LOST at Sea

Like ships passing in the night, Rex Tillerson and Utah's Senator Mike Lee glided past each other this fall amid the international race for oil drilling leases inside the Arctic Circle.

Tillerson, chairman and CEO of Exxon-Mobil, announced he'd signed a $2.2 billion deal with Rosneft, the Russian state oil group, to develop an estimated 108 billion barrels of petroleum that lie beneath the Kara Sea, on Russia's continental shelf. He made a strategic alliance in the Arctic region, adding Exxon-Mobil's technical support to Russia's claim in 2001 to resources beyond its 200-nautical-mile exclusive economic zone in four areas: the Barents Sea, the Bering Sea, the Sea of Okhotsk, and the Central Arctic Ocean.

Lee, cofounder of the Senate's Tea Party Caucus, meanwhile preached to the choir as the featured speaker at the Heritage Foundation's annual Jesse Helms Lecture in Washington, D.C.: He hammered home his opposition to the 1982 U.N. Convention on the Law of the Sea (UNCLOS III) - known to its critics as the Law of the Sea Treaty, or LOST. Today its signatories include 157 states and the European Commission. Among the eight Arctic states, only the United States - with its Alaskan North Slope - is not a member.

President Ronald Reagan was the first to denounce the treaty, and since then opponents in the Senate Foreign Relations Committee - most notably its former chairman, the late Senator Jesse Helms of North Carolina - have blocked a floor vote on treaty accession.

Recalling his days as a congressional aide, Lee told the Heritage Foundation crowd, "I vividly remember listening on the car radio as [Senator Helms] addressed the UN General Assembly. ... I was pumping my fist in the air while he spoke of 'American exceptionalism' and the need for America to retain her sovereignty."

Those two principles - American exceptionalism and sovereignty - were Lee's themes as he ticked through a list of problems with UNCLOS, echoing a Heritage Foundation report published in August. The fundamental problem, he said, is the treaty's conceptual framework, which deems mineral resources that lie outside of exclusive economic zones to be "the common heritage of mankind." If oil, gas, or mineral resources in those areas are mined, a percentage of the proceeds - after a five-year grace period - would be shared with member nations. "One man's sharing," Lee said, "is another man's socialism."

Despite congressional inaction, UNCLOS functions as the basis for customary international law regarding environmental protection and economic development on the high seas. Territorial and natural resources disputes are resolved by its three tribunals, one in New York City; the other two in Hamburg, Germany, and Kingston, Jamaica. But submitting to their authority "puts the United States of America in what I refer to affectionately as a 'mother-may-I' posture," Lee said. "We would have ... to seek permission in advance to engage in mineral extraction activities that today we undertake just because we have the audacity to be a sovereign nation - an exceptional sovereign nation with unsurpassed and unprecedented political, economic, and military power."

Since Reagan rejected UNCLOS, the treaty has been endorsed by every succeeding president. Bill Clinton pushed through amendments to the treaty in 1994, and George W. Bush made accession a priority in 2007 - both efforts to no avail. During the 2008 presidential campaign, both Barack Obama and John McCain endorsed UNCLOS. It has long been supported by the U.S. Navy and by the American oil and gas industry. And still, it sits in committee.

"Obama could get it through, but it would take a lot of effort and it's too close to the 2012 election," says David D. Caron, a law professor at UC Berkeley and cochairman of its Miller Institute for Global Challenges and the Law. "It's not about the treaty - it's about the U.S. Senate."

The Senate, however, can't halt the rush for undersea Arctic resources. In August 2007 a Russian submersible literally planted a flag on the seabed of the North Pole, claiming it as Russian territory. On the same day, Canada launched military exercises nearby to assert its own jurisdiction.

"You can't go around the world these days dropping a flag somewhere," stated Peter MacKay, Canada's former minister of foreign affairs. "This isn't the 14th or 15th century."

"It was amazing how quickly the other Arctic nations responded," recalls Angelle C. Smith, an associate at Covington & Burling in Washington, D.C., who wrote "Frozen Assets," an article on claims to Arctic mineral rights, published in 2010 by the George Washington International Law Review.

But as Smith points out, an UNCLOS tribunal's "final and binding" recommendations can't prejudice boundary disputes in other forums - and all the nations in the Arctic Circle have opposite or adjacent coasts. The question of who owns the North Pole has yet to be resolved.

Since the United States doesn't have access to the tribunals, its options for resolving disputes in the Arctic are limited. One alternative is the International Court of Justice (ICJ), established by a treaty signed by the U.S. but also not ratified by Congress. However, the Reagan administration withdrew its consent to ICJ jurisdiction in the 1980s because of an adverse ruling over U.S. mining of Nicaraguan harbors. Today, Smith says, this country submits to ICJ jurisdiction only on a case-by-case basis - and even then, the U.S. Supreme Court does not view its decisions as binding on U.S. state courts (Medellin v. Texas, 552 U.S. 491, 508 (2008)).

"There really isn't a dispute resolution regime that's applicable," says Michael D. Nolan, a partner at Milbank, Tweed, Hadley & McCloy in Washington, D.C., who represents clients in international treaty arbitrations. The UN's international trade law commission provides a framework for disputes, he says, "but the parties would have to consent to jurisdiction - it's not compulsory."

Nevertheless, conflicts over commercial drilling leases in the Arctic Ocean are arising on a pace with the melting of the ice cap. "Canada and the United States have a diplomatic dispute over a triangle of territory in the Beaufort Sea," says UC Berkeley's Caron. "Canada is a signatory to UNCLOS and says its national boundary follows a line of longitude and is governed by the treaty. The U.S. argues that the boundary is perpendicular to the coast, and that the treaty does not apply. The issue, of course, is that both nations think there's oil under that triangle of seabed." Despite Canadian protests, the U.S. has already leased plots within the area for exploration.

Environmental concerns associated with deep-sea drilling - the type of project contemplated by Russia in the Kara Sea - could trigger another raft of disputes. Stephen L. Kass, a partner at New York's Carter Ledyard & Milburn who teaches international environmental law, contends that the United States, like all UNCLOS signatories, is bound by customary international law. And at the very least, he says, any deep-sea drilling on the U.S. continental shelf - such as that proposed by Royal Dutch Shell on leases in the Chukchi and Beaufort Seas - must meet the standards of the Environmental Protection Agency. To date, lawsuits by Alaskan natives and environmentalists have stalled exploration on Shell's lease blocks.

And the Arctic Ocean isn't the only area up for grabs. Last year a state-of-the-art submersible planted the Chinese flag on the floor of the South China Sea. In July the craft reached record depths while diving at a mineral site in international waters, between Hawaii and North America. That same week, an UNCLOS tribunal granted China and Russia rights to explore mineral deposits on the floor of the southwest Indian Ocean.

"Right now it's the law of the jungle out there," says Ronald S. Katz, a partner in the Palo Alto office of Manatt-Jones Global Strategies who helped direct the State Department's Law of the Sea negotiations in the 1970s. "If there's something you want to do on the seabed floor, you just go out and do it."

Senator Lee wouldn't have it any other way. One man's jungle, after all, is another man's sovereignty.

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