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This subject received no discussion in the informal consultative group on innocent passage, other than an indication by Peru that the question should be kept alive pending resolution of economic zone issues. (b) Contiguous Zone

It was generally accepted that a contiguous zone of up to 12 miles from the coast could be declared for states not wishing to claim a 12-mile territorial sea. A few countries pressed for additional contiguous zone jurisdiction beyond a 12-mile territorial sea, primarily to combat smuggling, of limited distance, e.g., an additional 12 miles.

The confusion between the contiguous zone and the exercise of customs, fiscal, immigration, and sanitary jurisdiction over resource installations and artificial offshore ports has been eliminated by article 1 of the Evensen economic zone text, which clarifies that such jurisdiction is part of coastal state jurisdiction over artificial islands and installations.

The single negotiating text is at A/CONF.62/WP.8/Part II, May 7, 1975. For the text and the report of the U.S. delegation, see Hearings on Status Report on Law of the Sea Conference before the Subcommittee on Minerals, Materials and Fuels of the Senate Committee on Interior and Insular Affairs, 94th Cong., 1st Sess., June 4, 1975, Part 3, and The Third U.N. Law of the Sea Conference, Geneva Session, March-May 1975, Report to the Senate, 94th Cong., 1st Sess.

Jurisdiction On August 1, 1975, the Department of State sent a note to the Soviet Embassy in Washington concerning “the unauthorized conduct of research activity by a Soviet research vessel in the territorial waters of the Trust Territory of the Pacific Islands (TTPI)." The Department's note stated, in part:

On June 21, at 0322 GMT, the Soviet research vessel Priboy was observed at anchor two miles northwest of Agrihan Island in position 18 48.5N, 145–36E, engaged in research activity. After discovery, the vessel was observed to weigh anchor and get underway. At 0340 GMT, the Priboy departed the territorial waters of the TTPI. According to reports received from residents of the island, the Priboy had been in the vicinity since June 17.

The Department of State would like to remind the Embassy that a previous research vessel visit to the Trust Territory was arranged in response to the Embassy's request. The Department regrets that similar arrangements were not sought for the entry of the Priboy into territorial waters near Agrihan Island to conduct research activities.

The Department would appreciate the Embassy's informing responsible. agencies of the Soviet Government of the vessel's actions as described above and would also be grateful for any other actions the Embassy might take to ensure that the vessel's master is instructed to avoid further unauthorized conduct of research activities in the territorial waters of the Trust Territory of the Pacific Islands. Dept. of State File No. P75 0156-2019.

Historic Bays

On June 23, 1975, the Supreme Court, in United States v. Alaska, 422 U.S. 184 (1975), reversed the decisions of the two lower courts in that case (see the 1973 Digest, pp. 243-244; the 1974 Digest, pp. 289-293), and held that Cook Inlet, Alaska, is high seas and not an historic bay. The result of the decision was to confirm in the United States paramount rights as against Alaska to submerged land in Cook Inlet's seaward portion.

The United States had sued to quiet title to submerged lands in lower Cook Inlet, and to enjoin Alaska from offering oil and gas leases in the area. At stake was revenue from an estimated 1.6 billion barrels of oil and 13 trillion cubic feet of natural gas. The case also involved the foreign affairs consequences of a decision to claim an area as large as Cook Inlet as internal waters of the United States. The District Court had held, and the Appeals Court had affirmed, that Cook Inlet satisfied the criteria established under international law and domestic law for the establishment of an historic bay and thus constituted inland waters properly subject to State sovereignty.

The Supreme Court opinion, delivered by Mr. Justice Blackmun, reviewed the history of the authority exercised over lower Cook Inlet under Russian ownership, the territorial status, and finally the status after Alaska's admission to the Union. It concluded that at no time had such authority been exercised as to establish lower Cook Inlet as an historic bay. The Supreme Count stated that historically the exercise of sovereignty required to establish title to an historic bay is the exclusion of all foreign vessels and navigation from the area claimed, and that the enforcement of fishing and wildlife regulations, as relied on by the District Court, was patently insufficient for that purpose. The Court also held that the absence of protest from foreign countries could not constitute the acquiescence required to establish historic title without a showing that those countries knew or reasonably should have known that territorial sovereignty was being asserted. The Court concluded:

In sum, we hold that the District Court's conclusion that Cook Inlet is an historic bay was based on an erroneous assessment of the legal significance of the facts it had found.

Justices Stewart and Rehnquist dissented.

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The informal single negotiating text submitted by the Chairman of the Second Main Committee at the close of the Third U.N. Conference on the Law of the Sea, Geneva session, March 17-May 9, 1975, contained a part entitled “The Exclusive Economic Zone.” It provided for an economic zone where the coastal state would have sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources of the bed and subsoil and the superjacent waters, extending not beyond 200 nautical miles from the baseline from which the breadth of the territorial sea is measured. Draft articles on the living resources, including fisheries, in the zone, are discussed under Fisheries, post, Ch. 7, § 4, pp. 395 396.

The U.S. delegation report included the following assessment:

Economic Zone (1) General

. . Chairman of the Juridical Experts Group, Minister Jens Evensen of Norway, submitted a text on the economic zone. . .It is by far the major negotiating development on this issue. It deals with all the negotiating issues in the economic zone except for (1) a blank article on highly migratory species that remains to be negotiated, and (2) pollution and scientific research issues.

Article 1 summarizes the rights of the coastal state in the economic zone, notably sovereign rights over living and nonliving resources, rights over other economic activities such as production of energy from winds, and rights to be specified with respect to pollution and scientific research. The pollution and research issues are to be considered without prejudice to the work of Committee III.

Article 2 establishes the maximum limit of the economic zone at 200 nautical miles.

Article 3 deals with the rights of all states in the economic zone. There was general agreement on freedom of navigation and overflight, and on freedom to lay and maintain submarine cables and pipelines (which will probably be subject to subsequent qualifications regarding pipeline routing and pollution) The highly contentious issue was whether “residual rights” would be accorded coastal states or to all states or would be left open. The Evensen text deals with the issue by according all states the right to conduct internationally lawful uses of the sea related to navigation and communication, and by specifying that conflict over rights not given to the coastal state or to all states should be resolved on the basis of equity, taking into account the relative importance to the states concerned and the international community.

Article 4 deals with artificial islands and installations. This article, along with Article 3, was the major object of attack by the territorialists, who urged exclusive coastal state control over all artificial islands and installations. The U.S. and others argued for jurisdiction over resource and other economic installations only. The text deals with the issue by giving the coastal state exclusive jurisdiction over (1) all artificial islands; (2) installations used for purposes subject to its jurisdiction under Article 1 (e.g., deepwater ports); and (3) installations which may interfere with the exercise of the rights of the coastal state in the economic zone.

The article specifies that safety zones, if any, must be reasonably related to the nature and function of the installation, thus introducing some flexibility, but includes, a maximum breadth (to be specified) beyond which international action is needed, in order to protect navigation. It also introduces a new element of protection by requiring vessels to obey international standards in the vicinity of safety zones, thus permitting some measure of international protection without the need to establish unreasonably broad safety zones.

The single negotiating text is at A/CONF.62/WP.8/Part II, May 7, 1975. For the text and report of the U.S. delegation, see Hearings on Status Report on Law of the Sea Conference before the Subcommittee on Minerals, Materials and Fuels of the Senate Committee on Interior and Insular Affairs, 94th Cong., 1st Sess., June 4, 1975, Part 3, and The Third U.N. Law of the Sea Conference, Geneva Session, March-May 1975, Report to the Senate, 94th Cong., 1st Sess.

Continental Shelf

Part IV of the informal single negotiating text produced by the Chairman of the Second Main Committee at the Geneva session of the Third U.N. Conference on Law of the Sea, March 17-May 19, 1975, is entitled "Continental Shelf." It contains 11 articles governing the respective rights and duties of the coastal state and other states with regard to the Continental Shelf and its usages.

The U.S. delegation report summarized it as follows:

Continental Shelf

It is generally agreed that coastal state exclusive sovereign rights over seabed resources would be coterminous with the economic zone and extend at least to 200 nautical miles from the coast. The continental margin extends beyond 200 miles off the coasts of some states including the United States. With respect to areas of the continental margir. beyond 200 miles, there are three positions:

1. the legal Continental Shelf ends at 200 nautical miles;

2. where the continental marin extends beyond 200 miles, sovereign rights over seabed resources should extend to the outer limit of the margin;

3. where the continental margin extends beyond 200 miles, sovereign rights over seabed resources should extend to the outer limit of the margin coupled with an obligation to share some revenues from mineral exploitation beyond 200 miles.

While some advocates of the first two positions remain adamant, there is growing support for the third solution as the only way to achieve widespread agreement. The U.S., which has supported the idea of jurisdiction coupled with revenue sharing beyond 12 miles or the 200-meter isobath, whichever is further seaward, indicated that it could go along with applying revenue sharing only in the area of the margin beyond 200 miles, and suggested an illustrative schedule as follows: after the first five years of production at the site, the coastal state would contribute one percent of the value of production of the site (well head value) which would increase thereafter by one percent each year, until it reached five percent in the tenth year, where it would remain thereafter. We indicated that if we assumed a given field would produce 700 million barrels of oil through a 20-year depletion period, and a value of $11 per barrel, the total amount would be $140 million per field. The oil and other minerals themselves, and revenues collected by the coastal state, would of course remain with the coastal state.

The U.S. explained that such a system would permit some initial exploration and drilling costs to be recovered before the commencement of the coastal state obligation to make payments under the treaty. During the more economically productive life of the well, the rate of payments would increase, providing the international community with certain and substantial revenues. A graduated approach is designed to avoid onerous burdens on pioneering developments.

Other states favor a system of profit sharing, which the U.S. felt would produce uncertainty in view of unpredictable costs in operating in great water depths and great difficulty in reaching agreement among states of differing economic systems on what costs can be deducted from gross profits to compute net revenues.

Some landlocked and geographically disadvantaged states have presented a formula for distributing the revenues.

Another difficult issue is the precise definition of the continental margin where it extends beyond 200 miles. The U.S. favors a formula which would permit a coastal state to set the outer limit of the margin within 60 nautical miles of the foot of the slope. This is a relatively simple and inexpensive determination. Other broad margin states favor a direct geophysical definition which includes rocks derived from the land mass underlying the shelf, slope and rise, but not the deep ocean floor. The problem is that unless sediments overlying the deep ocean floor are excluded from the definition of the margin, its extent will be extremely and unnecessarily broad, a result likely to meet with considerable opposition. There is some lack of understanding that the object of the negotiation is to fix a juridical boundary between the coastal and international resource regimes, rather than to describe a scientific definition of the margin; this is compounded by the link between land and geology implied by the “natural prolongation' language used by the International Court of Justice.

Advocates of coastal state jurisdiction beyond 200 miles generally support independent and binding international review of the coastal state's delimitation of the outer edge of the margin in order to ensure precision and avoid unreasonable claims.

Many delegations expressed environmental concerns over pipelines. It appears that the freedom to lay and maintain pipelines will be qualified by coastal state rights with respect to routing and pollution control, and that exclusive coastal state jurisdiction over pipelines from its installations or entering its territory will be expressly recognized.

In sum the textual material for a settlement based on margin jurisdiction and revenue sharing beyond 200 miles is prepared. Precise formulas exist for defining the margin, with differences on texts being narrowed, for a Continental Shelf Boundary Review Commission, and for revenue sharing contribution and distribution. Most broad margin advocates and many others are prepared to negotiate on revenue sharing beyond 200 miles, and thus the negotiating prospects seem good unless the numerous advocates of a straight 200-mile limit feel that they cannot move until broad margin opponents of revenue sharing drop their opposition.

The single negotiating text is at A/CONF.62/WP.8/ Part II, May 7, 1975. For the text and report of the U.S. delegation, see Hearings on Status Report on Law of the Sea Conference before the Subcommittee on Minerals, Materials and Fuels of the Senate Committee on Interior and Insular Affairs, 94th Cong., 1st Sess., June 4, 1975, Part 3, and The Third U.N. Law of the Sea Conference, Geneva Session, March-May 1975, Report to the Senate, 94th Cong., 1st Sess.

On October 1, 1975, the Department of the Interior announced the establishment of an Outer Continental Shelf Advisory Board to advise the Secretary and other officers of the Department of the Interior in the performance of discretionary functions under the Outer Continental Shelf Lands Act of 1953, 43 U.S.C. 1331–1343,

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