Torpedo the Floating OPEC


An OPEC-like organization aimed at cartelizing vital world mineral resources may be stopped in its tracks if Congress has the courage to defy world opinion. The organization is the UN's Group of 77—composed originally of 77 (now 107) Third World governments. The minerals include manganese, nickel, cobalt, and copper—all found in potato-size manganese nodules three miles below the surface of the ocean.

The value of known manganese nodule deposits has been estimated at $3 trillion. The Pacific Ocean deposits alone double known world resources of copper and nickel. More important to Americans, access to manganese nodules will substantially reduce U.S. dependence on mineral imports—which now provide 93 percent of our manganese, 92 percent of our cobalt, 71 percent of our nickel, and 9 percent of our copper.

The plans for the manganese nodule cartel predate the OPEC oil embargo. They began surfacing 10 years ago this month when Malta's UN ambassador, Arvid Pardo, first set forth the collectivist notion that the seabed—and any minerals found thereon—is the "common heritage of all mankind." This concept originated with Elisabeth Mann Borgese of the Center for the Study of Democratic Institutions.

Under Borgese's and Pardo's prodding, the United Nations began holding a series of Law of the Sea conferences. A principal issue at them was Borgese's plan for an International Seabed Authority—an international regime that would control all seabed mining, distributing the profits to the Third World. Both the Johnson and Nixon administrations gave lip service to the common heritage principle and the ISA proposal—at least until the OPEC embargo. Only then did it begin to dawn on State Department officials that an ISA amounted to a new cartel that could hold the Western world to ransom. Since 1974 U.S. officials have been backing away from full-fledged support of the ISA, arguing instead for parallel development of commercial and ISA mining.

Meanwhile, four private international consortiums have continued investing millions of dollars in developing the technology to mine and process manganese nodules. Furthest ahead is Deepsea Ventures, owned jointly by U.S. Steel, Sun Oil, Tenneco, and Belgium's Union Miniere. Deepsea startled the world when, three years ago this month, it filed with the State Department a "Notice of Discovery and Claim of Exclusive Mining Rights." The claim covers a 23,000 sq. mi. segment of seabed rich in manganese nodules, about 900 miles southwest of San Diego. The company has invested about $50 million to date in prospecting, exploring, and developing the claimed deposit.

In preparing and filing its claim, Deepsea followed in the libertarian footsteps of John Locke. It came upon a previously unowned resource, identified a workable quantity, mixed its labor with it, and announced its claim for all to hear. According to noted attorney Northcutt Ely, under existing treaty and customary international law, as well as under general principles of law, Deepsea may acquire exclusive rights in a seabed mineral deposit by "discovery, filing of notice, occupation, and due diligence in exploitation." Such rights apply without any need for assertion of territorial jurisdiction and are enforceable in domestic, foreign, and international courts, wrote Ely. Morally and legally, it is Deepsea, not "all mankind" or the Group of 77, that owns the nodules in its claim.

Why doesn't that settle the issue? For one thing, the Law of the Sea conferences are still continuing, and are still talking of setting up an ISA. As a result, banks have been reluctant to lend Deepsea and the others the additional capital needed to set up full-scale mining operations. The mining companies are therefore lobbying Congress to enact a bill that would compensate them (via tax money) for any losses arising out of a future ISA treaty. It would also require the companies to deposit part of their profits in an escrow account for eventual payment as licensing fees to an ISA.

More than the future of seabed mining hangs in the balance. If the Group of 77 has its way, the remaining two-thirds of the earth's surface will pass from freedom into collective ownership. The mining companies, in their impatience to begin production, are all too willing to undercut the morality of their ownership claims by coming to terms with an ISA, conceding its right to exact tribute (and counting on the taxpayers in the event the tribute proves too large).

Yet there is an alternative that would preserve the principles of property rights and freedom of the seas. That alternative is simply to avoid any UN-backed "international regime" for the seabed. As the Ely opinion made clear, existing international law is sufficient to establish rights in seabed resources. All that is required is for those parties with legitimate interests at stake—the mining companies and the governments of the United States, Japan, and Western Europe—to agree among themselves to recognize and respect such claims.

The no-treaty alternative has been picking up support. Many oceanographers have concluded that no treaty would be preferably to the present draft, because the latter would "cripple future marine scientific research," in the words of the Ocean Policy Committee of the National Academy of Sciences. At a 1975 conference cosponsored by the Treasury Department and American Enterprise Institute, law professor Gary Knight pointed out that there is a strong case against the United States signing any UN sea law treaty. A stable framework for ocean industry could instead be provided, he said, by domestic legislation to register claims, bilateral or multilateral treaties for mutual recognition of claims, and limited use of force "to protect deep-seabed mining operations being conducted contrary to a Group of 77 seabed treaty." In July of this year the Wall Street Journal recommended U.S. withdrawal from the Law of the Sea negotiations.

There is a role for U.S. legislation—but not the present compromise approach. Congress should make clear that the United States rejects—for all time—the concept of an International Seabed Authority. It should be U.S. policy to recognize all valid claims by private parties and to reject, as a matter of law, any attempt by the UN or other international bodies to license, regulate, or tax seabed mining. That should be sufficient to relieve the bankers of their fears. No recourse to the taxpayers' wallets is required.

The UN's floating OPEC must be rejected. The "common heritage of mankind" is not collective ownership of seabed minerals. It is, rather, says Northcutt Ely, the "continuing right of free and nondiscriminatory access, free of price control, free of production control, free of restraints of accommodation and restraint of trade." That heritage is called freedom of the seas. And that is what we must preserve.