Betsy Speicher

Deep-Six the Law of the Sea

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The following ARI Op-Ed has been published in today's Wall Street Journal.

Deep-Six the Law of the Sea

By Thomas A. Bowden

November 20, 2007

The Law of the Sea Treaty, which awaits a ratification vote in the U.S. Senate, declares most of the earth's vast ocean floor to be "the common heritage of mankind" and places it under United Nations ownership "for the benefit of mankind as a whole."

This treaty has been bobbing in the legislative ocean for the past 25 years. After President Ronald Reagan refused to sign it in 1982, repeated attempts at ratification have failed. Last month, however, the Senate Foreign Relations Committee voted 17-4 to send it to the full Senate, where a two-thirds majority is required to ratify.

What's at stake are trillions of tons of vital minerals such as manganese, nickel, copper, zinc, gold and silver -- enough to supply current needs for thousands of years -- spread over vast seabeds constituting 41% of the planet's area. Senate ratification would signify U.S. agreement that the International Seabed Authority, a U.N. agency based in Jamaica, should own these resources in perpetuity.

Why should we agree to this?

Like any other hard-to-reach resources, these undersea minerals are completely valueless where they now rest. What is it that makes such resources actually valuable? It is the thinking and action of inventors, engineers, explorers and entrepreneurs who devote their mental energy to the task of finding and retrieving them. These undersea pioneers don't just find wealth, they create wealth -- by bringing a portion of nature's bounty under human control.

Despite the treaty's allusion to seabeds as the "common heritage of mankind," mankind as a whole has done exactly nothing to create value in the deep ocean, which is a remote wilderness, virtually unexploited. Under the proposed treaty, however, the ocean mining companies -- whose science, exploration, technology, and entrepreneurship are being counted on to gather otherwise inaccessible riches -- are treated as mere servants of a world collective.

In practice, under the treaty's explicitly socialist approach, mining companies operate as mere licensees who must render hefty application fees as well as continuing payments (read: taxes) and obtain prior approval at every stage of work, under regulations that emerge sluggishly from multinational committees.

Licensees must also enrich a U.N.-operated competitor called, spookily enough, "The Enterprise." For every square mile of ocean bottom a licensee explores, half must be relinquished to The Enterprise, free of charge -- and the Enterprise gets to pick the better half.

Licensees must also make available, on so-called reasonable commercial terms, their technology and know-how, and even train this giant competitor's personnel. At the end of the day, profits from The Enterprise, along with taxes from licensees, are distributed to U.N. member-nations such as Cuba, Uganda and Venezuela, who contribute nothing to the productive process.

The treaty simply assumes as a self-evident truth that wealth sharing is the moral duty of the haves toward the have-nots, and that the world's needy nations have a moral claim on the wealth created by undersea miners. But we should pause to challenge both that moral assumption and its legal implications.

Morally, undersea mining operations are entitled to own outright those portions of the ocean floor they exploit, by virtue of the productive effort they expend. Producers in general are morally entitled to live and work for their own sake, keeping the wealth they create without any moral debt to those who didn't create it. Because nature requires us to be productive in order to live, the businessman's pursuit of profit is properly regarded as a virtue, not a vice indebting him to a hungry planet.

Legally, this viewpoint is embodied in the American ideals of life, liberty and the pursuit of happiness, secured by private property rights. A historical example of the proper principle in action is the Homestead Act of 1862. Farmers acquired property rights, i.e., private deeds, to 270 million acres of fertile Midwest prairie land by the productive act of farming it, parcel by parcel.

Suppose, instead, that the U.S. government had issued only licenses, not deeds, for the acreage those farmers carved out of wild prairie land. Then suppose the government had transferred half that hard-won acreage to "The Farm," a giant government-owned competitor whose field hands the farmers would be expected to equip and train. Of course, such a travesty would have been unthinkable in the relatively capitalistic 19th century.

Governments today have legitimate options regarding how to deal with undersea explorers' need to establish property rights in the deep ocean. But it would be totally improper for America to declare eternal hostility to private property in the ocean floor by ratifying a treaty dedicated on principle to denying such rights.

Mr. Bowden, a former attorney and law school instructor, is an analyst focusing on legal issues at the Ayn Rand Institute.

------

Link to the Op-Ed (registration is required):

Copyright © 2007 Ayn Rand® Institute. All rights reserved.

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Here's a perfect concrete example of a new innovative company that desperately needs to be protected from such socialistic treaties:

http://www.nautilusminerals.com/s/Home.asp

The option is to move the company to Andorra, Azerbaijan, Ecuador, Eritrea, Israel, Kazakhstan, Kyrgystan, Peru, San Marino, Syria, Tadjikistan, Timor-Leste, Turkey, Turkmenistan, Uzbekistan, Vatican City or Venezuela, nations that have not signed (and therefore cannot ratify). A company that mines gold in Turkey has expressed interested in acquiring Nautilus, though no word on incorporating within Turkey as opposed to continuing to exist as a foreign company in Turkey which would put them under the auspices of the treaty (referred to as 'LOST'). I had thought two Swiss banks might be interested in investing in a Turkish incorporated company that extracts entire islands of the seafloor and places these 'islands' on land or at least above sea level before mining as a way to avoid continuing costs of deep sea robotics and leased underwater mining equipment (and to get around LOST), but Switzerland also signed, and ratification is probably going to be rubber stamped. However, Israeli banks would likely be interested in this idea. :D

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The following ARI Op-Ed has been published in today's Wall Street Journal.

Deep-Six the Law of the Sea

By Thomas A. Bowden

November 20, 2007

...

Suppose, instead, that the U.S. government had issued only licenses, not deeds, for the acreage those farmers carved out of wild prairie land. Then suppose the government had transferred half that hard-won acreage to "The Farm," a giant government-owned competitor whose field hands the farmers would be expected to equip and train. Of course, such a travesty would have been unthinkable in the relatively capitalistic 19th century.

Governments today have legitimate options regarding how to deal with undersea explorers' need to establish property rights in the deep ocean. But it would be totally improper for America to declare eternal hostility to private property in the ocean floor by ratifying a treaty dedicated on principle to denying such rights.

Yet that is exactly what the US government did with oil and gas on Federal land. It refused to acknowledge the establishment of private property in exploring for and extracting oil and gas, demanding instead that "royalties" be paid (some of which is the source of funding for further government takeovers of private land for parks and refuges).

The viros are now in the process of repeating that for mining. Congress is in the process of changing the 1882 mining law by imposing taxes and royalties on newly discovered and developed mines. The viros' purpose is of course to stop mining.

The government "Farm" was also established for ranching. The original Homestead Act did not provide enough acreage for economically feasible grazing in the relatively arid lands of the west, resulting in a patchwork of private property surrounded by government land used for grazing under a permit system. The viros have been using this for decades to destroy grazing and drive out the ranchers.

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In an ARI Impact January 2008 interview with Thomas Bowden, Bowden reports:

A much longer version of the material on property rights was featured as a three-page lead essay in the November 2007 issue of Marine Technology Reporter, a trade magazine for the undersea exploration industry.

That article, "Sea Treaty Drowns Property Rights", is online at seadiscover.com. Here is the google search link for the html version. The main site http://seadiscovery.com with the pdf file isn't currently working. The article runs from pages 20-23, which correspond to browser pages 24-27.

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In an ARI Impact January 2008 interview with Thomas Bowden, Bowden reports:
A much longer version of the material on property rights was featured as a three-page lead essay in the November 2007 issue of Marine Technology Reporter, a trade magazine for the undersea exploration industry.

That article, "Sea Treaty Drowns Property Rights", is online at seadiscover.com. Here is the google search link for the html version. The main site http://seadiscovery.com with the pdf file isn't currently working. The article runs from pages 20-23, which correspond to browser pages 24-27.

The treaty simply assumes, as an unquestioned moral absolute, that wealth-sharing is the moral duty of the haves toward the have-nots (or more precisely, of the producers toward the produce-nots), and that the needs of various nations give them a moral claim on the productive efforts of the mining industry.

Morally, aren't private companies that establish undersea mining operations entitled to own outright those portions of the ocean floor they exploit by virtue of the productive effort they expend? The answer is "yes" because each human being is morally entitled to live and work for his own sake, keeping the wealth he creates without any moral debt to those who didn't create it. Because nature requires us to be productive in order to live, the businessman's pursuit of profit is properly regarded as a virtue, not a vice indebting him to a hungry planet. This view is consistent with the American ideal, that each individual has the right to life, liberty, and the pursuit of happiness, secured by private property rights. Such rights extent to the companies that individuals create to pursue great productive enterprises.

Finally, a moral argument for property rights. I love the reference to the 'producers and produce-nots.' Excellent article. Thanks to Thomas Bowden.

The U.S. Senate, on the other hand, has nothing but my boundless hatred and contempt for the belief that it has the right to steal the property rights of productive citizens in order to offer them up to the U.N.

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In an ARI Impact January 2008 interview with Thomas Bowden, Bowden reports...

Unfortunately, Mr. Baulch (VP Exploration) of Nautilus Minerals has said to me through Noreen Dillane, a PR rep, that Nautilus has no position on UNCLOS, rather than aligning themselves with supporting organizations such as the ARI because hey, one should do the best one can but with the full knowledge that one will most likely suffocate in current and future restrictions imposed - but what can one do? We have to obey laws, don't we? I suggest those interested in the precise and practical reasons why a transnational organization cannot govern the seas read Jeremy Rabkin's Law Without Nations?. Apparently no philosophical ligh came on in conflicted but otherwise productive and intelligent human minds since the oil fields were willingly handed over to camel herders in the Middle East, rather than striving to protect and increase one's property.

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Unfortunately, Mr. Baulch (VP Exploration) of Nautilus Minerals has said to me through Noreen Dillane, a PR rep, that Nautilus has no position on UNCLOS, rather than aligning themselves with supporting organizations such as the ARI because hey, one should do the best one can but with the full knowledge that one will most likely suffocate in current and future restrictions imposed - but what can one do?

Damn. I actually sent a link to Tom Bowden's article to every email contact that I could find on Nautilus' website, some time ago, but never got a response.

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Unfortunately, Mr. Baulch (VP Exploration) of Nautilus Minerals has said to me through Noreen Dillane, a PR rep, that Nautilus has no position on UNCLOS, rather than aligning themselves with supporting organizations such as the ARI because hey, one should do the best one can but with the full knowledge that one will most likely suffocate in current and future restrictions imposed - but what can one do?

Damn. I actually sent a link to Tom Bowden's article to every email contact that I could find on Nautilus' website, some time ago, but never got a response.

I contacted two of Nautilus Minerals' specialized contracting companies when I was over in the UK a little while ago. Their positions were eqivalent but they remarked that if their major deep sea clients (oil companies) don't have sufficient leverage to get around the very vaguely worded and defined LOST, they could not stick their necks out and risk being seen as representative of the growing industry. I haven't given up, but the problem is insufficient time. I need the time to devote to another aspect of Objectivism real-world rooting and ARI substantiation as not-just-another-thinktank-institute. I am close to accomplishing this other goal, and can't allocate the time needed with these specialist companies to awaken them into opposing their destruction.

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Their positions were eqivalent but they remarked that if their major deep sea clients (oil companies) don't have sufficient leverage to get around the very vaguely worded and defined LOST, they could not stick their necks out and risk being seen as representative of the growing industry. I haven't given up, but the problem is insufficient time.

Keep in mind that in circumstances like this there are limits on free speech. It is well known that the rights to freedom of speech of those subjected to harsh regulations are curtailed by the government regulators, even though the courts don't recognize that infringement on the first amendment. But there are ways to fight that they may not be aware of.

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