourage and protect seabed mining as a clever

tactic to force an early and favorable agreement at the Conference.
If this is indeed the case, multinationals have obviously lost that
political battle.
Position of Selected IndustrialStates: United States and Japan

The United States' position reflects, to some extent, the fact that
it is the largest consumer of minerals, and the home of many multi-
national firms interested in ocean mining and simultaneously ex-
ploiting land-based mineral deposits. Kennecott, a large mining
corporation, urged Congress to support an international regime that
would permit and encourage deep seabed mining by private enter-
prise.40 As will be discussed later, Kennecott and others also tried
to persuade the U.S. to unilaterally extend its jurisdiction over the
areas where manganese nodules are, rather than wait for the estab-
lishment of an international regime. The first suggestion has been
followed.
The United States' support of a regime that would permit hard
ocean mineral companies to exploit seabed resources without ex-
cessive interference from an international Authority demonstrates its
desire to be relatively independent of foreign sources of nickel,
cobalt, copper, and other minerals. The U.S. representative at
Caracas, John Stevenson, stated that the demand for nickel and
copper would greatly exceed the rate of development of seabed
sources, thus developing countries would not be adversely affected
by seabed production.41 His reply to those countries staunchly sup-
porting the "common heritage of mankind" concept was that there
should be no special restrictions for one source of minerals and not
the other. In other words, seabed producers should not be treated
differently from land producers or discriminated against.
At the Geneva Session, the United States introduced a system for
the reservation of certain areas or a banking system. Under this
system, a company or state would submit two mines which are
roughly equal in size. One would be designated as a reserved area.
The Authority would have the choice of negotiating with companies
or states to develop the mine. With respect to the other area, the
40 Lawrence Juda, Ocean Space Rights: Developing U.S. Policy (New York:
Praeger Publishers, 1975), 102.

41 Third United Nations Conference on the Law of the Sea, II, 43.
Authority would have less control.42 The U.S. position is similar to

that of the Soviet Union. The latter favors direct exploitation of a
portion of the seabed by the Authority and the reservation of an-
other portion for the various interested states.'3 A major objective
of both countries, then, is to carefully circumscribe the powers of the
Authority and to ensure unimpeded access to some of the nodules
by individual states or private companies. Industrial countries, in
general, would like to curtail the discretionary power of the Author-
ity.
The Japanese position on the international regime demonstrates its
concern for mining companies which are based in Japan. It shows
how important constituent metals of manganese nodules are to
Japan's economy. Like the United States, Japan argues that in
order for the resources to be exploited efficiently, the International
Authority should grant licenses to contracting countries. These
countries would, in turn, allow private enterprises to develop re-
sources located in the area covered by the license. According to
Japan,
such a licensing system would make full use of the efficiency which character-
izes private entities and would be free of the disadvantages inherent in the
bureaucracy that would develop if exploitation were carried out directly or in-
directly by an internationalorganization.44
In short, for Japan, a strong organization dominated by developing
countries would be detrimental to its interest because of its de-
pendence on foreign sources of minerals.
The LOS III held at Caracas was terminated without agreement
having been reached on the nature of the international regime and/
or Authority. A second attempt to reach agreement was made in
Geneva in March 1975, but this conference also ended in a dead-
lock. A third effort was made in New York in 1976 but that too
failed to reach agreement on the nature of the international regime.
Countries on both sides of the issue did not change their positions
substantially. Developed countries favored a weak seabed Author-
ity that would have regulatory functions, while states would be re-
sponsible for authorizing or sponsoring companies to exploit the
42 John R. Stevenson and Bernard

H. Oxman, "The Third United Nations
Conference on the Law of the Sea: The 1975 Geneva Session," American
Journalof InternationalLaw, 69 (October, 1975), 766.
43 Ibid.
44 Ibid.
nodules.45 Developing countries remained firmly in support of a

strong Authority that would conduct all activities in the inter-
national seabed area; however, it could assign certain tasks to pri-
vate companies. Because of these fundamental differences between
the two groups and the need for a comprehensive treaty on the law
of the sea, another session was held in New York in May, 1977.
This Session ended in mid-July, 1977, without any significant prog-
ress having been made toward resolving the differences between
the participants concerning the exploitation of manganese nodules.
UNILATERAL ACrION BY THE UNITED STATES

ON BEHALF OF THE COMPANIES?
In light of the inability of states to agree on matters relating to
exploiting manganese nodules, there is discussion concerning pos-
sible unilateral action by the United States. Company officials had
been urging Congress to create a safe climate for their investments
pending the establishment of an international seabed regime. For
example, Morne Dubs, the Director of Kennecott's Ocean Resources
Department, appeared before several Congressional committees
urging the United States to adopt a policy encouraging economic
development in the ocean. He argued that by so doing, substantial
contributions could be made toward national economic development
and, simultaneously, the nation would achieve a secure supply of
essential raw materials. He emphasized that "industry is prepared
to go ahead, but government must establish the climate; and it
must do it now."46i
A bill (S. 1134, formerly S. 2801) has been before Congress since
1974. This bill, proposed by former Senator Metcalf of California
and others, would provide the Secretary of the Interior with author-
ity to promote the development of manganese nodules until an inter-
national legal machinery for that area is adopted. This bill, called
the "Deep Seabed Hard Mineral Act," states that the United States
is totally dependent on foreign sources for some of the constituent
minerals of manganese nodules, and that "the national security in-
45"First Committee of Law of Sea Conference Holds First Meeting in
Geneva," United Nations Press Release, Sea/159 (March 18, 1975).
46 Marne A. Dubs, Director, Ocean Resources Department, Kennecott Copper
Corporation, "Industry's Assessment of the Hard Mineral Situation," in Senate

Committee on Commerce, The Oceans and National Economic Development
(Washington, D.C.: Government Printing Office, 1973), 66.
terests of the U.S. require the availability of mineral resources which

are independent of the export policies of foreign nations."47 Noting
that the ocean was an alternative source of these minerals, and that
they were beyond any national jurisdiction, it stressed that such
minerals are "available for utilization by any nation with the ability
to exploit them." Section 7 of the proposed bill declares that
it is in the national interest . . . to utilize existing technology and capabilities
of United States mining companies by providing legislation which will en-
courage further efforts to insure national access to available deep seabed
minerals.48
If an international treaty concerning the deep seabed is ratified by

the U.S. Senate, the treaty would take precedence over national
legislation.
Since this bill was introduced, there has been a very significant
development. On November 15, 1974, Deepset Ventures, Inc., a
subsidiary of Tenneco, filed a "Notice of Discovery and Claim of
Exclusive Mining Rights, and Request for Diplomatic Protection
and Protection of Investment" with the U.S. Department of State.
Deepsea Ventures claimed that it has "discovered and taken posses-
sion of . . . a deposit of seabed manganese nodules" in the area
designated as the "common heritage of mankind."49
This development creates even more chaos in sea law. Here we
have a private company wanting to establish its jurisdiction, as it
were, over a portion of seabed considered as belonging to everyone
in general and to no one in particular. Deepsea Ventures bases its
claim to the area upon its technical abilities to exploit and process
manganese nodules, in essence ignoring the "common heritage"
concept. The U.S. Department of State informed Deepsea Ventures
that it does not grant or recognize mining rights in the international
seabed area. It maintained that the appropriate means for the de-
47Mineral Resources of the Deep Seabed, Hearings before the Subcommittee

on Minerals, Materials, and Fuels of the Committee on Interior and Insular
Affairs, United States Senate, 93rd Congress, Second Session, March 5, 6, and
11, 1974, Part 2, 771.
48 Ibid., 772; in testimony on the Bill, Marne Dubs maintained that the
passage of domestic legislation would not adversely affect current negotiations

on Sea Law, but might in fact be helpful ibidd., 1016).
49 Deepsea Ventures, Inc.; Notice of Discovery and Claim of Exclusive
Mining Rights, and Request for Diplomatic Protection and Protection of In-
vestment, Filed November 15, 1974. Reproduced in InternationalLegal Mate-
rials, 14 (January, 1975), 51-65.
velopment of the law of the sea is the LOS III and not unilateral
claims.50 Nevertheless, it was reported that in anticipation of deep-
sea mining by American corporations, Rogers C. B. Morton, then
Secretary of the Interior, had created an ocean mining administra-
tion in the Department of the Interior to issue licenses to hard ocean
mineral corporations.51 However, the United States has not granted
any licenses and is apparently postponing action until states can
agree on a treaty regulating the exploitation of manganese nodules.
CONCLUSION
It should be evident from the foregoing discussion that political

and economic considerations are fundamental barriers to the forma-
tion of new rules relating to seabed mining. This is to be expected
as law does not develop in a vacuum. It is a reflection of existing
political and economic realities. The current chaos in international
law results primarily from economic and political struggles between
the Third World and industrialized countries, and between the
former and multinational corporations. Naturally, countries which
export the metals contained in manganese nodules have a special
incentive to prevent, or diminish the impact of, seabed mining.
Confrontations on land are continued on the seabeds. In fact, it
would be unrealistic to separate the controversy surrounding manga-
nese nodules from the wider issues of transferring wealth from rich
to poor and control over multinational corporations by developing
countries. What has unified countries at the Third Law of the Sea
Conference is not that they are all producers of nickel, copper, co-
balt, and manganese, but the common objective of establishing a
"new international economic order," which would increase their
power and prestigue vis-a-vis industrialized countries.
From the standpoint of developing countries, the United Nations
is the most appropriate arena in which to accomplish this, in light
of the fact that they dominate it in terms of sheer numbers and,
50U.S. Department of State, "Statementof Claim of Exclusive Mining Rights
by Deepsea Ventures, Inc." reproduced in International Legal Materials, 14
(January, 1975), 66. It noted, however, that pending the outcome of the Law
of the Sea Conference, the position of the government is that "mining of the
seabed beyond limits of national jurisdictionmay proceed as a freedom of the
high seas under existing internationallaw."
51"Deciding Who Rules How Much of the Sea," Business Week (March 31,
1975), 26.
consequently,voting power. However, in the final analysis,neither

side will benefit from the absence of a comprehensivelaw of the sea
treaty or a treaty which does not receive widespread support and
recognition. There is little to prevent countries and companies
with the necessary technology from exploiting manganesenodules.
A treaty, on the other hand, would provide a safer investmentcli-
mate and contribute to a stable world order. What, then, is the
solution? Which proposalshould be adopted? Proposalsadvanced
by developing countriescannot be accepted by industrialcountries
interestedin seabed mineralsbecause in essence they advocatenon-
exploitation. Solutions suggested by industrial states would have
negative consequencesfor the economic well-being of only mineral
producers. While there is no compromisethat will please everyone,
the authorconcludesthat the United States'proposalsare essentially
sound economically and politically. They recognize the "common
heritage" concept and attempt to alleviate the disparity between
rich and poor nations. Under the U.S. plan, the international
Authority would have control over certain designated deposits of
nodules and the revenues obtained from them would be allocated
to poor states. Simultaneously,private enterprise and individual
states would be able to exploit the mineralsmore efficiently,being
less entangled in internationalpolitics and excessive bureaucratic
regulation.

Payne (1978)

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Payne (1978)

Uploaded by

Copyright:

Available Formats

Mining the Deep Seabed: The Political, Economic and Legal Struggle

Author(s): Richard J. Payne

ONE OF THE MAJOR developments of our time is the ability of

economic factors are frustrating attempts by the U.N. Third Con-

Developing Third World countries are consistent in their demands

lenger. As far as the British were concerned, these black "rocks"

1 David R. Horn, et al., "Distribution of Ferromanganese Deposits in the

total of approximately 1.5 trillion tons of nodules on all the ocean

In light of these estimates, it is not surprising that nation-states,

International Area: Report to the Secretary-GeneralA/Conf. 62/37 (February

EFFECTS OF MINING MANGANESE NODULES

Today we are witnessing a trend toward commodity cartels

major consumer of minerals,1"most of which must be imported, it

11 Hollis M. Dole, "Ocean Minerals and the Law," Natural ResourcesLawyer,

nickel to its economy, it is essential for the United States to have

EFFECT OF SEABED MINING ON THIRD WORLD COUNTRIES

In order to understand the effects of manganese nodules on land-

Country % of Total Exports (1969)

Source: United Nations, Third United Nations Conference on the Law of

The United States, as we have seen, imports most of the cobalt it

19U.S. Bureau of Mines, Minerals Yearbook 1974, Metals, Minerals and

Country % of World Production

Source: U. S. Bureau of Mines, Minerals Yearbook,1971, Metals, Minerals,

demonstrates how dependent selected countries were on copper ex-

1972 (New York: United Nations, 1974), 188.

Country % of World Production

Source: U. S. Bureau of Mines, Minerals Yearbook, 1971, I (Washington,

A major challenge to developing countries which produce any of

Society Journal, 4 (July-August, 1970), 61-64. Mero, "Economic Value of

experience savings due to lower prices. On the other hand, since

25 United Nations, Economic Implications of Seabed Mining,

technology and economic conditions.27 In this process the com-

EMERGING INTERNATIONAL LAW

The United Nations' debate concerning "the reservation exclu-

27 Daryl N. Winn and Dick Leabo, "InternationalLaw, U.S. Seabeds Policy

and Ocean Resource Development," The Journal of Law and Economics, 17

The emergence of this new concept, "the common heritage of

TowARDS AN INTERNATIONAL REGIME?

The overwhelming majority of developig countries (known as

rectly or, if it wishes, through contractors.33 Developed countries,

Position of Selected Less Developed Countries:

33"Declaration of Principles Governing the Seabed and the Ocean Floor,"

exchange. Zaire's representative to the Law of the Sea Conference,

36 The Third United Nations Conference on the Law

unilateral action to encourage and protect seabed mining as a clever

Position of Selected IndustrialStates: United States and Japan

Praeger Publishers, 1975), 102.

Authority would have less control.42 The U.S. position is similar to

42 John R. Stevenson and Bernard

nodules.45 Developing countries remained firmly in support of a

UNILATERAL ACrION BY THE UNITED STATES

Corporation, "Industry's Assessment of the Hard Mineral Situation," in Senate

terests of the U.S. require the availability of mineral resources which

If an international treaty concerning the deep seabed is ratified by

47Mineral Resources of the Deep Seabed, Hearings before the Subcommittee

passage of domestic legislation would not adversely affect current negotiations

It should be evident from the foregoing discussion that political

consequently,voting power. However, in the final analysis,neither

You might also like